sap retail fashion industry

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SAP FOR RETAIL PAGE 1 SAP FOR RETAIL FOR THE FASHION INDUSTRY Retailers with non-fashion assortments, such as food stores, drug stores and DIY stores are increasingly including articles of clothing in their assortments. By diversifying in this way, they hope to stand out from the competition and reinforce their distinctiveness. At the same time, standard fashion retailers are discovering the lucrative sales potential offered by basics (merchandise that can be replenished easily). The supply chain used by the textile industry presents a real challenge as it involves so many different procurement processes (in contrast to the retail industry, which deals in merchandise to fulfill daily requirements). Consequently, the planning process is also more complicated, as not only constantly changing trends and short- lived fashion cycles must be taken into account, but also changes in customer behavior and an increasing numbers of rollouts. The effects are obvious: o More flexible vendor management o Reduced warehouse stock through optimized ordering and goods receipt times and well-timed markdowns o Effective processing of complex article variations o Quick responses to requirement fluctuations and guaranteed replenishment The aim is to optimize the entire process chain and fulfill the requirements of consumers, while tapping into the full sales potential. A high-performance IT structure delivers all the necessary support and control options. Recognizing this fact, SAP has enhanced the scope of SAP for Retail, which has already proved its worth with retailers, to include standard features for the fashion-oriented textile industry sector.

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Page 1: Sap retail fashion industry

SAP FOR RETAIL PAGE 1

SAP FOR RETAIL FOR THE FASHION INDUSTRY Retailers with non-fashion assortments, such as food stores, drug stores and DIY stores are increasingly including articles of clothing in their assortments. By diversifying in this way, they hope to stand out from the competition and reinforce their distinctiveness. At the same time, standard fashion retailers are discovering the lucrative sales potential offered by basics (merchandise that can be replenished easily). The supply chain used by the textile industry presents a real challenge as it involves so many different procurement processes (in contrast to the retail industry, which deals in merchandise to fulfill daily requirements). Consequently, the planning process is also more complicated, as not only constantly changing trends and short-lived fashion cycles must be taken into account, but also changes in customer behavior and an increasing numbers of rollouts. The effects are obvious:

o More flexible vendor management o Reduced warehouse stock through optimized ordering and goods receipt

times and well-timed markdowns o Effective processing of complex article variations o Quick responses to requirement fluctuations and guaranteed

replenishment The aim is to optimize the entire process chain and fulfill the requirements of consumers, while tapping into the full sales potential. A high-performance IT structure delivers all the necessary support and control options. Recognizing this fact, SAP has enhanced the scope of SAP for Retail, which has already proved its worth with retailers, to include standard features for the fashion-oriented textile industry sector.

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SAP® MAP – Merchandise and Assortment Planning In response to a central demand from retailers, SAP has made significant improvements to the planning and control functions. SAP® Merchandise and Assortment Planning (SAP MAP), based on the SAP Business Information Warehouse (SAP BW), currently provides the textile industry with an integrated planning solution. It provides planning and analysis (or reporting) tools on a single platform and supports both top-down and bottom-up processes. On the one hand, flexible capacity management allows control of the entire process chain and merchandise, on a requirement and time-dependent basis. On the other hand, the SAP solution aims to integrate stock and financial data to provide a permanent overview of both the merchandise in stock and the current demand. Assortment management A central tool used in assortment management is the new planning and control tool. This controls important processes for fashion articles and basics. It also enables retailers to save unnecessary and unaffordable costs, for example, those costs arising from additional stock in stores and markdowns on goods that were never put on sale due to a lack of capacity. The new planning and control tool is closely linked to the procurement process and therefore enables assortments to be managed with precision. The SAP solution also ensures that purchasing is determined by the area of space available. This means that the right product mix is always available for individual stores at the right time and that specific products can be assigned easily to the appropriate shelf space. Common store characteristics (for example, sales, price level, capacity and location category) are combined and analyzed together in the planning process and in operational assortment control. This standardization simplifies process execution significantly. The integration of strategic planning and operational execution streamlines order, storage and delivery processes and reduces costs. Markdown control In the fashion industry, in particular, the time and level of markdowns offers huge scope for increasing profitability and reducing storage costs. Slow seller management creates markdown profiles and identifies overstocking at an early stage. The system creates a proposal for the optimal markdown level. These proposals are processed in the Price Planning Workbench, which is an additional development for SAP for Retail. Prices can then be set according to the existing budget. Changes are then transferred to the POS systems. Open-To-Buy (OTB) Open-to-Buy (OTB) is an example of how data flows are integrated optimally with planning. SAP for Retail uses OTB to support the planning and monitoring of purchasing budgets. Data that provides information about sales volumes, purchase orders and goods receipts is updated regularly to provide a basis for

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flexible planning. The OTB can be revised as often as required and can be used to compare and influence every step in the purchasing process. This enables realistic planning, while increasing control of the purchasing process and minimizing errors. Procurement The additional developments made to SAP for Retail include a flexible planning solution that opens up far-reaching possibilities for effective purchasing decisions, time-saving article purchase orders and close monitoring of individual processes. The solution takes into account specified lead and follow-up times, and a workbench designed specifically for procurement controlling makes it easier to monitor purchase order deadlines and access all relevant documents simultaneously. The merchandise distribution functions enable exact control of the flow of goods from the vendor to the distribution center to the store or, in mail order, to the customer. Merchandise no longer needs to be stored temporarily, allowing lower site costs, reduced quantities of stock, fewer markdowns and a higher throughput. Replenishment To guarantee continuous availability of a suitable quantity of basics articles (NOS), SAP has designed a tool specifically for retailers: SAP Forecasting and Replenishment. This solution also covers requirements for seasonal articles. It is possible to include demand influencing factors (DIF) in requirements planning, as well as external factors that are common to the fashion industry. In addition to replenishing articles without a history, it is also possible to forecast seasonal fluctuations or to perform a long-term forecast using articles with a history. The Replenishment Workbench is the main interface in SAP Forecasting and Replenishment and, as such, is the perfect means for a replenishment planner to access and check the results of a forecast and requirements planning run. SAP is aware that market forces dictate ever-changing requirements from management and user departments. With this in mind, it monitors markets and their challenges to IT constantly, so that it can adapt its solution strategy to meet the changes facing firms. All this ensures that SAP is the best possible partner – anytime, anywhere, for anyone.