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Industry Solution SAP Retail

Consequences of Activating the


Business Function Set SAP Retail

Annette Kuhn-Lieser (FS Trade Hub - Global)


Christine Klomfass (IBU Retail)
Markus Muether (IBU Wholesale Distribution)

March 2010
Agenda

 Motivation
 Intention, Target Groups, Scope
 Evaluation Project: Methodology, Teams, Deliverables, Out of Scope
 Evaluation Results: Management Summary
 Configuration SAP Retail
 SAP Retail – Retail-Specific Master Data and Functionality
 Standard Functions Supported With SAP Retail Master Data
 Standard Functions not Supported With SAP Retail Master Data
 Usage of Retail Functionality in SAP ERP Standard
 Migration SAP ERP to SAP Retail
 SAP Retail and Other, Selected SAP ERP Industry Solutions
 SAP Retail and Other, Selected Business Suite Components
 Usage of Selected SAP for Retail Solutions With SAP ERP Standard
© SAP AG 2010, ISM Trading Industries 2
Motivation

„We want to use „We want to run our oil&gas


SAP EWM? and our convenience store
Can we use this together business on the same system.
with SAP Retail? Can we do that?

„We want to run our


production business on the
same system as our „I want to produce
merchandise management meals. Can I use
system. Store Ops PROFITS
production functionality
Can we do that? with SAP Retail?

IT Operations Merchandising
Logistics

„I‘m a wholesale
Planning
company.
Should I use
SAP Retail?

„We want to closely


collaborate
with the Retailer.
Do they use „When we activate
„If I activate the BF
SAP SRM? Retail will all
set SAP Retail will all my materials
materials be
be deleted in the SAP ERP
„….?“ called
system?“
automatically articles?

© SAP AG 2010, ISM Trading Industries 3


Intention, Scope, Target Groups

Intention and Scope

In general, provide a solid understanding of what happens when the


Business Function set SAP Retail is activated
 Which additional features are available in the SAP ERP system
 Which functionality can be used together with retail-specific master data
 Which Retail functionality is available without activating the Business Function set SAP Retail
 SAP Retail in relation to other Industry Solutions as well as other Business Suite Components
 We focused on frequently demanded questions and use cases

Target Groups

This document is generally available as a decision support whether to activate the


Business Function set SAP Retail or not
 SAP partners and SAP customers (especially vertical Retailers and Wholesale Distributors )
 SAP Presales and Consultants (business and technical consultants)

© SAP AG 2010, ISM Trading Industries 4


Evaluation Project

Methodology

 We collected all relevant information and created a central documentation


 We performed tests of the most frequently demanded use cases and documented the results

Team

A small so called “core team” coordinated and documented all activities.


Many colleagues provided input and executed tests.
 Annette Kuhn-Lieser (FS Trade Hub – Global)
 Christine Klomfass (ISM Trading Industries, IBU Retail)
 Markus Muether (ISM Trading Industries, IBU Wholesale Distribution)
 Various colleagues from many areas, such as consulting, development, architecture, solution
management, knowledge management etc.
 SAP partners and SAP customers

Deliverables

 Technical documentation: SAP Retail Technology Facts


 Functional documentation: Industry Solution SAP Retail
 Update SAP Online Help, OSS Notes (to be completed)
© SAP AG 2010, ISM Trading Industries 5
Abstract of Former Documentation

Repetitive manufacturing

© SAP AG 2009, ISM Trading Industries SAP Internal 6


Abstract of new Documentation

Production Planning Repetitive Manufacturing (PP-REM)


Business Requirements
Some retailers require using repetitive manufacturing functionality within SAP Retail to integrate
standardized production processes via repetitive manufacturing planning table. A typical example is
production of meals in grocery stores.
This process usually covers the following steps:
- Multi-level BOMs for meals using retail master data and PP BOM Maintenance (transaction CS01)
- Production versions
- Run schedule header with product cost collector
- Product costing (CO-PC) (details see also Product Costing (CO-PC)
- Planning table repetitive manufacturing
- Material requirements planning (MRP)
- Procurement of ingredients
- Confirmation of produced items within planning table or via collective confirmation
- Product cost controlling
Results
PP-REM functionality is fully integrated within SAP Retail, using retail master data without any process
restrictions.
However, there are some restrictions regarding master data maintenance.
Restrictions
 Production versions are not integrated within article master maintenance. They have to be
maintained using external mass processing transaction C223 Production Version: Mass
Processing.
 Generic article functionality including matrix handling is not available for PP-REM processes.

