AFS EVENT

Value Proposition & Proposed Solution

AFS covers the entire process from conception of new collections and styles to collaborative planning and forecasting, sales and distribution, procurement of finished goods and components as well as in-house and external, subcontracted manufacturing. AFS supports Make-To-Stock (MTS) business as well as Make-To-Order (MTO) processes typically found at contract manufacturers.

SAP Best Practices for Apparel & Footwear (AFS)

Strategies for success

Apparel and footwear companies can differentiate their business within this rapidly changing And highly competitive market by utilizing the following strategies for success:

• Integrate business processes and people resulting in a more efficient work flow

• higher productivity and lower costs

• Strategically linking business from procurement through to sales and distribution to ensure consistent quality, regulatory compliance and increased customer satisfaction.

• Creation of seamless operations that provides management with timely and strategic information. This ensures faster time-to-market and enables enterprise to take on new challenges and business opportunities.

• Setting the stage to manage change – keeping pace with industry mergers, business improvements and a changing customer focus – whilst maintaining

control and financial stability.

AFS Unique Functionalities

• Product Development• Collaborative Product Development• AFS Master Data• Theme/ Collection/ Season• Valuation/ Costing• SAP e-Commerce for SAP CRM• Set & Assortment• Value Added Services• Order Types- Standard, Rush, Multi-store• Contract Call off• Production Order- External Processing• Distribute & Deliver cockpit• Allocation Run• Rescheduling• Seasonal Dashboard

Challenges faced by Apparel and Footwear Industry

• Growing customer demands• Seasonality• rapid time-to-market• competitive environment• Product obsolescence on shelves• Cost control• Geographical spread of operations

SAP Apparel and Footwear Solution Map

Suppliers & Partners

Consumers, Customers (e.g.

Retailers) & Channel Partners

Design, Plan & Forecast Procure & Manufacture Go-to-Market Sell Deliver & Service

Strategic Planning

Ranging & Planning

Time-to-Market

New Product Development and Introduction

Integrated Supply Chain Planning

Demand & Supply Planning

Production Planning & Detailed Scheduling

Sourcing & Procurement

Strategic Purchasing and Sourcing

Procure To Pay

Sales & Marketing

Order-to-Cash

Brand Equity Management

Account Management

Sales Force Management

Demand Fulfillment & Execution

Manufacturing

Inbound & Outbound Logistics

Data Exchange & Legal Requirements

Traceability & Environmental Compliance

Global Data Synchronization

Enterprise Management & Support Analytics

Financials

Human Capital Management

Corporate Services

Operations Support

Production Planning and

Control

Scenarios for the Apparel and Footwear Industry

Sales Order Processing

Finished Goods Cross

CompanyRushorder Purchase to

Order

Finished Goods

Sourcing

Combined Order

AFS SD Basic Settings

AFS PP Basic Settings

AFS MM Basic Settings

Warehouse Management

Make to Stock

…

Own Building Block

Own Building Block

Own Building Block

Own Building Block

Own Building Block …

Pre-Order

Finshed Goods Sourcing

…

Own scenario

Own scenario

Preconfiguration Documentation Print Forms End user training Testing Localization

BuildingBlock

SAP Best Practices is a platform of reusable and layered content Building Blocks out of which fully functioning end-to-end scenarios are composed

To compose your own solution, deselect unnecessary Building Blocks from SAP and add your own

Customer view

AFS MM Basic Settings

OrganizationalStructure

ExternalAccounting

Cost/PC Accounting

Materials Management

Sales & Distribution

Internal Procurement

Batch Management

Product Cost Planning

Extended Sales Order

Central Master Data

…

OrganizationalStructure

ExternalAccounting

Cost/PC Accounting

Materials Management

Sales & Distribution

Batch Management

Internal Procurement

Extended Sales Order

Central Master Data

Sales Order Processing

AFS SD Basic Settings

…

Sales Order Processing

SAP Modules Integration

Typical AFS Planning and Production

AFS Planning and Production Process

Sales Planning-Flexible Planning-Management Perspective

• In SAP AFS, Sales Planning can be addressed through “Flexible Planning”

• In Flexible planning a planning hierarchy is created where in the hierarchy could be i.e Plant Dist Channel Division Product Group Material

• Advantages are –Planning versions can be created and can be compared

Sales Planning-Flexible Planning-Customer Perspective

Master data in AFS

AFS Material Master

AFS Specific Functionalities

AFS Material Grids

Application Grids

AFS Segmentation with Categories

AFS Seasons Functionality

AFS BOM Types

AFS Bill of Material

AFS materials contain information about colors, sizes and qualities that are stored in grids and categories.

Due to the data quantity, there are certain requirements for the bill of material that must be covered by AFS. These requirements are also used as a quantity structure for the product costing

BOM – QTY DISTRIBUTION PROFILE

• The quantity distribution profile facilitates the data maintenance in the bill of material.

• Example - You produce ladies' blazers and know from experience that you have an

excess consumption of 2% per size. .

AFS Pre-pack (Pricing at Header level)

AFS-Assortment (Pricing at Item Level)

Value Added Services

Third Party Ordering Process

In third party order processing, your company passes a sales order on to an external supplier, or third party, who then sends the goods directly to the customer. Nevertheless the invoice is issued by your company

Allocation Run

The special situation of the apparel and footwear industry requires an optimization of the assignment of existing stock to open requirements.

If a stock shortage occurs, the allocation run ensures an optimal assignment of stock to the open requirements.

The allocation run distributes the currently available stock to due sales orders according to certain calculation logics at a specific time.

If the ordered quantities are larger than the actually available stock, you can use the allocation run to reach the best customer satisfaction under the given circumstances in your business.

