3003 Apparel and Footwear and Retail Solutions Integration

]

Orange County Convention Center

Orlando, Florida | May 15-18, 2011

AFS and Retail Solutions Integration

Rena Cummings, Fossil

Cuneyt Vanli, Luxottica

Christoph Schroeder, SAP

Real Experience. Real Advantage.

[ AFS and Retail Solutions Integration

Consumers

Retail Store

DistributionCenter

WholesaleBusiness

Sourcing Agent

Factory/Sourcing

Critical Component Raw Material Vendors

Consumer DirectBrand

Wholesalers

Retail Customers

3PL/4PLDomestic Shipping

3PLFreight

Consolidator

RetailBusiness

SOs - POs

DistributionCenter

ecommerce


[ Agenda

Welcome & Introduction (Christoph Schroeder)

Fossil runs SAP (Rena Cummings)

Oakley runs SAP (Cuneyt Vanli)

Wrap up (Christoph Schroeder)


[ Fossil runs SAP

5


[

6

Learning Points

Fossil‟s wins and hurdles

Process flow of an order between AFS and Retail

Data flows between AFS, Retail and POS


[ Basics

Have about 400 stores globally.

Initial go-live of Retail was April 2007. EMEA project in 2010 Retail and 2011 POS

Done in two phases our most recent project. Phase I – EMEA stores moving on Retail – go-live in fall of 2010. Phase II is POS rollouts to EMEA stores, and is still going on.. The POS rollouts should be done by this summer. Asia Pacific would be next for POS rollouts, perhaps 2012.

On ECC 5.0 in Retail and needing to upgrade to ECC 6.0; AFS 6.0

Before EMEA we were already live in UK, US, AU and CA. Coming in in perhaps late 2011 or early 2012: upgrade of Retail to ECC 6.0 and Asia Pacific stores on Retail. Asia Pacific stores act as subsidiaries now. With a sub relationship in the wholesale AFS system.

Ten countries included in the scope of the Global Fast project for EMEA: Germany (DE), France (FR), Netherlands (NL), Denmark (DK), Spain (ES), Italy (IT), Austria (AT), Belgium (BE), Sweden (SE) & Switzerland (CH).

Price differently for full price and outlet, so needed a mechanism that allowed different prices by concept.


[

8

Best Practices / wins

Easier to segregate accounting transactions using Retail, instead of being a sub on

Wholesale.

Supported integration with an upgraded POS system. Have information of flow to

registers and back in this presentation.

Gives stores a mechanism for inventory control and visibility to shrinkage.

More visibility to purchasing related to individual Retail stores (Retail buyers can

purchase inside Retail directly), margins, profit and loss, open to buy… Just makes

stores easier to analyze.

Less taxation on batch job stream b/c unless dependencies are required we can run

jobs in AFS at same time as Retail, have interfacing jobs. Allows Retail to run some

unique processes without impacting AFS.

Outages for Retail do not have to be same time/date as AFS & vice versa.


[ Challenges for Fossil

• Pricing and listing requires much time and effort b/c of AFS houses the material master data.

There does not seem to be a good way to create large volumes of data directly into Retail (that

we are aware of)…

• Why is there not a CIF mechanism for moving data between AFS and Retail like there is

between AFS and CRM and AFS and APO????

• Ability to use one default order type, so use multi-store order, need method for using no charge

order when items should be free of charge.

• The styles have pricing by size in Retail but we do not price by size in AFS, so have issues with

idoc postings that require clean up. (Use return authorization in AFS, but idocs from Retail fail

b/c of pricing by size in Retail that we do not have in AFS.)

• Our design requires transport of sold to per concept and country, not glamorous to transport

customer data.

• The interface design is quite complex, there is a large learning curve for users to pick up master

data efforts.


[ Process flow of an order

PO placement

Purchase Order

Invoice Verification

Multi Store Order

Allocation (runs in background)

Post Goods Issue

Invoice job run

Billing output

SAP Retail SAP AFS

iDo

c

iDo

c


[ Data interfacing with POS


[ Retail order processing

*Use copy of BD10 transaction we call ZBD10 to load ARTMAS, COND_A & INFREC, DESAV

in our ZWRR delivery output and INVOIC in our Z810 output


[ Store processing


[ Store register example


[ Agenda






[ Oakley runs SAP

16


[ Background – Oakley„s Experience

•Oakley has implemented SAP Retail in 2004 to support its retail stores.