© SAP AG 2009, ISM Trading Industries SAP Internal 7


Evaluation Project

Out of Scope

 The document is based on the functionality available with SAP ERP 6.0; no former SAP ERP
releases are considered.
 We assume that customers intend to use all ERP related functions in one system/instance. The
combination of two systems with ALE (Application Link Enabling) connection is of course a
possible scenario but not described in this document.
 This document does not cover Enterprise Service Bundles or the integration of partner solutions.
 It does not describe any new features or specific release content. This document does not
describe any functionality in detail.
 SAP Retail provides new master data, e.g. articles, new applications, e.g. allocation, and several
enhanced standard applications, e.g. purchase orders . Those standard applications are also in
SAP ERP Standard and can be used with retail or non-retail master date. They are not described in
the document.
 The combination of other industry specific functionality with SAP Retail, such as SAP Beverage or
SAP Mobile Direct Store Delivery, is not part of this document. Exceptions are SAP Oil&Gas and
SAP Media.
 The document does not contain any guidelines for implementation.
 We focused in our analysis on the frequently requested use cases and these will be supported. Use
cases not covered by this evaluation are not recommended and thus also not supported by SAP.
 We do not provide any “golden rules”. This means that all use cases that are not described in the
document need to be tested in the customer implementation project before using it.
© SAP AG 2010, ISM Trading Industries 8
Evaluation Results
Management Summary
Major Results

 After activating the Business Function Set SAP Retail all retail-specific functions can be used with
retail-specific master data.
 You cannot reverse the activation of a SAP Retail system.
 All purchasing, logistics and sales functions for Retail (e.g. in Materials Management or Sales and
Distribution) as well as additional non-retail/standard functions can be used with retail-specific
master data
 There are restrictions for some non-retail/standard functions, which are not supported with retail-
specific master data
 In addition all standard functions are still usable with non-retail master data ( e.g. materials).
Exceptions: Material Ledger, MRP areas
 Most of the retail-specific functions cannot be used with non-retail master data (e.g. materials)
 Migration of an SAP ERP system without industry setting into a SAP ERP System with Retail
functions is possible.

© SAP AG 2010, ISM Trading Industries 9


Configuration of SAP Retail

SAP Retail as an Industry Solution

 SAP Retail is an industry solution as it provides specific functionality for the Retail industry.
 SAP Retail is an SAP ERP system which you have configured as a Retail system. It is a part of SAP
for Retail as the overall SAP solution set for the Retail industry.

Configuration
 As of release SAP ERP 6.0, SAP Retail as an Industry Extension is configured by activating the
corresponding business function set ISR_RETAIL (SAP Retail) in the Switch Framework.
 The only business function ISR_RETAILSYSTEM (Retail Enhancements) contains the
ISR_RETAILSWITCH (Retail Switch) switch, which controls the activation of SAP Retail
functionality.
 In the Switch Framework, you also activate the enterprise extension Retail (EA-RET) to make use
of enhancements for retail-specific applications developed after SAP R/3 Enterprise 4.70.
 In the Switch Framework, you also activate the SAP Retail related enterprise business functions
as part of enhancement packages that deliver software innovation for SAP ERP 6.0

