Meet Shopper Demand by Optimizing Inventory Availability While Reducing Cost

Transcription

1 SAP Brief SAP for Retail SAP Forecasting and Replenishment for Retail Objectives Meet Shopper Demand by Optimizing Inventory Availability While Reducing Cost

2 Respond quickly to changes in consumer demand Respond quickly to changes in consumer demand In a fast-paced world, consumers have access to products at all times across all channels. Successful retail companies meet these demands by replenishing emptying shelves promptly while avoiding product overstock. One of their secrets is the SAP Forecasting and Replenishment for Retail application, which helps them meet shopper demand while reducing costs. As an experienced retailer, you gain consumer loyalty by predicting consumer demand accurately with relevant factors and trends incorporated into your forecasting. You use those numbers in your automated replenishment planning, integrated at every level of your supply chain. This helps you reduce logistics costs and optimize inventory. You ve eliminated manual routine work and freed up resources for value-adding activities. You maintain control of inventory levels, assortment, and availability while meeting consumer demand, reducing order cost, and minimizing effort. You know your competitors are battling with fragmented supply chains and poor collaboration while you lead the field. Your stock-intrade is SAP Forecasting and Replenishment for Retail, an application that lets you anticipate market changes and respond promptly with in-depth insight into your shoppers, what they want now, and what they ll want tomorrow. What s more, you re ready to offer just that. See the figure on the next page. 2 / 10

3 Respond quickly to changes in consumer demand Demand forecast Causal-based forecast Right mix of advanced science and robust functionality Replenishment calculation Demand forecast and planning Store and distribution center replenishment Inventory optimization Advanced safety-stock concept Consideration of multiple supplier restrictions Order proposal management Order consolidation and splitting Flexible order review and release management Business analytics Reports on: Forecasting quality Inventory evolution Adoption of retail volumes Add-on available for fresh foods Multilevel replenishment Inventorybalancing methods Order transfer to SAP for Retail or non-sap merchandising software Out of stock and lost sales Recent innovation Forecasting and automated replenishment of ultrafresh products like vegetables, fruits, meat, fish, and delicatessen foods Figure: Building blocks of the SAP Forecasting and Replenishment for Retail application 3 / 10

4 Maintain transparency to tighten control Like most retailers today, your product assortment is varied and diverse. To forecast demand, you must track millions of products along individual sales patterns and examine a multitude of factors. SAP Forecasting and Replenishment for Retail simplifies this process for you. Sophisticated forecasting algorithms fed with data from store and SKU levels aid you in predicting customer demand. Advanced modeling techniques can incorporate demandinfluencing factors, such as promotions, events, price, and even weather. With support to forecast products in the tens of millions, you spend a fraction of the time you used to on manual planning activities. The software can select the best-suited forecasting algorithms based on a product s selling history. Critical situations, such as significant sales deviations or distortions resulting from out of stock conditions, are corrected automatically. With flexible, state-of-the-art exception management, your staff is alerted to intervene only when exceptions are relevant to the business. Deliver the right products to the right locations in the right quantity, offer an exceptional customer experience, and watch customer loyalty soar. 4 / 10

5 Maintain transparency to tighten control SAP Forecasting and Replenishment for Retail applies the same level of precision and automation to replenishment as it does to forecasting, so you can automate and optimize store and distribution center processes. Automated replenishment mean your associates can dedicate more time to serving customers on the shop floor. The solution can also determine the optimal order quantity for each product in each location. SAP Forecasting and Replenishment for Retail demonstrates its full potential when you integrate the different levels of your supply chain to achieve multilevel replenishment. This means you can roll up store order forecasts to the distribution-center level and exchange them with suppliers for collaborative planning, forecasting, and replenishment. This makes sustainable reduction possible all along the supply chain from production, transports, and orders to delivery frequency helping you reduce your organization s carbon footprint. With multilevel replenishment, retailers can synchronize all levels of the supply chain to become truly demand driven. Roll store-order forecasts up to the distribution-center level to get the most precise snapshot possible of future demand. 5 / 10

6 Maintain transparency to tighten control To further optimize inventory, you want to fold safety stocks and other sophisticated factors in your replenishment. SAP Forecasting and Replenishment for Retail helps you do that. By establishing safety-level policies based on dynamically calculated safety stocks, for example, you can respond to variances in the sales curve and adapt to demand surges during promotional periods. For tricky factors in the distribution network, such as vendor restriction and full truckloads, the software helps you strike a balance between additional quantities and logistics costs. Volume, weight, and stacking potential are additional parameters the software considers to minimize negative impact on profitability and merchandise flow efficiency. With features to process advanced truckload optimization and multiple supplier restrictions, the software helps you draw up orders to load trucks that minimize logistics costs. At peak times such as Christmas, the application helps you distribute truckloads over multiple periods to even out the workload at the warehouse. Get support to automate replenishment based on a flexible safety-stock policy, optimize truckload building, and ship orders in economical quantities. 6 / 10

