Let me introduce our newest baby in the Retail RDS portfolio enhancing the planning solutions for Retail based on SAP Customer Activity Repository: SAP HANA Merchandise Planning for Retail rapid-deployment solution.
The solution SAP Merchandise Planning for Retail was announced end of last year and helps retailers perform consistent end-to-end planning, from channel financial, location to merchandise/open to buy planning utilizing real-time, what-if demand-driven forecasts that leverage performance indicators by week, product, customer, and store. Legacy planning processes and systems have to deal with varying levels of data to plan budgets by merchandise hierarchy and plan location to merchandise/open to buy. SAP Merchandise Planning for Retail enables one centralized repository for all planning activities, allowing immediate reconciliation of strategic, merchandise plans. The primary result is the elimination of large amounts of manual effort to support open-to-buy processes.
Process Flow SAP Merchandise Planning for Retail
The solution provides prebuilt, best practice planning templates based on an enhanced Excel, allowing flexible top-down or bottom-up or middle-out planning sequences/process flows, enabling features like cell, column and row locking, drag and drop and so on. Predefined planning functions, rules of precedence controls the order and priority of calculations consistent in all planning steps. Unlimited planning horizon with a rolling calendar allows the planning across fiscal years.
The rapid-deployment solution covers the following areas/scope items:
Channel Financial Planning
Channel financial planning is used in the process of developing sales and margin plans for the upcoming fiscal years and seasons at various levels of the merchandise, channel, and time hierarchies. A planner creates a company-wide channel financial plan by distribution channel and sales organization for all selling channels to build a sales and margin plan by month and week that is used to seed the merchandise planning and the open to buy processes. The test script which is part of the assets delivered by RDS describes the top-down process flow starting with Channel Mix, Channel Plan Comparable Stores, Store Area Plan, Channel Plan Multiple Stores and finally Channel Plan by Single Store. But of course also other sequences are possible.
Screenshot Channel Mix
The merchandise planning is used to in the process of developing sales, margin, inventory, and receipt flow for the upcoming fiscal year and seasons at various levels of the merchandise, channel, and time hierarchies. Finally the planner creates Open-To-Buy, promotion and markdown budgets. Here the RDS test scripts follows the top-down approach and start with the division plan fed with the data from channel mix. The next plans follows the merchandise hierarchy and takes care of department, classes and finally subclasses. The last step is to reconcile merchandise open-to-buy plans against merchandise financial targets using conditional formatting to easily identify deviations or differences between versions. Finally with the release of open-to-buy, markdown budget and promotion budget the execution of the plans is triggered.
Screenshot Merchandise Planning Subclass Level
SAP Lumira for Merchandise Planning Report (optional)
SAP HANA Merchandise Planning for Retail rapid-deployment solution supports the planner during the planning process with pre-built analytics leveraging SAP Lumira.
Channel Mix Reconciliation:
The report can be used to understand the development of sales and margin driven KPI’s (Sales at Retail, Sales at Cost, Gross Margin, Promo Sales, Markdown Sales, Regular Sales) in the different planning levels as Channel Mix, Channel Plan by Store Comparability, Channel Plan Multi-Store, Merchandise Plan as well as allows comparison to historical and actual in-season data.
Screenshot Sales at Retail Analysis Report
Merchandise Plan – Division Level Reconciliation:
The report allows the VP of Planning to understand and check the consistency of the different levels of the Merchandise Plan (Division, Department, Class, Subclass) in regards of sales and inventory key figures.
Screenshot Merchandise Plan Reconciliation
What else is important to know?
As mentioned below, the new Merchandise Planning solution is based on SAP Customer Activity Repository and uses data available in that platform. One pre-requisite to deploy the SAP Merchandise Planning RDS is that Demand Data Foundation is already configured. This can be done with the help of the SAP HANA Customer Activity Repository. In the SAP Merchandise Planning RDS we only cover the merchandise planning specific configuration.
In a customer project you can combine all three packages (Customer Activity Repository, Assortment Planning and Merchandise Planning) if applicable. They build on each other and work seamlessly together.
You might know already SAP Planning for Retail and you might ask now about the difference between the two solutions.
The first and most important change is that Merchandise planning moves to SAP Customer Activity Repository. One advantage of this platform change is, that Merchandise Planning can use the same data as SAP Assortment Planning, so it’s one single data source for on version of the truth across all retail planning apps. It benefits also from the planning engine, also predictive analytics all running on SAP HANA for real-time planning and analysis. SAP Customer Activity Repository provides real-time inventory information that is used in planning to improve visibility, to create inventory flows and to calculate weeks of supply. And of course HANA allows high performance on large data volumes – but this is not unique to SAP Merchandise Planning for Retail, you can also run SAP Planning for Retail on BW on HANA.
SAP Merchandise Planning for Retail offers also omni channel planning support, amongst others by planning sales by channel and channel contribution mix, and by fulfillment types like store fulfillment, DC fulfillment or fulfillment directly by a vendor. The background here is, that different fulfillment types impacts also differently the inventory. If the consumer buys something in the store and take it directly with him, the inventory in the store needs to be considered. Most probably you don’t want to carry a brand new washing machine with you, this kind of article will be delivered via DC – and effects only the DC inventory. Other products or product categories might be delivered directly via a vendor, e.g. a laptop with a special specification. Different is also the availability of rolling calendar, so that the planning period in months or weeks can cross over fiscal years. You can split into DC and Store inventory for better planning, purchasing and allocations. Beside new and updated planning workbooks, you can use the LUMIRA reports delivered by the RDS to get additional reconciliation reports.
You want to learn more about SAP’s planning solutions? Please check out this great video.
You can download the content of SAP HANA Merchandise Planning for Retail rapid-deployment solution on Service Marketplace here.
Also an offline demo is available showing a sample process flow.
If you are interested in the SAP HANA Customer Activity Repository rapid-deployment solution and SAP HANA Assortment Planning for Retail rapid-deployment solution, please check out this blog talking about the latest available versions.