© SAP AG 2010, ISM Trading Industries 10


SAP Retail

Facts
 As of release SAP ERP 6.0, SAP Retail as an Industry Extension is configured by activating the
corresponding Business Function Set (BFS) SAP Retail in the Switch Framework.
 The Retail Short Text Replacement – also called Retail terminology conversion - is independent
from the activation of the BFS. For further information please see SAP Note 897714.
 After activation of SAP Retail you can maintain retail-specific master data such as merchandise
categories, sites or articles.
 You can use retail-specific applications that usually require retail-specific master data.
 Many standard apps are enhanced, some features are controlled by the BFS, e.g. matrix in PO
© SAP AG 2010, ISM Trading Industries 11
SAP Retail – Merchandise Category

SAP ERP SAP Retail


Material Group Merchandise Category
Common DB table

T023

Retail-specific
T023 KLAH
enhancements
Specific Maintenance View

All Products Article


Hierarchy
Merchandise
Hierarchy Men Women

Watches Apparel

Hierarchy Tops Pants

Levels
Shirts
Merchandise Category
Knits

Trend shirts

Style 1 Style 2

© SAP AG 2010, ISM Trading Industries 12


SAP Retail – Article

SAP ERP SAP Retail

Material Master Common DB tables Article Master


MARA MAKT MARC MARD

MEAN MLGN MBEW …


and specific DB tables
MKAL … MAW1
MAPE MALG …
Article Maintenance View
Material Maintenance View MARA-ATTYP = blank MARA-ATTYP ≠ blank
00 = Single, 01 = Generic, … Structured Articles

UPC, EAN,
Generic SKU – Shades Assortment rules
Single SKU Status
Maintain basic Assortment
data definition
Units of measure Vendor(s)

Valid period Discount(s)


Maintain
purchase
costs

Sets and Displays


Item (SKU) Cost-plus, MSRP
Maintain
initial retail
price

Maintain
logistics
data Repleneshiment
parameters

© SAP AG 2010, ISM Trading Industries 13


SAP Retail – Site

SAP ERP SAP Retail


Plant Master Site Master
Common DB tables
Address TVKWZ
T001W
Data

specific DB tables

WRF1 WRF6 …
T001W-VLFKZ
T001W-VLFKZ = A (Store)
= blank = B (Distr. Center) Specific Maintenance View

Site category A = Store

Site (Store/DC) (Site category B = DC)

Store type „_‟ = Store


Site
Filiale

Site category A = Store


Department Store
Store type 1 = Departm. Store

Site category A = Store


Shop 1 Shop 2 Shop 3
Store type 2 = Shop

• Department
• Inventory-managed
• Analysis
© SAP AG 2010, ISM Trading Industries 14
SAP Retail – Retail Specific Applications

Facts

 If the BFS SAP Retail is activated you can make use of all retail-specific functions.
 The major difference between an SAP ERP standard system and a SAP Retail system is that in a
SAP Retail system you work with articles instead of materials and sites instead of plants.
 The following functions are retail specific solutions and cannot be used in an SAP ERP standard
system

 Assortment Management / Listing (exception: listing for customers


possible in an SAP ERP standard system)
 Layout Workbench
 Retail Replenishment for Sites
 Retail Promotion Management
 Allocation
 Seasonal Management
 Perishables Procurement: Product Substitution
 POS Interface (POS Outbound and POS Inbound)
 In-store Merchandise Inventory Management (former: SAP Retail Store)
© SAP AG 2010, ISM Trading Industries 15
SAP Retail – Standard Functions

Standard Functions Considered as Part of SAP Retail

 Many SAP ERP functions, especially those to support logistic


processes like purchase orders or goods receipt, are
considered as central for the SAP Retail solution. These
are considered as part of SAP Retail and work with retail-
specific master data.
 Many of those functions were enhanced to fulfill retail-
specific requirements, e.g. the so called matrix to handle generic articles.
 These functions are not in scope of this document.

Standard Functions not Considered as Part of SAP Retail

 On the other hand, many SAP ERP functions are usually not considered as part of SAP Retail,
for example Production Planning.
 Nevertheless, some Retailers or Wholesale Distributors have extended their Retail business
and thus want to use these so called standard functions together with retail-specific master data.
 The following slides depict the most frequently requested standard functions by our customers
and the results of our use case tests.

© SAP AG 2010, ISM Trading Industries 16


Standard Functions with SAP Retail Master Data
Quick results #1

Standard Function Result Restrictions

Batch Management Yes, can be used in SAP Retail -Restricted to single articles and variants of generic
with Retail master data articles
-Batches are not integrated in retail-specific
functionality such as Allocation Tables, Perishables
Procurement, POS Interface, Store Orders
- Batch Classification is not integrated in Article
Master Maintenance, use transaction CL20N

Serial Number Management Yes, can be used in SAP Retail -Restricted to single articles and variants of generic
with Retail master data articles
-not integrated in retail-specific functionality such as
Allocation Tables, POS Interface, Store Orders

Subcontracting Yes, can be used in SAP Retail Restricted to single articles, generic article and
with Retail master data structured articles functionality is not integrated

Stock Overview Yes, 2 options possible - none


Standard stock overview and
Retail stock overview
Sales & Distribution Yes, all functions are available Sales order transaction VA01 is fully supported. The
web dynpro based application (configurable user
interface for sales) is not supported for structured
articles and generic articles with variant matrix
Variant Configuration (LO-VC) Yes, can be used in SAP Retail - Restricted to make-to-order production
with Retail master data - No variant configuration for stock-keeping variants
possible

© SAP AG 2010, ISM Trading Industries 17


Standard Functions with SAP Retail Master Data
Quick results #2

Standard Function Result Restrictions

Production Planning – Production Yes, PP functionality can be - Store-specific work scheduling fields have to be
Order Management (PP-SFC) used in SAP Retail with Retail enhanced to article master data
master data - Site-specific PP customizing settings have to be
added manually
- Restricted to single articles. Generic articles
including matrix are not available
- No BOM explosion for PP BOMs at POS Inbound

Process Production (PP-PI) Yes, PP-PI functionality can be - No co-production fields in article master
used in SAP Retail with Retail - No sub-screen for proportion/product-units in article
master data , also in master
combination with QM and Batch - Restricted to single articles,
Management generic articles including matrix are not available

Production Planning Repetitive Yes, PP-REM functionality can - No integration of production versions in article
Manufacturing (PP-REM) be used in SAP Retail with Retail master maintenance, use external transaction C223
master data - Restricted to single articles,
generic articles including matrix are not available

© SAP AG 2010, ISM Trading Industries 18


Standard Functions with SAP Retail Master Data
Quick results #3

Standard Function Result Restrictions

Financial Accounting (FI) and Yes, all FI/CO functions can be Material Ledger (CO-PC-ACT) cannot be used in
Controlling (CO) used within SAP Retail SAP Retail

Product Costing (CO-PC-PCP) Yes, product cost planning can Store- specific costing data have to be enhanced to
be used in SAP Retail with Retail article master data
master data

Plant Maintenance (PM) Yes, PM functionality can be Site-specific PM customizing tables have to be
used in SAP Retail with article added manually
master data

Quality Management (QM) Yes, QM functionality can be - No integration of quality inspection data in article
used in SAP Retail with article master maintenance, use external transaction QA08
master data - Restricted to single articles. Structured articles and
generic articles including matrix not supported.

Project Systems (PS) Yes, PS functionality can be - Restricted to single articles, structured articles and
used in SAP Retail with article generic articles including matrix not supported.
master data
Recipe Management (SAP PLM) Yes, recipe management from Not included in SAP Retail menu: use direct access
SAP PLM can be used in SAP via transaction RMWB
Retail with article master data

Customer Service (CS) Yes, fully integrated none

© SAP AG 2010, ISM Trading Industries 19


Standard Functions not Supported With SAP Retail
Master Data - Summary

Facts

 Some standard functions are not available for SAP Retail master data
 All standard functions can be used with material/plant master data in an SAP Retail system.
There are only two exceptions: Material Ledger and Material Requirements Planning Area.

