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SAP Solution Brief

SAP for Retail SAP® Merchandise and


­Assortment Planning
An Integrated, Shopper-Centric
­Approach to Merchandising
Meet the challenges of to-
day’s retail marketplace with
integrated solutions enabled
by the SAP® Merchandise
and Assortment Planning
application. The application Like most retailers today, you are facing dise, and assortment planning – to
increased competition from new chal- ­integrate with markdown planning,
allows you to stay focused lengers in the marketplace. Thanks to shelf optimization, style management,
on shoppers’ needs and to the cutbacks that shoppers have made purchasing, and allocation functions.
in their budgets, retailing has become a By connecting these planning and exe-
plan and execute based on zero-sum game. There is only one way cution processes, it puts you in an ideal
real-time performance met- to win it: offer shoppers the kind of position to maximize profits and adapt
products they want when they want quickly to changing market conditions.
rics and powerful planning them, conveniently, and at reasonable
and simulation functions. prices. Winning demands your ability From strategic decision making all the
to open new stores if needed and to way through to the allocation of prod-
­ensure multichannel product availability. ucts to stores, SAP Merchandise and
That’s why it is more important than Assortment Planning paves the way to
ever to take a realistic, executable, but seamless integration. Not only does it
holistic approach to your merchandising enable you to create plans based on
life cycle – an approach that focuses on preexisting templates, it helps assure
the specific demands of your shoppers that those plans are executed as intend-
and the positioning of your competitors. ed – whether your retail merchandising
system is from the SAP for Retail
The SAP® Merchandise and Assortment ­solution portfolio or from a third party.
Planning application is the only fully inte- Designed to meet the challenges of a
grated retail planning solution to bring complex retail industry, the application
together comprehensive, real-time per- closes the gaps between analysis,
formance metrics with powerful plan- ­simulation, planning, and execution.
ning and simulation functions. It sup-
ports your need to select product Strategic Planning: Optimize Every
assortments based on local shopper Sales Channel
preferences so you can balance your If you’re like many retailers, your store,
most controllable investment – your catalog, and Web inventories are
merchandise inventory – profitably. planned and managed independently.
The application also helps ensure that This makes it difficult to set strategic
your finance and merchandising depart- business objectives that dictate the di-
ments, store operations, and trading rection of multichannel merchandising.
partners are all planning and executing SAP Merchandise and Assortment
according to common objectives. Planning delivers data from a single,
central source and provides top manag-
End-to-End Support ers with the tools they need to make
profitable decisions. It helps you create
SAP Merchandise and Assortment long-term, company-wide, and channel-
Planning brings effective planning specific strategic plans using quantita-
­processes to your entire organization. tive performance measures such as
It extends beyond the four key planning market share, sales growth, and overall
functions – strategic, location, merchan- profitability targets. And – when you
have found the winning strategy – it lets and capacity. SAP Merchandise and Assortment Planning: Get the Right
you cascade these plans down to lower Assortment Planning facilitates the Product Mix
levels for detailed merchandise, loca- ­integration of corporate location plans How do you plan and manage thou-
tion, and assortment planning with a into store management plans and vice sands of products? With software that
single click. versa. Your store managers can submit helps ensure you have the right prod-
their proposals for review and accep- ucts in the right stores at the right time
Designed to accommodate your plan- tance quickly and easily via a Web link. – software that helps you anticipate
ners’ busy schedules, the application And by maintaining weekly sales and in- what your shoppers are looking for and
supports a process flow that acceler- ventory plans by store, you can identify build a product mix that attracts them.
ates planning from start to finish. In and react to sales trends much earlier, To present localized, shopper-centric
­addition, it includes a monitor that lets making the most profitable use of mer- assortments, you need to start from
you track the status of tasks through- chandise inventories. Designed around ­localized, shopper-centric plans.
out the planning cycle. You can define industry best practices, these plans
workflows that support the planning help enhance profitability and maximize SAP Merchandise and Assortment
process across your organization, from sales. Planning includes powerful and intuitive
planning through approval, revisions, functions for defining style, color, and
and finalization. Merchandise Planning: Analyze, Identify product plans according to regional,
Profit Opportunities ­demographic, capacity, and price varia-
Location Planning: Align Plans for Merchandise planning is part science, tions. Your planners can run standard
Future Growth part art. It involves balancing the sci- assortment assessment reports to
Store openings, closures, moves, and ence of sales and inventory manage- evaluate the mix and performance of
renovations are a part of everyday ment with the art of identifying the mer- each assortment before it is approved.
life at your company. To ensure these chandise shoppers need. This balance What’s more, you can integrate your
is critical to your success. If you have assortment plans with your shelf opti-
insufficient stock, your sales suffer; if mization system to help ensure the
The SAP Merchandise you have unsold merchandise that must right products are placed on the right
be marked down, your margins shrink. shelves. Best of all, your assortment
and Assortment Planning SAP Merchandise and Assortment plan is continuously compared with
application is the only fully Planning provides metrics on every ­in-season sales and inventory perfor-
­level of the hierarchy, helping your mance to generate alerts when over-
integrated retail planning ­decision makers find the ideal balance stocks and understocks are forecast.
­solution to bring together ­between these two extremes. By ensuring each assortment is attrac-
tive to your target shoppers and profit-
comprehensive, real-time You can evaluate sales, margins, mark- able to your bottom line, your company
performance metrics with downs, shrinkage, purchasing, invento- benefits from faster inventory turns,
ry levels, and other key performance decreased lost sales, and fewer
powerful planning and simu- ­indicators – on screen, in real time. And markdowns.
lation functionality. thanks to real-time integration between
your open-to-buy plan and your pur- Prebuilt Templates for Retail
chasing system, purchase orders that Planning
i­nvestments are sound, you need vital could result in overstocks automatically
data on regional marketing, competi- trigger alerts in line with your pre- SAP has created templates for retailers
tion, demographic shifts, preferences, defined tolerance limits. who want a high-quality planning solu-
tion in the shortest possible time. The techniques are available, from basic With integrated soft-
templates are based on SAP’s exten- ­regression through exponential smooth-
sive planning experience across many ing and long-range forecasting that
ware supporting an end-
industries as well as on the compre- takes seasonality and recent trends to-end planning system,
hensive retail planning knowledge and into consideration.
experience acquired by SAP and its
you can put your plans
partners. And new functionality makes it possible into practice – and reap
to:
SAP Merchandise and Assortment • Plan units, cost, or retail in every
rewards that include
Planning has templates to support two currency lower inventory levels,
planning approaches, the retail method • Plan by hierarchy, as well as plan by
of accounting and the cost method of alternate hierarchies (such as
improved sales and
accounting. In addition, it delivers busi- attributes) margins, and satisfied
ness content for assortment planning • Roll up and roll down plans from any
that covers both seasonal and nonsea- level
shoppers.
sonal products. • Attach documents – to any level of
the plan
The business content is prebuilt with • Help ensure 100% process compli- that supports an end-to-end planning
key planning and performance metrics ance via business workflow functions system, you put your plans into prac-
and links to external merchandise man- tice and reap rewards that include
agement and supply-chain systems. With the SAP application, you can use ­lower inventory levels, improved sales
The templates are complete enough to predefined planning templates to and margins, and satisfied shoppers
use immediately but can be tailored to achieve faster time to benefit as well as who can find the products they need.
your specific retail planning processes. analyze preseason and in-season plans
Intuitively formatted reports offer exact- on an exception basis using automated In addition to SAP Merchandise and
ly the information you need for monitor- alerts. Via open interfaces, you can Assortment Planning, there are several
ing trends and identifying exceptions – control your procurement and open-to- other solutions available from SAP that
eliminating the need to wade through buy, allocation, product creation, and allow you to address all merchandising
unnecessary data. With SAP software, markdown processes. You can propose needs throughout the entire life cycle
you can reap the rewards of an inte- in-season markdowns automatically, of your products. These solutions
grated planning system in only a few based on business rules you define. ­cover merchandise management, price
months. And it’s all comprehensively And you can enable store managers, optimization, promotion optimization
documented and wrapped in a planner- field associates, and suppliers to plan and planning, and markdown
friendly interface. as a team, using the Web-based front optimization.
end of the planning solution.
Powerful Planning Functionality For More Information
Integrated Planning Benefits To learn how SAP Merchandise and
SAP Merchandise and Assortment Assortment Planning and other SAP for
Planning offers a wide range of bene- By connecting SAP Merchandise and Retail solutions can help you meet the
fits, including the functions needed to Assortment Planning functions to SAP challenges of today’s complex market-
“seed” new plans with values from a for Retail solutions, you can create the place, call your SAP representative or
forecast or from last year, last season, ultimate integrated merchandise life-­ visit us online at www.sap.com/retail.
or last month. Numerous forecasting cycle solution. With integrated software
Quick facts www.sap.com /contactsap

