Overview on Apparel and Footwear Industry

SAP Apparel and Footwear (SAP AFS) is the SAP e-business solution for the apparel and footwear industry. SAP AFS was developed in collaboration with renowned industry leaders to address the particular requirements of the apparel and footwear industry. The development of the solution was mainly focused on illustrating industry-specific processes based on the SAP e-business platform, a family of solutions and services that empowers employees, customers, and business partners to collaborate successfully - anywhere, anytime.

SAP AFS enables you to benefit from the latest SAP technology and infrastructure enhancements. It is the obvious choice for companies operating in the apparel and footwear sector. Thus SAP AFS is an end-to-end, industry-specific solution that helps you meet your toughest challenges: supply chain management, customer relationship management, e-business and enterprise portals initiatives, business intelligence management, and high-volume transactions.

Challenges Faced by AFS Industry

The following are the challenges faced by AFS industry which really poses a great threat to the demand of IT in these industries:

Challenges like managing the enormous volumes of data that come with ever-increasing design variations, the changing seasons, and huge numbers of Stock Keeping Units (SKUs).

The apparel and footwear business is highly demanding, forcing companies to contend with constant challenges in a global business environment: there is relentless pressure on price, cost, and lead times. Trends are created overnight, and the industry has to rapidly adjust.

Contract domestic and offshore production combined with global procurement processes create complex value chains that can be inefficient and difficult to monitor.

Fashions often change quickly and without warning. In the apparel and footwear industry, companies must cope with seasonal fluctuation, proliferation of design variations, scant information about volatile demand that results in forecast uncertainty, stock shortages, and costly markdowns.

Benefits of using AFS Solution:

SAP AFS helps you manage your entire supply chain, from procuring raw materials to delivering finished styles. The solution integrates both in-house manufacturing and outsourcing, so you can implement a global manufacturing and procurement strategy, and ensure consistent quality. You can also manage complex global distribution networks, customs regulations, and quota rules to ensure that your products reach your customers on time.

The AFS solution includes dedicated functions for contracting, overseas- and third-party manufacturing, seasonal and mass data handling, multiple distribution channels, direct shipments; and inventory and warehouse management.

SAP AFS also includes automatic order scheduling and back-order processing capabilities, as well as support for all types of rebates and pricing discounts.

SAP AFS gives you the capability to manage the large volumes of highly-complex master data that are common to the apparel and footwear industry. The solution features a flexible master data structure that

represents sizes, colors, and quality at the SKU level. You can define one-, two-, and three-dimensional matrices with an unlimited number of dimension combinations for purchasing, production, and sales.

SAP AFS also simplifies and shortens the frequent, time-consuming mass changes in master data common to the industry.

SAP AFS puts you in complete control of your supply chain, empowering you to slash inventory volumes, eliminate production backlogs and over-delivery, and reduce costs by collaborating with your business partners

Roadmap:

AFS solution is basically an add on feature for standard SAP R/3 and hence it will have no restriction for other components. For two different business you can use AFS and standard ECC.The 1st version of AFS was 1.0 which was compatible with R/3 3.1I.It was launched in 1998 and this version mainly concentrated on AFS specific features like optimized SKU Product handling ( e.g. style, colour,size),AFS Categories, Stock allocation features etc.

The next version of AFS was launched in 2000 with version 2.5B which was compatible with R/3 4.5B.The major features which was activated were invoice verification at SKU level, enabling subsequent adjustment during subcontracting process, warehouse management function on SKU level etc.

Next came AFS 3.0 version and it was launched in 2001 and it was compatible with R/3 4.6C.This version addressed lots of issues of customers related to several allocation enhancement, order report, back order processing, season driven delivery dates in sales order , external operations in production order etc.

To enhance further functionalities in AFS industry, AFS 5.0 was launched in 2005 which was compatible with ERP5.0.The major issues like allocation against future receipts, ARun optimizer, Purchase order split, material substitution were addressed.

In 2006 AFS decided to go for further enhancement in its functionalities and this led to the launch of AFS 6.0 version and this was compatible with ERP 6.0 version also. The major functionalities like SD Process for partial quantity reduction, mass document change functionality, QM enablement for AFS were enhanced in this new version.

Lastly in 2008 AFS 6.3 version was introduced based on ERP 6.0 and Ehp3 and it included new features like handling unit management for AFS, redesign of MRP for performance improvement, value added service enablement for purchasing, returns item for purchase order in AFS, display of exception message for ARun Optimizer.

Key Features of SAP-AFS

Today more than ever, there is intense pressure to deliver quality goods, in greater quantities, within shorter timeframes and at the same time the client looks for predictable cost structures, project scopes and implementation timelines. Through total harmonization of key international operations, SAP-AFS solution encompasses all aspects of customer order management, demand management, supply chain visibility and product availability. Here I will explain some of the key features that SAP-AFS provides which is really beneficial to fashion industry.

Seasonal Forecasting: Seasonal forecasting often drives vendor procurement long before the retail orders are placed. The demand allows the brand owner to place a purchase order, which is sent to the overseas buying office and/or manufacturer. It also carries availability dates based on material lead times. In parallel, retailers place contracts/purchase orders or “early buys” to ensure the availability of certain products for the coming season and to lock into early order discounts. During the fashion season, retailers may also place reorders for styles which have high sales volumes. Thus the entire process from order forecasting down to placing of an order with reference to a particular, size, quality, and colour etc is taken care by SAP-AFS solution.

ATP-Availability to promise:

As retailers draw down on contracts with call-off orders, SAP-AFS performs an availability check to confirm if materials are available for the requested date. If the order cannot be fulfilled, the available to promise (ATP) specifies when goods are available – ensuring accurate and on-time information to the retailer.

Complex SKU Management

The flexible master data structure of SAP AFS enables users to:

Represent sizes, colors, and quality at the SKU level

Define one-, two-, and three-dimensional matrices with an unlimited number of dimension combinations for purchasing, production, and sales

Segment stock according to various categories, such as country of origin or quality

Calculate and report costs down to the SKU level

Simplify and streamline the frequent and time-consuming mass changes to master data

Value Added Service (VAS)

Retailers continue to demand more services from your organization. Value Added Services enable the brand owner to capture specific instructions for labeling, packing or other requests (i.e. cresting, hemming, finishing, etc.). A charge code determines whether the customer should be charged for such services. Hence with the latest SAP-AFS release the VAS functionality can be captured both in purchasing and sales process.

Seasonal Functionality

The seasonality of the apparel business (spring, summer, fall, winter, back-to-school and Christmas) requires that certain products be available for their corresponding season. SAP-AFS performs a seasonality check during order entry. This ensures that certain products are only sold after a specific date, or during a certain time period.

Thus this article gives an overview of AFS industry and some of the benefits that the fashion industry can utilize by using the above solution. In the forthcoming articles I will be going directly into the technical aspect of AFS solution.