•Most of the implementation effort was dedicated to enhancing and building the

integration points between Oakley‟s AFS and retail systems.

•Oakley‟s integration efforts included the following:

•Article master – Standard interface was utilized and enhanced with custom solutions to

allow handling of large number of articles with minimal manual handling.

•Financials – Custom interfaces were created to address the requirement to move the

financial data to the AFS system as the system of record.

•Order management – Standard IDOCs were utilized with various user exit

enhancements.

•Pricing – Custom interfaces were created to monitor the changes in the key pricing

elements in the AFS system and update pricing and cost in the retail system.

•BW extracts – Standard extracts with user exit enhancements were used to normalize

data.

•Various reporting tools – These were created to address the requirement to provide

real time inventory visibility across the systems.


[ Dual Instance Integration Points

As the number of retail doors increase, the need for more robust, comprehensive

integration between AFS and Retail is needed:

•Financials

•Inventory visibility and Merchandise Distribution

•Master data

•Material master

•Price and Cost

•Order processing

•Business warehouse integration


[ System Landscape

LEGEND

SAP RETAIL SAP AFS

Material Master

Article Master

SYSTEM OF

RECORD

Article Enrichment

Material Creation

Key Pricing Data

Key Pricing Data

Retail Pricing

Pricing Creation

Sales Order

Purchase Order

Fulfillment Request

Allocation

ShipmentShip

Notification

POS

Receipt

Sales Returns

Inventory Adjustment

s

Financial PostingsVia POS

IntegrationG/L DataExtract

G/L DataPosting

Financial Reporting

Accounting for Retail

Inventory Lookup

Inventory Lookup

ReportingDC on Hand

for Retail

SAP BW

FunctionIntegration

Process

Custom Enhancements

Standard Integration

Minor Improvements


[ Financials

REQUIREMENTS

The AFS system is determined as the system of record for the organization.

Retail company codes are closed in the AFS system together with all other company

codes for the organization.

Financial reporting for the organization, including retail business, is produced out of

the AFS system.

All financial transactions are replicated in the AFS system in detail.

CHALLENGES

Financial data is critical and failures in the integration can have unforeseen financial

and legal ramifications.

Significant development effort needed for custom solutions to build a robust tool

that can handle large volumes of financial data with proper monitoring tools.

Continuous maintenance and support of the complex custom interfaces

WHAT EXISTS There are no standard integration tools to move financials as journal entries from

one system to the other in the context discussed here.

WHAT IS NEEDED

Standard integration between the retail and the AFS systems to move financial

transactions.

Proper monitoring and error resolution tools to ensure transactions are not

duplicated or lost and all financial data is properly moved.

Integration will need to be able to support large volumes of data.

Configuration tools to manage the integration parameters.


[ Inventory Visibility and Merchandise Distribution

REQUIREMENTS

Distribution centers are managed in the AFS system.

Retail stores are replenished and fulfilled from the DCs in the AFS system.

Day to day retail operations require visibility to DC inventory.

Planning distribution to retails stores based on DC quantities or receipt against a

collective purchase order.

CHALLENGES

DC inventory levels play a key role in the retail planning and replenishment

processes. W

A number of function in the retail system especially around merchandise distribution

cannot be utilized due to lack of a retail DC. However the DCs that exists in the AFS

system serve as the DC to retail business.

WHAT EXISTS No standard tools exists.

WHAT IS NEEDED

Capability to have full visibility to DC inventory levels across the systems.

Capability to execute push and pull type of distribution planning in the retail system.

Capability to execute on the distribution plan in the AFS system.

Best practice scenarios defined and configured to support these processes.


[ Master Data – Article Master

REQUIREMENTS

The AFS system originates material master data.

A selected assortment is needed in the retail system.

Materials and grids are mapped to articles and variants.

Data is extended in the retail system for retail use.

CHALLENGES

Typically the large number of materials that need to be replicated and the

complexity of the data object (due to style – SKU relation), makes the manual handling

during the integration process unpractical.

