SAPIRT - Overview of Functions in SAP for Retail

I just finished studying the first book of the SAP for Retail academy, "SAPIRT - Overview of Functions in SAP for Retail". This book aim is to present an overview of SAP's solutions offer to retailers.

Following the content and my comments:

Unit 1 - Navigation: this unit basically explains how to log on to the system and use the SAP GUI. If you have used a SAP system before, you will be familiar with most of the content here and might well skip it.

Unit 2 - Introduction: SAP Retail Solution Map is explained here. Concepts such business scenario group, business scenario and business process are described, as well as mySAP ERP architecture and key technological terms in the SAP environment such as ALE, RFC ans BAPI. At the end of the unit you will be presented with a section about international standards (ARTS, GLN/ILN, EAN, UCC, UPC, GTIN, etc.). Basically general purpose information is presented here that will be probably useful in future books/units.

Unit 3 - Basic Concepts: a brief overview of master and organizational data is presented here. Following concepts are explained:

• Organizational structures: client, company code, purchasing organization, purchasing group, site, storage location, sales organization, distribution channel, distribution chain.


• Master data: merchandise categories, merchandise category hierarchies, article hierarchy, stores, distribution centers, department store/shop, customers, vendors, article master (single articles, generic articles, structured articles), article list, price catalogue and assortments.

The organizational structures are basically the same you find in SAP R/3, with some differences like for example the concept of distribution chain and the fact that stores and distribution centers are created as plants in SAP Retail and as customers and vendors (in the case of DC's) as well.

Regarding master data, there's a bunch of new concepts and terminology that might seem confusing at the beginning, specially regarding the hierarchies. I don't mean difficult, just confusing.

Unit 4 - Promotion Process: here an end-to-end process is explained, namely the promotion process. It this scenario, articles are "pushed" (push process - very common in fashion articles) to the stores. Very interesting since it covers planning, procurement and stock allocation using the promotion functionality and the Allocation Table tool. The Allocation Table tool is a central instrument for monitoring and controlling procurement and/or distribution of merchandise among stores and customers in the push process. What I like about this unit is that you get familiar very soon with a complete logistic process in SAP Retail without entering in too much detail.

Unit 5 - Planning: this unit introduces the most important planning options. Planning is carried out mainly using the solution SAP MAP (Merchandise and Assortment Planning) which is based on SAP NetWeaver BI. Strategic Planning is the top planning level which then is subdivided into Merchandise and Store Planning. Further planning levels include OTB (Open to Buy) planning and assortment planning. Slow Seller Management and Price Planning Workbench are covered as well. From my understanding, SAP MAP makes the most sense when planning fashion articles.

Unit 6 - Requirements Planning & Stock Allocation: this section describes requirements planning procedures that are typical in retail, both for distribution centers and for stores. Interesting to note is the fact that the functionality for requirements planning in SAP Retail is basically the same you find in SAP R/3, namely consumption-based planning, only with some minor enhancements for store replenishment. Additionally, SAP offers a more robust option for requirements planning namely Forecast and Replenishment solution. There's also a section about sales price calculation which explains briefly how to calculate the purchase and sales price for a group of articles, which is new functionality in SAP Retail.

Unit 7 - Purchasing: this unit is about purcharse order management, order optimizing, collective purchase order, perishables planning, invoice verification, vendor relationship and foreing trade. Purchasing in SAP Retail is based basically on the functionalities found in SAP R/3. However it has been enhanced to support the push (mainly fashion articles) and pull (mainly basics) processes in SAP Retail, in scenarios like cross-docking, flow-through and putaway.

Unit 8 - Logistics: this unit describes the most important process flow at the warehouse, such as goods receipt posting and accessing a stock overview. Value- and quantity-bases inventory management is explained. If you are a WM consultant, you will be already familiar with most of the content.

Unit 9: Multi-Channel Retailing: this unit provides an overview of the most important forms of store connection (SAP Retail to POS system). It also introduces the component SAP Retail Store. The solutions SAP Workforce Management and SAP CRM are briefly explained. Those are all external systems that must be interfaced/connected with SAP Retail.

Final comment: If you are new to SAP for Retail, this book might prove difficult to master at the beginning mainly because of the bunch of new terms, topics and concepts, all packaged in a somehow sloopy way. However, since it's an overview of a broad topic, that's probably the only way to do it. My advice is to read the book through without being too much concerned about not understanding everything. Then read it again but this time doing the exercises after each chapter. Finally check the test section at the end of the unit where you will find exam like questions.

Next post will be about the second book, "IRT310 - Master Data in SAP for Retail".

SAP Retail and SAP for Retail

At this point I find useful to explain the terms "SAP for Retail" and "SAP Retail", and to mention the different solutions that SAP offers to retailers. This will provide you with more context to understand better future posts.

SAP uses the terms "SAP for Retail" and "SAP Retail" with different meanings. "SAP for Retail" covers the entire SAP solution offering for the retail sector. According to SAP, "SAP for Retail" is an end-to-end set of solutions that supports merchandise management and planning, workforce management, point-of-sale data management, demand forecasting and replenishment, merchandise and assortment planning, master data management, and even radio frequency identification (RFID).

"SAP Retail" in contrast, which relates specifically to SAP Enterprise Resource Planning (ERP) system, is one of several solutions that is included in SAP's industry solution "SAP for Retail".

