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SAP Retail IM Overview

Inventory Management

Inventory management in SAP Retail provides control over all inventory activity and a real time view of inventory positions for every location in the organization.  All relevant inventory transactions update the stock ledger and financials as they occur, so you always have a clear picture of your business.

Stores are assigned and authorized specific assortments during the planning process and inventory requirements are calculated.   These assortments control what items a store can order and sell.  The distribution center fulfills the store requirements and SAP Retail calculates any requirements for the distribution center.

SAP Retail provides Business Intelligence with merchandise management reporting.  It allows you to set inventory performance alerts to take proactive steps and enabling you to find inventory concerns before it is too late.  The alerts can be sent to your e-mail, desktop, or even PDA to notify you that there are overstock, insufficient stock, or other situations that need corrective action.  Alerts can be driven off of any of the metrics important to your business – e.g., inventory margin concerns, sales vs. plan, inventory vs. plan, late deliveries, weeks or days of supply, excessive inventory adjustments, etc.

Overview of Inventory Management Features:

o        Flexible control and consolidated view of all stock movements

o        By DC, division, region, location

o        By stock position in the supply chain

o        Goods available

o        Goods on order

o        In transit

o        Returns

o        Complete RTV process

o        Identify quantities in store/DC

o        Create return orders from Store to DC or Store to Vendor

o        Consolidate returns at DC – RTV centrally

o        By inventory movement type (update near real-time)

o        Sales – POS, trickle polling

o        Transfers – DC to store, date-driven

o        Transfers – Store to store, date-driven

o        Receiving – Item check, no check

o        Inventory adjustments, including shrink

o        Breakdown gift sets/packs to saleable units

o        Tolerance controls

o        Reason codes: Damaged, donation, spoilage, theft, etc.

o        Consignment stock

o        Cross-dock/Flow-through/Direct to Store delivery

o        Full audit trail of all goods movements and adjustments (system document created with every event)

o        Tight financial integration (for both internal and external transactions)

o        Stock overview and inventory performance reporting

o        Returns – consumer, store to DC, vendor; financial integration

o        Full control of stock availability

o        Available for sale

o        Reserved (promotion, customer, etc.)

o        Storage locations

o        Blocked (e.g., for quality inspection

o        Full control of physical inventory

o        Full physicals

o        Cycle counting – ABC classification, importance for counting

o        Full edit and review process prior to posting

o        Full view of inventory history

o        Store level access

o        Full execution at store level

o        View inventory position in local store and surrounding stores

o        Create transfers at store level with authorization

o        Valuation and inventory accounting

o        Manage inventory at location/item or location/merchandise hierarchy level

o        Inventory valuation at both cost and/or retail

o        Tight integration to financials

o        Define which events and costs impact inventory values and how they are taken into account

o        Replenishment and demand-based planning

o        Calculate replenishment requirements based on demand forecast and stock on-hand

o        DC and store replenishment

o        Assortments

o        Control which assortments — and which items — a store can purchase or sell.

o        Use assortment groups or “modules” to simplify the process of building local assortments

o        Authorization periods


Purchasing Management

SAP for Retail supports the entire retail procurement process for a global supply chain.  It enables automation, optimization, and controls.  It is tightly integrated from planning and forecasting requirements all the way through to settlement and reporting.

Retailers can procure for a variety of product types:

o        Replenishable products

o        Non-replenishable, seasonal products

o        Fresh-items

o        Services

Purchase Order Processing

Supports the daily operations involved in the procurement of merchandise and settling up with vendors.  The functions in this area enable you to order articles for which requirements were determined in the planning run.  It comprises quantity calculation, supply source determination, conversion of purchase requisitions to purchase orders and order monitoring.  The purchasing functionality can be used both centrally in the head office and locally in stores.

Features:

o        Maintain and monitor vendor confirmations

o        Monitor fulfillment status of purchase orders

o        Planned-based purchasing

o        Business rules

o        Document approvals

o        Flexible cost calculations (landed cost versus domestic cost calculations)

o        Workflows, alerts, authorizations, and audit trails

o        Mass maintenance

o        Integration to forecasting and replenishment

o        Analytics

Order Optimizing

In order to find the most economic order quantity, costs resulting from stock keeping and from purchasing have to be taken into consideration. The aim of optimal lot-sizing procedures is to group requirements in such a way that costs are minimized. If you order often, the result is low storage costs, but the order costs will be high due to the high number of orders. If you don’t place orders often, order costs remain very low, but storage costs will be very high since warehouse stock must be large enough to cover requirements for a much longer period. The system then adds successive quantities to this lot size until, by means of the particular cost criterion, optimum costs have been established. The system can optimize the quantities of orders to make the most out of agreements with vendors who grant better conditions when complete logistics units (such as entire pallets) are ordered. The quantity optimizing function rounds off quantities according to flexible rules that are predefined. It is possible to round either up or down. The system can also take different units of measure of a product into account.

o        Investment (Forward) buying

o        Automatic load-build

o        Manual load-build

Invoice Matching

A 3-way match betweenPO, goods received, and the invoice is carried out in invoice matching.  Invoices can be input and matched online, manually keyed in quickly for batch processing, or received electronically via EDI or XML for automatic matching.  The incoming invoices are verified in terms of their content, prices and arithmetic and apply matching logic and tolerances.  Exceptions are kicked out to be managed separately.  When the invoice is posted, the invoice data is saved in the system and he procurement cycle, inventory positions, and financials are updated.

Features:

o        Preliminary posting

o        EDI and XML enabled

o        Batch processing

o        Tolerances

o        Management by exception

o        Evaluated Receipt Settlement (ERS)

o        Consignment/pipeline settlement

o        Prepayments

Vendor Request for Quotation

This component enables you to manage and compare requests for quotation (RFQs) issued to vendors and their responses.

In purchase order management, the RFQ and the quotation form a single document. Prices and conditions quoted by vendors are entered in the original RFQ. If you have issued an RFQ to several vendors, you can have the system determine the most favorable quotation submitted and automatically generate letters of rejection to the unsuccessful bidders. You can also store the prices and terms of delivery from certain quotations in an information record for future accessing.

Features:

o        RFQ processing

o        Release of RFQs

o        Vendor quotation processing

o        Transmission of RFQs/quotations

Collective Purchase Order

Collective purchase orders are used to plan merchandise distributions. You can use a collective purchase order to combine the requirements of recipients – that may exist in the system as warehouse orders or sales orders – to create a single order for a vendor ("pull" process).

Features:

o        Collection of store/customer requirements

o        Pre-packing

Vendor Rebates and Settlement

Manage vendor rebates and deal terms, automatically track progress, and settle periodically or at the end of the contract with vendors.  Agreements can be based on purchases from the vendor or customer sales and can be associated with promotions.

Features:

o        Flexible deal setup and periods

o        Scaled rebates

o        Interim and subsequent settlement

o        Retro-active deal setup and calculation

o        Off-invoice discounts or periodic settlement

o        Compare to vendor totals before settlement

o        Automatic tracking and settlement (debit or credit memos)

o        Integration to PO management and financials

o        Integration to promotions