Because of the mapping between material-grid to article-variant the replication of

the data is only possible through the interface.

Enrichment of the article master data in the retail system requires manual

intervention.

WHAT EXISTS

Standard AFS to retail interface for articles is provided by SAP.

A workflow technique is proposed to trigger a manual process to extend the

articles in the Retail system.

WHAT IS NEEDED

Extended mapping options and ability to initiate a process chain to allow automated

enrichment of article data in the retail system.

Ability to monitor and alert for errors during the process.

Ability to manage certain changes to update article master data in the retail system.


[ Master Data - Pricing and Cost

REQUIREMENTS

The AFS system identifies key price lists such as MSRP and wholesale pricing.

Ability to utilize these price points in the retail system directly or as basis for

further pricing.

CHALLENGES Having price variations between the two system can lead to financial ramifications

and lost opportunities.

WHAT EXISTS Integration exists to move sales pricing conditions from the AFS system to the retail

system as purchase conditions.

WHAT IS NEEDED

Further capability to move any type of sales and purchasing pricing data from the

AFS system to the retail system and store them as various pricing elements as needed.

Capability to keep pricing in sync in between the two systems.


[ Order Processing

REQUIREMENTS

Establish a buy-sell relation between the two systems where the retail system buys

from the AFS system.

Fulfill replenishment requests generated from the retail system.

Execute shipping and receiving functions while keeping related documents across the

systems updated accordingly.

CHALLENGES

Reconciliation processes between the retail system and the AFS system for open

quantities, inventory in-transit and quantity differences encompasses a large number of

documents.

WHAT EXISTS Integration is managed through standard EDI flows that encompasses purchase

order, shipping notification and invoice.

WHAT IS NEEDED

Enhanced integration capabilities between the two systems to keep purchase orders

and sales orders in sync constantly. (Integration model between SAP CRM and SAP

ERP can be taken as an example here).

Clear view of unfulfilled demand.


[ Business Warehouse Integration

REQUIREMENTS Provide a common view of the organization including all lines of businesses including

retail, wholesale, e-commerce etc.

CHALLENGES

For the organization there is one item master data which is typically the material

master in the AFS system. Thus article numbers need to be mapped to material

numbers for the common data structures.

Differences in the structure of article and material master data requires a data

normalization effort while extracting into BW.

Differences in the transaction structures requires some mapping effort to populate

the BW data structures.

WHAT EXISTS Standard BW extracts exists

BW can handle both article and material numbers.

WHAT IS NEEDED Mapping tools to normalize the data for a common data structure.


[ Agenda






[ Wrap up: AFS and Retail Solutions Integration

Consumers

Retail Store

DistributionCenter

WholesaleBusiness

Sourcing Agent

Factory/Sourcing

Critical Component Raw Material Vendors

Consumer DirectBrand

Wholesalers

Retail Customers

3PL/4PLDomestic Shipping

3PLFreight

Consolidator

RetailBusiness

SOs - POs

DistributionCenter

ecommerce


[ Relationship Between the Two Systems

Both systems must be configured as EDI Partners in

order to exchange business documents

AFS defined as the Vendor in Retail

Retail defined as the Customer in AFS

Retail “Sold-To” partner function defined for Corporate Retail

Account

Retail “Ship-To” partner function defined for Retail Stores and

DC‟s

Implementation scenario

Begin with AFS

Retail in conjunction


[ Leveraging Coordinated Business Processes across two Systems

Merchandise Category

Style Master

Assign Styles to Stores

(Workflow)

Purchasing Price

Info Record w/ Conditions

Purchase Order

Invoice Verification

Customizing Tables

for Interface

Style Master

Sales Price

w/ Conditions

Sales Order

Delivery

Invoice

Merchandise Category &

Related Data via ALE

Article Master via ALE

Info Record & Pricing

Conditions via ALE

Purchase Order via ALE

Advanced Shipping Notice

(ASN) via ALE

Invoice via ALE

SAP Retail SAP AFS


[

] Thank you for participating.

SESSION CODE:

3003

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3003 Apparel and Footwear and Retail Solutions Integration

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Transcript of 3003 Apparel and Footwear and Retail Solutions Integration