7 Maintain transparency to tighten control Maintain transparency to tighten control Order proposals generated by SAP Forecasting and Replenishment for Retail can often be released without any manual intervention, thanks to the software s accurate, transparent calculation steps. You can set up the software to reorder merchandise automatically, with manual intervention as an option. With the software s workbenches, you can take an exception-driven approach. You simply review orders and, should reality strike in an unforeseen way, adjust them prior to their release. Manual intervention can be performed from a central location or on-site through an intuitive, Web-based user interface. To manage retail inventory company-wide, SAP Forecasting and Replenishment for Retail in conjunction with the SAP Business Warehouse application gives you full visibility into your supply chain based on powerful analytics. A complete range of intuitive, retail-specific queries and reports supply useful information to all internal and external stakeholders. Standard reports include out of stocks, lost sales, overstocks and understocks, forecast quality, and rate of adherence to customer-service levels. You can monitor investments and performance of all merchandise inventories across your supply chain and exchange information about future demand with your suppliers for better collaboration. 7 / 10

8 Maintain transparency to tighten control Fresh products are a crucial component for grocery and convenience retailers in winning and retaining customers. The quality of fresh items looms large in a customer s decision to shop at your store or at the store next door. Out of stocks and less-than-fresh produce create a negative impression that can detrimentally affect the image of your entire company. But products that do not sell before the shelf life has expired must be discarded, and that can lead to costly write-offs and wasted resources. Highly volatile daily sales patterns and strong seasonal influences make sales of fresh products difficult to predict. Very short shelf life increases the complexity. Unexpected events, changes in weather, or unexpected sales trends can have a huge impact on a store s need to replenish vegetables, fruits, meat, fish, and delicatessen foods. This calls for extremely accurate daily forecasts as well as fast reactions to unforeseen sales trends. Avoiding waste is another consideration in replenishment for fresh products. You must know where write-offs are likely to occur in order to calculate precise order amounts. The SAP Forecasting and Replenishment for Retail fresh product forecasting add-on, makes it possible to succeed in this delicate retail business, reducing waste while keeping fresh products in stock for shoppers every day. 8 / 10

9 Transform your business Transform your business SAP Forecasting and Replenishment for Retail provides the tools your business needs to improve replenishment, reshape the supply chain, enhance customer experience, and run a demand-driven supply chain. With optimized, synchronized replenishment plans, your inventories can be reduced. By avoiding out of stocks, you will see customer loyalty and turnover increase. By automating processes, you free up your staff to focus on the real value drivers for your business. You can get up and running quickly by calling on our implementation guidance service for SAP Forecasting and Replenishment, then fine-tune your configuration with our what-if analysis deployment service for SAP Forecasting and Replenishment to perfect your settings. Available from SAP Consulting, these services can help you throughout your project. You can quantify the benefits of SAP Forecasting and Replenishment for Retail based on your company s historical data even before deployment with the proof-of-value service for SAP Forecasting and Replenishment. Explore different deployment options integrated with other SAP software or running as a stand-alone solution to realize the fastest return on investment. And simplify your IT landscape by taking advantage of the SAP HANA Enterprise Cloud service. Select the options and services that complement your project road map, and realize the lowest total cost of implementation possible. 9 / 10

10 Objectives Summary The SAP Forecasting and Replenishment for Retail application helps you accurately understand, predict, and maintain the delicate balance between inventory and customer service. The software runs algorithms on transaction data from other SAP and non-sap applications to help you determine true customer demand and optimal inventory availability at all levels. Automated replenishment and ordering processes help you increase productivity while reducing order and delivery costs. Objectives Sustain profitability in a competitive environment Retain customers as demand for variety, quality, and value increases Streamline supply chain operations with fewer transports and less waste Sophisticated demand forecasting built for retail volumes Fully automated processes for both store and distribution center replenishment Multilevel replenishment functionality, which synchronizes all the levels of your supply chain Better management of fresh items Deployment options for best-price implementation Greater product availability Maximized sales through inventory levels that match customer demand Lower inventory levels and reduced waste Increased staff productivity through management by exception Reduced order and delivery costs Learn more To find out more, call your SAP representative today or visit us online at 10 / 10 Studio SAP 41610enUS (15/12)

11 No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an SAP affiliate company. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries. Please see for additional trademark information and notices. Some software products marketed by SAP SE and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP SE or its affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP SE or SAP affiliate company products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP SE s or its affiliated companies strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions.