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  • 1. SAP Forecasting & ReplenishmentSolution Update and OutlookForecasting and Replenishment User Forum BostonJune 2012
  • 2. © 2011 SAP AG. All rights reserved. 2RKTThe information in this presentation is confidential and proprietary to SAP and may not be disclosed withoutthe permission of SAP. This presentation is not subject to your license agreement or any other service orsubscription agreement with SAP. SAP has no obligation to pursue any course of business outlined in thisdocument or any related presentation, or to develop or release any functionality mentioned therein. Thisdocument, or any related presentation and SAPs strategy and possible future developments, products andor platforms directions and functionality are all subject to change and may be changed by SAP at any timefor any reason without notice. The information in this document is not a commitment, promise or legalobligation to deliver any material, code or functionality. This document is provided without a warranty of anykind, either express or implied, including but not limited to, the implied warranties of merchantability, fitnessfor a particular purpose, or non-infringement. This document is for informational purposes and may not beincorporated into a contract. SAP assumes no responsibility for errors or omissions in this document, exceptif such damages were caused by SAP´s willful misconduct or gross negligence.All forward-looking statements are subject to various risks and uncertainties that could cause actual resultsto 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 makingpurchasing decisions.Legal disclaimer
  • 3. © 2011 SAP AG. All rights reserved. 3RKTSAP and SAF – a long-term relationship One decade of co-innovation between SAP andSAF on SAP Forecasting and Replenishment Acquisition of SAF finalized on September 27th Major decisions and benefits Integration of SAF product offering into SAP portfolio enablemore flexibility in going to market Increasing expertise in sales, consulting and development for oneof the most critical Retail business scenarios Joining forces in product strategy on our way forward to the nextgeneration of solutions Extension of current offering for Forecasting and Replenishmentin Retail and beyond Industry know-how and science meet on future platforms – in-memory, mobile technology
  • 4. © 2011 SAP AG. All rights reserved. 4RKTPlanned innovations Future directionSolution todayOverview of SAP road map for Forecasting & ReplenishmentPlan and marketbetterSupply anddistributebetterSell and servicebetterOperate betterOn Shelf AvailabilityCAR, UDFF&RIntegrated PlanningDemand Planning,Replenishment, Allocation
  • 5. © 2011 SAP AG. All rights reserved. 5RKTSolution today Planned innovations Future directionOverview of SAP road map for Forecasting & ReplenishmentPlan and marketbetterSupply anddistributebetterSell and servicebetterOperate betterOn Shelf AvailabilityCAR, UDFF&R
  • 6. © 2011 SAP AG. All rights reserved. 6Retail 2012Solution portfolioSolution todayShopper insightMerchandise and assortmentProduct, store, and customer lifecycleLifecycle pricingMarketing and promotionsLoyalty managementFinanceReal estate and asset managementHuman capitalRisk and complianceSustainable operationsIntegrated demand and replenishment planningSourcing and buyingIntegrated product developmentPrivate label productionLogistics and fulfillment managementSupply chain performance mgmtStore and point of saleE-commerceM-commerceSocial mediaCustomer service contact centerCustomer service managementMultichannel order managementBusiness intelligenceIT operational and service excellenceEnterprise information managementEnterprise data warehousingBusiness integrationUser productivityFocus innovations in 2011
  • 7. © 2011 SAP AG. All rights reserved. 7SAP® Forecasting andReplenishment for RetailSAP® Forecasting andReplenishment for Retail –for use with SAP Merchandisingfor Retail(standard integration)SAP® Forecasting andReplenishment for Retail –for use with other merchandisingsolutions(open integration)Flexible deployment - tailored to customers’ needsUniform pricing - attractive also for midmarket companiesOne future roadmapOnebrandTwodeploymentoptionsYoursolutionSAP Forecasting & ReplenishmentBranding
  • 8. © 2011 SAP AG. All rights reserved. 8SAP Forecasting & ReplenishmentCustomers, sub-segments, implementations• All regions: EMEA, NA, LA and APJ• All sizes: LE, ME A 20 bn CHF multi format Retailer in Switzerland A 50 mil EUR supermarket chain in Dominican Republic• All segments: General Merchandise: DIY, furniture, consumer electronics, etc. Grocery, convenience, drugstores Fashion / department stores• All scenarios: Store replenishment DC replenishment Multi-level replenishment• All deployment options: Integrated with SAP Merchandising Open Integration / stand-alone
  • 9. © 2011 SAP AG. All rights reserved. 9 Almost full automation of replenishment process through highacceptance rate of generated order suggestions with reduction ofout-of-stocks from 8 to 2% Reduction of out-of-stocks by 75% with simultaneous reduction ofwarehouse stock by 10% Reduction of inventory levels in the store by 13% with almostcomplete elimination of order costs (96%) Reduction of inventory level by 20% with increase of servicedegree to 98,5% Increased sales by more than 1% and about 70% OOS reductionin some locations due to automated replenishmentOther references: Axfood, COOP Norge, Dohle Handelsgruppe (Hit), EDEKA , Grupo ElArbol, Jysk, MassStores, Tegut, Pick‘n‘PaySAP Forecasting & ReplenishmentCustomer successes
  • 10. © 2011 SAP AG. All rights reserved. 10Solution Enhancements Key Benefits Fully automated storereplenishment for optimizedproduct availability Advanced DC replenishment withtruck load optimization to meetsupplier restrictions Sophisticated algorithms, yetrobust, high-volume processingcapabilities Transparency and insight intoresults provided throughout allsteps of the process One solution for multi-leveloptimization Packaged offering available for fasttrack implementation Two deployment options – fullyIntegrated with SAP Merchandisingas well as open integration (stand-alone)Solution today Reduction of cost of ordering,inventory and logistics cost alongwith reduction of carbon footprint Support for ranging decisions andsupply chain transformation Visibility and usability to keep trackof all relevant KIP’s in theorganization Reduced TCO through deploymentof one solution serving allscenariosSAP Forecasting andReplenishment provides automatedcapabilities for demand-drivenreplenishment to synchronizeinventories along the supply chain,improve in-stock positions andreduce cost.Solution HighlightsSAP Forecasting & ReplenishmentSolution Highlights
  • 11. © 2011 SAP AG. All rights reserved. 11Decision ImplementationPiloting Rollout OperationModeling Service - Store DIFStrategic Inventory Parameter OptimizationWhat-if AnalysisPack Size Opt.Feasibility StudyOptimalProfitabilityYoung FashionRealityF&R Optimization Services for RetailSolution todayModeling Service - Product DIF* DIF = Demand Influencing Factor
  • 12. © 2011 SAP AG. All rights reserved. 12Solution Enhancements Key BenefitsSAP Forecasting & ReplenishmentLatest innovations Enhanced capabilities for truckload optimization Forecast improvements Enhancements in order forecast(order forecast for aggregation) Consider time-dependent datafor promotions More detailed information aboutautomated calculation steps Improved user interfaces, e.g.within the replenishmentworkbench Improved exception handling Enhanced connectivity of SAPF&R with SAP ERP for Retail,e.g. source list integration andtransit stock considerationSolution today Reduction of purchasing andlogistical cost Increased forecast accuracyleads to better results Improved support of multiechelon scenarios with the newOrder Forecast for aggregation Improved accuracy ofpromotional forecasts Improved traceability ofautomated processes Better usability for increasedefficiency Reduced TCO through betterintegration with SAP ERP forRetailRelease 5.2 of SAP Forecastingand Replenishment StandardIntegration provides moresophisticated functionality for DCreplenishment as well as usabilityimprovements.
  • 13. © 2011 SAP AG. All rights reserved. 13Solution Enhancements Key Benefits Investment Buying Enhanced capabilities for truckload optimization Forecast improvements Enhancements in order forecast(order forecast for aggregation) Consider time-dependentinformation for promotions More detailed information aboutautomated calculation steps Improved management ofunknown DIFs Improved usability ofDataAnalyzerSolution today Reduce purchasing costs andtake advantage of supplierpromotions Reduction of purchasing andlogistical cost Increased forecast accuracyleads to better order proposals Improved support of multiechelon scenarios with the newOrder Forecast for aggregation Improved accuracy ofpromotional forecasts Improved traceability ofautomated processes Higher degree of automation Increased efficiencyRelease 2.2 of SAP Forecastingand Replenishment OpenIntegration provides moresophisticated functionality for DCreplenishment as well as usabilityimprovements.SAP Forecasting & ReplenishmentLatest innovations
  • 14. © 2011 SAP AG. All rights reserved. 14Future directionSolution today Planned innovationsOverview of SAP road map for Forecasting & ReplenishmentPlan and marketbetterSupply anddistributebetterSell and servicebetterOperate betterOn Shelf AvailabilityCAR, UDFF&R
  • 15. © 2011 SAP AG. All rights reserved. 15Key BenefitsSolution EnhancementsUsability improvements Order Lists Table enhancements Fast Actions buttons User preferences as tabs, with small button Configurable widths of columns Extended screen resolution and browser compatibility Customer specific exception descriptions Display polling time, polling dayPerformance improvements Pre-calculation of active predictors in B Pre-calculation of demand in BIFunctional improvements Completion of order review process Filtering / sorting by customer specific info Exception acknowledgement for order lists Reporting APIPlanned innovations Increased flexibility and configurability of userinterface Better response times Valuable customer specific enhancements added tostandard productSAP Forecasting & ReplenishmentPlanned enhancements for F&R stand-alone
  • 16. © 2011 SAP AG. All rights reserved. 16Solution Enhancements Key Benefits Consideration of customer salesorders as exceptional demand Enhanced integration of SAPPMR with SAP F&RPlanned innovations Reduction of out-of-stocks due tounplanned orders Improved transparency andvisibility in F&R Aligned promotional forecastquantities in promotion planningand replenishment. Significant reduction of datamaintenance for promotionalperiodsRelease 5.2, SP03 of SAPForecasting and ReplenishmentStandard Integration providesimprovements in transparencyand integration.SAP Forecasting & ReplenishmentPlanned enhancements for F&R integrated
  • 17. © 2011 SAP AG. All rights reserved. 17Customer Activity RepositoryFoundation for predictive retail applicationsWeb ChannelOnShelfAvailabilityAssortmentPlanningPromotionPlanning (PMR)MerchandisePlanningPriceOptimizationMarkdownOptimizationLoss PreventionAnalyticsPartnerSolutionsCustomSolutions……DashboardsMobilePOSFinancialPlanningDemandPlanningCustomerSegmentationPOS SalesAuditReplenishment& AllocationCustomerActivityRepositoryMarket DataDemographicsSocial MediaCustomerPromotionsMulti-Channel SalesMerchandisePredictiveAnalyticsRetail Analytics Model & KPIsAssortmentLocationsClick StreamMultipleChannelsInventoryGoods MovementsBW / HANA…
  • 18. © 2011 SAP AG. All rights reserved. 18Solution Enhancements Key Benefits Predefined data model to capturesales transactions across channelsin one consolidated repository Enriched data model to supportflexible reporting and analytics Real time feed of sales data fromany channel Data cleansing, auditing andenrichment as well as errorresolution functionality providedthrough POS DM Instant aggregation to any desiredlevel while data is kept at lowestlevel Foundation for predictiveapplications (e.g. MAP, PMR,F&R) Unified forecasting enablesprediction of future sales and oneversion of truthPlanned innovations Real time visibility into consumersales data across channel andchannels specific down totransaction level Instant aggregation to any desiredlevel without losing the detailedinformation (keep data at lowestlevel) Support flexible, high speedanalytics and calculation of massdata Avoid replication of POS data andperform extensive calculations andpredictive analytics where the dataresides Common foundation and oneversion of truth for predictiveapplications Historic and predictive sales dataavailable in one viewCustomer Activity RepositoryThe first release of the in-memorybased Customer Activity Repositoryprovides real time access andvisibility into consumer sales dataacross channels. A game changingfoundation to process and analyzeconsumer behavior and impact onfuture business in real time.
  • 19. © 2011 SAP AG. All rights reserved. 19Solution Enhancements Key Benefits Analyze on-shelf-availability forall types of products – slow orfast movers – using scientificalgorithms which analyze salespatterns. Provide historic analysis ataggregate levels as well as realtime analysis based on real timePOS data. Based on POS DM using in-memory technology (HANA). No perpetual inventory at storelevel is needed. If available, system inventory andother information can be used toanalyze possible root cause Available on iPAD, easy to usefor store associates, alert driven.Planned innovations Store Managers and VP of Salescan analyze on-shelf availability ataggregate level to detect patternsof occurrence (e.g. weekdays,categories, daytimes, etc),analyze root causes and takecorrective measures to preventthem from happening in thefuture. Store associates can detect on-shelf availability in real time forpromotional and non-promotionalproducts, respond directly andtake corrective actions. Perpetual inventory at store levelis no prerequisite but can be usedto provide additional informationto analyze root cause. Helps store managers to optimizeresource deployment.Inventory AnalyticsOn-Shelf AvailabilityOn-Shelf-Availability analysisprovides visibility to on-shelfsituations in retail stores. It can beused to analyze patterns of out-of-shelf situations after the fact toproactively prevent them in thefuture or it can be used to detectand visualize on-shelf availabilitysituations when they happen in realtime and take immediate actions toprevent further lost sales.
  • 20. © 2011 SAP AG. All rights reserved. 20Future directionPlanned innovationsSolution todayOverview of SAP road map for Forecasting & ReplenishmentPlan and marketbetterSupply anddistributebetterSell and servicebetterOperate betterOn Shelf AvailabilityCAR, UDFF&R
  • 21. © 2011 SAP AG. All rights reserved. 21Integrated retail planning processesFinancialPlan3-5 years High level salesplan (sales,margins,markdowns) By channel, month,store type ManagementobjectiveAssortmentPlan12 months/ 1 season Assortment planseasonal products Key item plan non-seasonal products Units retail, cost By location groupPromo, Price,Markdown Plan12 to 0 weeks Promotions, pricesand markdowns Hit revenue targetfrom merch. plan By category, byweek/day Bottom-upMerchandisePlan12 months For season/quarter Revenue, profit,margin by merch.group By month/week Bottom-upMarketingPlan18 months Number of campaigns Budget for campaigns Profit By channel, customersegment Top-downDemand (andSupply) PlanContinuous / In-season Demand analysis In-Season monitoring Demand / supplymatch Drive activities, suchas ordering,campaigns etc.OperationalProcessesOperative horizon Purchasing InventoryManagement Warehousing Transportation Etc.AllocationPlanPre-season / in-season Automatic or system-supported allocationof fixed quantitiesacross multi-levelsupply network Demand drivenallocation in-seasonReplenishmentPlanContinuous Automatic orderingof re-orderableproducts Multi-level supplynetwork
  • 22. © 2011 SAP AG. All rights reserved. 22SAP Forecasting and ReplenishmentFuture directionMerchandisePlanningPromotionPlanningAssortmentPlanningPricePlanningMarkdownPlanningCustomer Activity Repository (CAR) on HANACommon data foundation for multi channel analytical reporting and predictive applications in Retail2012 2013 2014 2015 >>Unified DemandForecastOn-Shelf AvailabilityAnalysisDemandPlanningReplenishmentPlanningReplenishment &Allocation PlanningF&R 5.2 SP03 (for use with SAP Merchandising Software)F&R 2.2 SP01 (for use with other Merchandising Software)Planned DeliveryOptimizationServices
  • 23. Appendix: Planned
  • 24. © 2011 SAP AG. All rights reserved. 24Solution Enhancements Key Benefits Functionality– Cell locking (enhanced)– Rules of precedence Implementation– RDS Package for Planning (SAPPlanning for Retail – ChannelFinancial, Merchandise and KeyItem Planning)– New ABAP based planning modeler Premium Microsoft Office userinterface: SAP Business ObjectsAnalysis, edition for Microsoft Office– Conditional formatting– Filters by measure– Notes at cell level– Sort breaks by hierarchy– Easy and dynamic calculations– Interactive multi dimensionalanalysis SAP Planning for Retail powered byHANA– Planning engine and StarterPackage supportPlanned innovations Functionality– Complete session locking– Flexible rules based calculation Implementation– Reduced implementation cost– Simplified implementation– Best business practice templates User Experience– Superior user experience for powerusers– Excel based application design– Common user experience forplanning and reporting / analytics– Easy publishing to MS Power Pointand Live Power Pointpresentations– Superior user experience foroccasional users– Custom / industry specific planningfeatures Performance– High volume, high speed Innovation without disruptionMerchandise & AssortmentIn-Memory Retail PlanningThe SAP Planning Suite forRetail evolves to an in-memory planning applicationwith best in class userexperience and a highlyflexible planning engine.
  • 25. © 2011 SAP AG. All rights reserved. 25Solution Enhancements Key Benefits Enhance offer construction speedand performance through masscreation and maintenancecapabilities Enhanced display planning andforecasting capabilities More flexible desktop publishingviews and integration with thirdparty printing and executionsystems Option to leverage a HANAbased platform with on-demanddatabase General usability enhancementsand feature updates to improveoverall performancePlanned innovations Reduce data entry times withautomation and reduced clicks Integrate with display planningand planogram systems –including forecasting and in-storeplacement Reduce promotional print andexecution costs Improve financial analytics andperformance measurements nowpossible with speed and flexibilityof HANA databaseMarketing & PromotionsPMR Enhancements and HANA InfrastructureThe SAP PromotionManagement for Retailapplication extends to a HANAinfrastructure and enhancesdisplay planning features,desktop publishing functionality,and general performance andusability.