You can use the ARun Optimizer, you can check and manually correct the results of the allocation run if necessary.

AFS Multi Store Order

Presizing Functionality

• Presizing lets you automatically spread the requirement based on the Distribution Profiles to different

• Plants,Categories,Periods,Grid values

Sales Processing in AFS

Internal Production

Internal Production

Grouping Grouping Sorting Sorting Allocation Allocation Release Release

ExternalProcure-

ment

ExternalProcure-

ment

PlannedOrder

PlannedOrder

PurchaseRequisitionPurchase

Requisition

Production Order

Production Order

Source Allocation

Source Allocation

ProductionActivityControl

ProductionActivityControl

PurchaseOrder

PurchaseOrder

Goods Receipt Goods

Receipt

Selection Selection

Sales Order Processing

Allocation Run

Procurement Process

ATP ATP

MRPFile

SalesOrder

Procure-ment

AllocationRun

DeliveryTransfer order andPost GoodsIssue

Invoice andFinancial

Accounting

Credit Management within Sales Process

Billing Billing

Invoice

Sales Order Processing

Sales Order Processing

Inventory Sourcing

Inventory Sourcing

ShippingShippingPaymentPayment

Pre-Sales ActivitiesPre-Sales Activities

Goods leave the company – „Point of no return“

Check !

Good customer or Bad customer ???

Check !

Scenario: Make-to-Stock

MRP

PlannedOrder

Production Order

Planning

Combined Order

Independent RequirementsIndependent Requirements

Manufacturing

Manufacturing

Goods Receipt

Manufacturing

BOM explosionBOM explosion

Several production orderscombined into one

Several production orderscombined into one

Combined Order is cut

Combined Order is cut

Production orders are processed

individually

Production orders are processed

individually

Goods receipt for individual production

orders

Goods receipt for individual production

orders

Procurement of Components

Procurement of Components

Scenario: Make-to-Order

Profit Analysis

Billing to Customer

Pre-order

Customer Sales Order

Centralized Purchasing

Manufacturing in Factory

Delivery to Customer

Book production capacity + export quota

Book production capacity + export quota

Detailed Product Specification

Detailed Product Specification

ProcurementProcurement

AccessoriesAccessories

Monitoring from Head OfficeMonitoring from Head Office

Direct Delivery of ComponentsDirect Delivery of Components

Shipment to Customer (DC)

Shipment to Customer (DC)

Procurement: Business Process Material Procurement

Determination of requirements

1

Determination of source of supply

2

Material Procurement

Vendor selection

3

Orderprocessing

4

Purchase order monitoring

5

Goods receipt

6

Invoice verification

7

Paymentprocessing

8

Requirement to Buy

Allocate Source Of Supply

Order ProcessingOrder Follow Up

Service & Goods Receipt

Invoice Verification

MM

Purchase to Pay process

Production Planning - Highlights

Sales and Operations Planning – Flexible Planning

Statistical Dimension Distribution

APO – Demand Planning

Bills of Material – size / color dependent

Phantom Assembly

MRP at Material and SKU Level

MRP evaluation options

Missing Parts List

Order Progress Report

Combined Production Order

Production Planning

Product Cost Controlling and Valuation

The basis of the costing of a product is its quantity structure. In the product costing the quantity structure is based on the specifications of the BOM and the routing.

In the AFS system, the quantity structure of a product can be defined as grid/category-dependent. Product costing considers these grid/category-dependent specifications. When costing a certain stock keeping unit, the system explodes the bill of material for the corresponding SKU and determines the relevant routing.

Product Costing in AFS

Complete Financial Solution

General Ledger Legal ConsolidationAccounts Receivables

Accounts Payable

Asset Accounting

Budgeting

Overhead Cost Controlling

Activity Based Costing

Cash Management

Treasury

Funds Management

Payroll

Check Printing

Parallel AccountingAnalytics

Expense Management

Billing

Profitability Analysis

Streamlines information control, analysis, and delivery

Enables performance planning, measurement, and management

Optimizes the financial supply chain

Most comprehensive, functionally-rich solution on the market

Market-leading solutions and customers in all industries

Reliable, proven business partner with solution and industry expertise

Joint Venture Accounting

One solution addressing all financials roles • One consistent platform for all people involved in finance processes

Work environments tailored to the role of the user to maximize people productivity

SAP ERPFinancials

Account

Close

Analyze

Report

General Ledger

AuditSupport/AIS

xAPP Analytics

BusinessConsolidation

Strategic EnterpriseManagement

Management ofInternal Controls

FinancialAnalytics

ClosingCockpit

IntercompanyReconciliation

Payables / ReceivablesFixed Assets

…

Controller

CFO

FinancialAnalyst

Accounting ClerkAsset Manager …

Internal Auditor

Accountant

Cost CenterInternal Orders Profit-Center

…

Corporate Accountant

Cash ManagerTreasurer …

Cash&LiquidityTreasury

…

Head of Strategy

Business Area Controller

Head of Finance

Head of Corporate Reporting

Profitability Analysis Reports

Management accounting

HRHR

ProductionOrder

Process

InternalOrder

Material ValuationCost

Center

EC-EC-PCAPCA

Pro

fit Cen

ter Acco

un

ting

Product Cost Controlling

Overhead Cost Controlling

Human Resources

COCOOMOM

CO-CO-PAPA

Profitabilitysegment

Asset WIP RevenueFIFI

Stock

MaterialLabor OH Process

Procure Product Warehouse Sales

ProfitabilityAnalysis

FinancialAccounting

Cost Element Accounting

CO-PCCO-PC

SEAL Implementation methodology

SEAL’S clients-India

VASANTH & CO.

D-Mart