Summary
The SAP® Merchandise and Assortment Planning application is the only fully integrated
retail planning solution to bring together comprehensive, real-time performance metrics with
powerful planning and simulation functions. Based on local shopper preferences, it lets you
plan as well as execute plans and balance your merchandise inventory profitably.

Business Challenges
• Meet the competitive demands of a complex retail marketplace
• Take a holistic, shopper-focused approach to the merchandising life cycle
• Balance inventory to avoid the dangers of overstocking and understocking products
• Enable collaboration among all who contribute to your planning process

Supported Business Processes and Software Functions


• Strategic planning – Deliver data from a single, central source and provide top managers
with the tools they need to make profitable decisions
• Location planning – Integrate corporate location plans into store management plans and
vice versa; communicate plans via a Web link
• Merchandise planning – Balance real-time sales and inventory data with shopper needs
to create a profitable inventory balance
• Assortment planning – Define shopper needs according to regional, demographic,
­capacity, and price considerations

Business Benefits
• “Seed” new plans using values from a forecast or from last year, last season,
or last month
• Help ensure 100% process compliance via business workflow functions
• Achieve faster time to benefit using predefined planning templates
• Analyze preseason and in-season plans on an exception basis using automatic alerts
• Provide collaboration via Web-based exchanges
• Control procurement and other processes using open interfaces
• Propose in-season markdowns automatically based on rules you define

For More Information 50 061 093 (08/10)


Call your SAP representative or visit us online at www.sap.com/retail. ©2008 by SAP AG.
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of Business Objects S.A. in the United States and in several other
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