  • 26. © 2011 SAP AG. All rights reserved. 26RKTNo part of this publication may be reproduced or transmitted in any form or for any purposewithout the express permission of SAP AG. The information contained herein may bechanged without prior notice.Some software products marketed by SAP AG and its distributors contain proprietarysoftware components of other software vendors.Microsoft, Windows, Excel, Outlook, and PowerPoint are registered trademarks of MicrosoftCorporation.IBM, DB2, DB2 Universal Database, System i, System i5, System p, System p5, System x,System z, System z10, System z9, z10, z9, iSeries, pSeries, xSeries, zSeries, eServer,z/VM, z/OS, i5/OS, S/390, OS/390, OS/400, AS/400, S/390 Parallel Enterprise Server,PowerVM, Power Architecture, POWER6+, POWER6, POWER5+, POWER5, POWER,OpenPower, PowerPC, BatchPipes, BladeCenter, System Storage, GPFS, HACMP,RETAIN, DB2 Connect, RACF, Redbooks, OS/2, Parallel Sysplex, MVS/ESA, AIX,Intelligent Miner, WebSphere, Netfinity, Tivoli and Informix are trademarks or registeredtrademarks of IBM Corporation.Linux is the registered trademark of Linus Torvalds in the U.S. and other countries.Adobe, the Adobe logo, Acrobat, PostScript, and Reader are either trademarks orregistered trademarks of Adobe Systems Incorporated in the United States and/or othercountries.Oracle is a registered trademark of Oracle Corporation.UNIX, X/Open, OSF/1, and Motif are registered trademarks of the Open Group.Citrix, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, and MultiWin aretrademarks or registered trademarks of Citrix Systems, Inc.HTML, XML, XHTML and W3C are trademarks or registered trademarks of W3C®, WorldWide Web Consortium, Massachusetts Institute of Technology.Java is a registered trademark of Sun Microsystems, Inc.JavaScript is a registered trademark of Sun Microsystems, Inc., used under license fortechnology invented and implemented by Netscape.SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP BusinessObjects Explorer,StreamWork, and other SAP products and services mentioned herein as well as theirrespective logos are trademarks or registered trademarks of SAP AG in Germany and othercountries.© 2011 SAP AG. All rights reservedBusiness Objects and the Business Objects logo, BusinessObjects, Crystal Reports, CrystalDecisions, Web Intelligence, Xcelsius, and other Business Objects products and servicesmentioned herein as well as their respective logos are trademarks or registered trademarksof Business Objects Software Ltd. Business Objects is an SAP company.Sybase and Adaptive Server, iAnywhere, Sybase 365, SQL Anywhere, and other Sybaseproducts and services mentioned herein as well as their respective logos are trademarks orregistered trademarks of Sybase, Inc. Sybase is an SAP company.All other product and service names mentioned are the trademarks of their respectivecompanies. Data contained in this document serves informational purposes only. Nationalproduct specifications may vary.The information in this document is proprietary to SAP. No part of this document may bereproduced, copied, or transmitted in any form or for any purpose without the express priorwritten permission of SAP AG.This document is a preliminary version and not subject to your license agreement or anyother agreement with SAP. This document contains only intended strategies, developments,and functionalities of the SAP® product and is not intended to be binding upon SAP to anyparticular course of business, product strategy, and/or development. Please note that thisdocument is subject to change and may be changed by SAP at any time without notice.SAP assumes no responsibility for errors or omissions in this document. SAP does notwarrant the accuracy or completeness of the information, text, graphics, links, or other itemscontained within this material. This document is provided without a warranty of any kind,either express or implied, including but not limited to the implied warranties ofmerchantability, fitness for a particular purpose, or non-infringement.SAP shall have no liability for damages of any kind including without limitation direct,special, indirect, or consequential damages that may result from the use of these materials.This limitation shall not apply in cases of intent or gross negligence.The statutory liability for personal injury and defective products is not affected. SAP has nocontrol over the information that you may access through the use of hot links contained inthese materials and does not endorse your use of third-party Web pages nor provide anywarranty whatsoever relating to third-party Web pages.