The solutions included in "SAP for Retail" are:

• SAP MDM (Master Data Management)
• SAP MAP (Merchandise and Assortment Planning): comprises Strategic Planning, Store and Merchandise Planning, Assortment Planning, Slow Seller Management, OTB (Open to Buy) Planning
• SAP Demand Management: is made of SAP Price Optimization, SAP Promotion Optimization and SAP Markdown Optimization. It was developed by a company called Khimetrics, acquired by SAP in 2006
• SAP Retail (SAP Enterprise Resource Planning -ERP- system): this is basically a SAP ECC system with enhancements for the retail industry
• SAP Global Trade Services
• SAP EWM (Extended Warehouse Management)
• SAP Forecast and Replenishment: was developed by a company called SAF AG which is currently being acquired by SAP
• SAP POS / SAP Enterprise POS: was developed by a company called Triversity, acquired by SAP in 2005
• SAP Retail Store
• SAP Workforce Management
• SAP CRM (Customer Relationship Management)

Other SAP SCM (Supply Chaing Management) solutions that are useful for the retail sector are the following:

• SAP Transportation Management
• SAP Event Management
• SAP Supply Network Collaboration

SAP for Retail Certification

So I have just started preparing myself for the SAP for Retail certification exam. I decided not to enroll in an academy but to prepare myself for the exam. For SD/MM consultants I don’t think the academy is necessary.

So what’s my plan? Get the books, buy access to a SAP Retail system and start studying and testing the concepts in the system!.

The SAP for Retail academy is made of 6 modules which correspond to following 6 books:

SAPIRT - Overview of Functions in SAP for Retail: is a prerequisite for all further SAP for Retail courses (621 pages, 45% weighting).

IRT310 - Master Data in SAP for Retail: covers the specific master data in SAP for Retail. This course is a prerequisite for all other detailed courses for SAP for Retail (405 pages, 18% weighting).

IRT320 - Prices, Promotions and Markdowns: explains how prices and promotions can be maintained and configured in SAP for Retail (543 pages, 19% weighting).

IRT330 - Planning, Purchasing and Warehouse Distribution: covers merchandise procurement and the settings of the related parameters (641 pages, 16% weighting).

IRT360 - Store Connection: covers the processes involved in supplying stores with data, and processing the data sent from a store to a central SAP retailing system (261 pages, 2% weighting).

IRT370 - SAP Retail Store: explains the configuration options and functions of SAP Retail Store (197 pages, 2% weighting).

The weighting % is a rough calculation based on information from this SAP site.

Course SAPIRT replaced course IRT100. There are 2 other courses related to SAP for Retail that are not part of the academy/certification exam:

IRT340 – Supply Chain Execution
IRT350 – Merchandise and Assortment Planning

Now I’m studying the first book, "SAPIRT - Overview of Functions in SAP for Retail", it’s a huge one, 621 pages, but a big part are exercises that can be tested on an IDES system. My next post will be about it.

SAP AFS, Retail

SAP offers basically 2 products to apparel and footwear companies depending on the spot a company occupies in the supply chain:

Industry Solution SAP AFS
Industry Solution SAP for Retail

According to SAP:

"A standard SAP Retail system is a completely integrated retailing system. It provides the functions necessary for modeling business processes within a retail company. The business process area -Retailing- comprises the procurement, storage, distribution and sales of merchandise. SAP Retail supports both Wholesale and Retail scenarios.

AFS enhances R/3 standard components in order to meet the unique requirements of the apparel and footwear industry. The result is a comprehensive solution for AFS business and logistics needs.

The main strength of SAP Retail is distribution and the main strength of AFS is the manufacturing of size-dependent products, as in the apparel and footwear industry. For this reason, AFS has a supplying role for retail companies. These two types of companies have a Customer-Supplier relationship. The interface considers the AFS system as a supplier of the Retail system and Retail as a Customer of the AFS company".

I have a solid experience with SAP AFS and some with SAP Retail. So I will start to round up my knowledge with SAP Retail as a first step. For that I have decided to pursue certification in SAP for Retail.

For now, I’ll be posting in this blog my journey towards certification in SAP for Retail. During the preparation, I’ll be comparing SAP Retail with SAP AFS and providing insights about how the two systems complement each other and about the differences and drawbacks as well.

SAP AFS Retail - Blog Presentation

Hello World!,

In their 2007 AMR Research article: "A Five-Year Vision in Apparel and Footwear: Balancing Cost, Risk, and Opportunity", Janet Suleski and Stephen Hochman wrote:"The (apparel and footwear) industry has a woeful legacy of under-investment in the necessary process, abilities, and supporting technology to manage through the inherent complexity. But an increasing number of footwear and apparel executives recognize that the industry is at a tipping point”.

Later they added:

"Increasingly, brands are opening their own retail channels; retailers are expanding private label activities into full-fledged wholesale operations; and manufacturers are moving forward into one or both of those activities. We’ve had many conversations in the past year with companies that would like to cover their wholesale, retail, and manufacturing operations with a single system, or at least with multiple applications from a single vendor— but the software vendors still need to catch up to market requirements".

"Today, no single vendor offers a truly completely unified ERP backbone that covers wholesale, retail, and manufacturing operations. One-third of all apparel and footwear companies, and nearly two-thirds of companies with annual revenue greater than $100M, are instead pursuing best-of-breed strategies while keeping a close eye on the future possibility of moving to a single vendor system. Those interested in the unified theory of ERP should keep an eye on Infor, Jesta I.S., Lawson/Intentia, Microsoft, Oracle, and SAP in particular".

This blog’s goal will be to present my findings about how well SAP industry solutions AFS and Retail together fulfill the requirements of apparel and footwear companies expressed in the authors’s article.

I decided to focus my analysis on SAP offerings and not on other software vendors since that’s my area of expertise and interest: I’m a SD certified consultant with several years of experience in SAP AFS (SAP solution for the apparel and footwear industry) and with some experience in SAP Retail.

Stay tuned to learn about my findings!.