SAP Category Mgt 2010

SAP Nordic Retail Forum 2010

Achieving competitive advantage through

integrated Category Management

Dieter Becker

September 17th, Stockholm

© SAP 2009 /

Definition

Main target for CM is the creation of a Win-Win

situation both for manufacturers and retailers.

Category Management (CM)

is a strategic methodology for systematic assortment optimisation in retailing. Manufacturers and retailers strive in co-operation around a target group-fair definition and structuring of categories of merchandise categories (Categories). CM means thinking no longer in brands or products but in Categories. The individual product becomes a component for the optimisation of the merchandise category structure and the implementation of a collaborative defined Category strategy.

© SAP 2009 /

Classical 8 Step Process

Plan Implementation

Category Strategies

Category Definition

Category Tactics

Performance Measures

Category Assessment

Category Role

Cate

gory

Revie

w

8

Questions to be answered in Category Management

How to create assortmentsconsumer oriented?

How to reduce the manual work load ofcategory managers?

Which actions support an enhanced process flow?

How to stop the eruption ofassortments?

What can be doneto avoid the

inefficient space allocationof products?

Which KPIs are relevant for efficientcategory analysis

What could be my vision of an integrated

range & space process?

© SAP 2009 /

The Power of Integration

“With today’s disconnected processes, many retailers are

limited to quarterly or seasonal reviews of their

assortment and space decisions. Connected business

processes and emerging technology provide retailers

with more frequent reviews of the assortment and

allocation of space at the store. These reviews keep the

store more aligned with shopper desires and

expectations.”

© SAP 2009 /

Category Management – Levels of CM Capability

Category Management – Stages of development

Focussing - Price,

Marge, and Volume

Almost none

considering of

consumer behaviour

Category Management

as established process

Collaborative execution

of all process steps:

analytics, planning,

supervision and

revision

Simulations / operative Planning

Automated data integration for all reports und analytics

Multiple Category Management projects

First collaborative

planning

Semi automated

Data collection, -

processing and -

analytics

Web-based process

support

Linked with supply

chain activities

Traditional

Buying &

Merchandising

Fully integrated

Category

Management

Mature

Category

Management

Category

Management on

project basis

Pilot projects with

basis analytics

Limited and divided

system landscapes

Emerging

Category

Management

Leve

l o

f a

dva

nc

em

en

t

© SAP 2009 /

Goals

CM

Common

Process

Design

Common

integrated

System

for analytics,

planning and

operations

Common

company wide

platform

CollaborationDecision

Support and

Mass

Maintenance

• Increase of efficiency

• Decrease of manual work

• Decrease of interfaces

Common

Reporting

POS data and

research data

Common

Maintenance of

Master Data

© SAP 2009 /

Different Aspects of Category Management

Assortment

Planning

Space

Management

Category Planning

Demand

Management

CDT

POS data Market data

Category Analytics

Space data

Flexible Integrative Business process-oriented

Customer

Relationship

Management

ERP

Category Operations

Store

Collaboration

CDTPOS data Market data

Workflow Planning

Space

Management

and Ranging

Demand

ManagementERP

Store

CDTPOS data Market data

Workflow

Planning

Space

Management

and Ranging

Demand

ManagementERP

Store

No matter what your

process looks like……..

….we can build it!!!!

© SAP 2009 /

Category Management – Sample Process

Efficient Assortment

Category Definition

4

2 3

5

1

6

Store Clustering &

Assortment

Definition

Category Performance Analysis

Assortment Operation

Assortment

Planning8

Performance Review

7

Assortment Implementation

Category Measurement

© SAP 2009 /

Category Management – Article Hierarchy