Standard Functions
SAP Retail  Production order
 Plant maintenance order
 Quality inspection lots
 …

Retail-specific Master Data Standard Master Data


 Merchandise Category  Material Group
 Site (Store, DC)  Plant (IMG)
 Article  Material

Material Ledger
MRP Area Standard Functions
 Manufacturing of co-products
 Production resources/tools
 Revision levels
 …

© SAP AG 2010, ISM Trading Industries 20


SAP Retail -
Non-supported Standard Functions

 Material Ledger (ML)


• Material Ledger is the basis of actual costing. It enables materials inventories to be
valuated in multiple currencies and allows the use of different valuation approaches.

• SAP Retail:
If you activate the BFS SAP Retail, the core function Material Leger is no longer available. If you already use this
function and want to configure your system as SAP Retail you must first deactivate this function.

• Reason for limitation:


Bad performance impacts cannot be excluded because of high volume of Retailers logistical transactions.
There is also no integration of Retail-specific valuation features like valuation on value-only articles .

 Material Requirements Planning Area (MRP Area)


• An MRP Area represents an (additional) organizational unit for which you can
perform material requirements planning separately.

• SAP Retail:
If you activate the BFS SAP Retail, it is not possible to maintain the required organizational levels in master
data, neither in material master nor in article master maintenance.

• Reason for limitation:


SAP Retail provides retail-specific requirements planning functionality such as Replenishment Planning or SAP
Forecasting which is always site-specific.

© SAP AG 2010, ISM Trading Industries 21


SAP Retail - Standard Functions not Supported
with SAP Retail Master Data

Facts

 Some of standard functions are not available for SAP Retail master data.
 The following list is not complete. Only the most requested functions by Retail customers have
been evaluated.

 Manufacturing of co-production
 Production Resources / Tools
 Foreign Trade
 Valuation levels above the plant (company code)
 Plan article changes (change service)
 Long-term planning for materials
 Revision level for articles
 Manufacturer part number management
 Proportion unit, active ingredient unit of measure
 Creation of articles using the CAD interface
 Inflation handling for South America

© SAP AG 2010, ISM Trading Industries 22


Usage of Retail Functionality in SAP ERP
Standard
Motivation

 Some customers, especially wholesale distributors, have only limited retail business
requirements.
 They want to use the SAP ERP standard system together with selected retail-specific functionality,
like retail pricing.

Facts

 Only a few retail-specific functions can be used with materials and plants instead of
articles/sites/merchandise categories.
 However, there are restrictions when using these functions with SAP ERP standard master data.
 These functions can be used without activating the Business Function Set SAP Retail

© SAP AG 2010, ISM Trading Industries 23


Usage of Retail Functionality in SAP ERP Standard
Quick results

Retail Result Restrictions (Details in notes)


Functionality
Retail Pricing Yes, can also be used with materials and plants Download of retail prices using the POS Outbound
application component is not possible
Retail Yes, the vendor consignment can also be used  Field for consignment is not available in material
Consignment with materials and plants master and needs to be set up in customizing.
 No integration with POS systems
Listing for Assortments can be created for customers and None
Customers the system checks within the sales order creation
process whether the customer is allowed to order
Collective Yes, collective purchase orders can be used with  Maintenance view for assigning distribution
Purchase Order materials and customers as recipients profiles to plants is missing.
 Allocation functionality to plan the distribution is
not available
Perishables Perishables procurement was explicitly  In SAP Retail you can maintain in the site master
Procurement developed for both SAP ERP Standard and SAP data which distribution center is allowed to deliver
Retail. It supports the creation of sales orders as to which store. In SAP ERP Standard the concepts
well as purchase orders of supplying sites is not available. In order to find
the allowed delivery plant in SAP ERP Standard
you need to use the delivery relationship
determination (DRD) functionality
 Product substitution works only within SAP Retail

© SAP AG 2010, ISM Trading Industries 24


Migration SAP ERP to SAP Retail

Facts

 SAP customers with SAP ERP Standard System want to extend their business portfolio and are
interested in SAP‟s industry solution for Retailers.
 In this case they have to migrate their existing ECC system and data to SAP Retail.
 As of release SAP ERP 6.0, this means first of all, that they have to activate the corresponding
Business Function Set (BFS) SAP Retail in the Switch Framework.
 Prerequisites:
- Your current ECC application must not have any industry solution activated
(with exception of SAP Oil&Gas and SAP Media)
- You are in possession of a valid licence for SAP Retail

 The Migration process involves the following steps: Note:


BFS SAP Retail
 Activating Business Function Set SAP Retail cannot be
 Enhancing Material Groups to Merchandise Categories de-activated
 Enhancing Plants to Sites (Distribution Center or Store)
 Conversion of Materials to Articles
 Article Listing
 Conversion of texts to retail specific terminology (optional)

FS Trade Hub offers training and consulting services to ensure successful migration projects

© SAP AG 2010, ISM Trading Industries 25


SAP Retail and Other Industries

Motivation

 Other industries might be interested in using retail-specific functionality in addition to their core
business, for example oil companies want to operate their convenience stores with SAP Retail

Facts

 The switch framework allows activating only one Business Function Set.
 The industry who wants to adopt functionality of another industry can integrate the corresponding
business function into the own business function set and ensure compatibility with the own
solution by thorough testing.

Examples

© SAP AG 2010, ISM Trading Industries 26


SAP Retail and other Business Suite
Components
Motivation

 To support various retail and wholesale distribution


processes, additional applications of the
SAP Business Suite are needed
 Customers want to use for example
SAP Extended Warehouse Management together
with SAP Retail

Project
Assumptions
 In our analysis we focused on the most relevant
solutions for Retailer and Wholesale Distributors
 We only focused on the integration issue with
SAP Retail. We did not assess the solution fit
of the corresponding applications with the
business requirements of a Retailer or
Wholesale Distributor

SAP’s Integrated
Solution for Retail

© SAP AG 2010, ISM Trading Industries 27


SAP Retail and Other Selected Business
Suite Components

 SAP Supply Chain Management


 SAP Customer Relation Management
 SAP Supplier Relation Management
 SAP Product Lifecycle Management
 SAP Business Objects Global Trade Services

Facts

 This is not a complete list of retail-relevant Business Suite components, even within the Business
Suite components we evaluated the most relevant applications only.
 The evaluation was restricted to the integration with SAP Retail. The detailed document does not
contain an assessment of the applications regarding their solution fit for retailers.

© SAP AG 2010, ISM Trading Industries 28


Usage of Selected SAP for Retail Solutions
With SAP ERP Standard

 SAP Forecasting and Replenishment


 SAP Merchandise and Assortment Planning
 SAP Price Optimization / SAP Markdown Optimization
 SAP POS Data Management

Facts

 These solutions are designed especially for Retailers and integrated with SAP Retail
 Hence, there is no out-of-the-box integration with an SAP ERP standard system.

© SAP AG 2010, ISM Trading Industries 29


Further Information

Navigate to Retail@BPX and discover the wealth of


http://BPX.SAP.COM information on retail solutions offered to you by
SAP‟s Solution Management, Development, and
Learn. Find. Share. Global Hub aimed at increasing your personal
expertise and your project‟s success.

Check out Retail Wiki – THE SAP for Retail product


repository on BPX

Connect and network on Trade Forum to get answers

Establish yourself as an expert and a thought leader

Retail Landing Page: http://www.sdn.sap.com/irj/bpx/retail


Retail Wiki: http://wiki.sdn.sap.com/wiki/display/Retail/IS-Retail
Trade Forum: http://forums.sdn.sap.com/forum.jspa?forumID=294

© SAP AG 2010, ISM Trading Industries 30