ConsequencesBFSRetailV1.pdf

SAP Trading Industries Solution Management

2010 SAP AG D-69190 Walldorf

Title: Industry Solution SAP Retail Version: 1.0 Date: Jan, 2010

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Version: 1.0

Authors:

Christine Klomfa Annette Kuhn-Lieser Markus Mther

Industry Solution SAP Retail

Consequences of Activating the Business Function Set SAP Retail

History

Version Status Date

1.0 Final Version Jan, 2010

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Table of content:

1 Introduction and Scope ....................................................................... 5

1.1 Intention and Target Groups ........................................................................... 5

1.2 Scope .............................................................................................................. 5

1.3 Out of scope .................................................................................................... 6

1.4 Glossary .......................................................................................................... 8

2 Management Summary ....................................................................... 9

3 Business Requirements .................................................................... 12

3.1 Business Requirements for Retailers ............................................................ 12

3.2 Business Requirements for Wholesale Distributors ....................................... 13

4 Configuration of SAP Retail .............................................................. 15

4.1 Software Architecture .................................................................................... 15

4.2 Configuration of SAP Retail in the Switch Framework ................................... 16

4.2.1 Activation of SAP Retail ............................................................................................... 16

4.2.2 Enterprise Extension Retail .......................................................................................... 17

4.2.3 Retail-related Business Functions in Enhancement Packages ................................... 18

5 SAP Retail .......................................................................................... 19

5.1 Retail Master Data ........................................................................................ 19

5.1.1 Article Master Data ...................................................................................................... 19

5.1.2 Site Master Data .......................................................................................................... 20

5.1.3 Merchandise Category Hierarchy / Article Hierarchy ................................................... 21

5.1.4 Retail Terminology ....................................................................................................... 21

5.2 Retail-Specific Functionality .......................................................................... 21

5.2.1 Assortment Management and Listing .......................................................................... 22

5.2.2 Layout .......................................................................................................................... 22

5.2.3 Replenishment for Sites ............................................................................................... 22

5.2.4 Retail Promotion .......................................................................................................... 23

5.2.5 Allocation ...................................................................................................................... 23

5.2.6 Perishables Procurement: Product Substitution .......................................................... 23

5.2.7 POS Interface (POS Outbound and POS Inbound) ..................................................... 23

5.2.8 In-Store Merchandise Inventory Management (former: SAP Retail Store) ................. 23

5.3 Use of Standard Functions within SAP Retail ................................................ 24

5.3.1 Standard Functions with SAP Retail Master Data ....................................................... 25

5.3.1.1 Batch Management ...................................................................................................... 25

5.3.1.2 Serial Number Management ........................................................................................ 26

5.3.1.3 Materials Management ................................................................................................ 26

5.3.1.4 Sales and Distribution .................................................................................................. 28

5.3.1.5 Production Planning - Production Order Management (PP-SFC) ............................... 29

5.3.1.6 Process Production (PP-PI) ......................................................................................... 30

5.3.1.7 Production Planning Repetitive Manufacturing (PP-REM) .......................................... 31

5.3.1.8 Financial Accounting (FI) and Controlling (CO) ........................................................... 31

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5.3.1.9 Variant Configuration (LO-VC) ..................................................................................... 32

5.3.1.10 Plant Maintenance (PM) .............................................................................................. 33

5.3.1.11 Quality Management (QM) ........................................................................................... 33

5.3.1.12 Project System (PS) ..................................................................................................... 34

5.3.1.13 Recipe Management (SAP PLM) ................................................................................. 34

5.3.1.14 Customer Service (CS) ................................................................................................ 35

5.3.2 SAP ERP Standard Functions not Supported with Articles ......................................... 36

5.3.2.1 Material Ledger (ML) .................................................................................................... 36

5.3.2.2 Material Requirement Planning Area (MRP Area) ....................................................... 37

5.3.2.3 Manufacturing of Co-production................................................................................... 38

5.3.2.4 Foreign Trade............................................................................................................... 38

5.3.2.5 Production Resources/Tools (PRT) ............................................................................. 38

5.3.2.6 Valuation Levels Above the Plant (Company Code) ................................................... 38

5.3.2.7 Plan Article Changes (Change Service) ...................................................................... 38

5.3.2.8 Long-term planning for Articles .................................................................................... 38

5.3.2.9 Revision Level for Articles ............................................................................................ 38

5.3.2.10 Manufacturer Part Number Management .................................................................... 38

5.3.2.11 Proportion Unit, Active Ingredient Unit of Measure...................................................... 39

5.3.2.12 Creation of Articles Using the CAD (Computer Added Design) Interface ................... 39

5.3.2.13 LIFO and FIFO Analysis .............................................................................................. 39

5.3.2.14 Inflation Handling for South America ........................................................................... 39

5.3.2.15 Tax Determination in Purchase Order (Country Brazil Only) ....................................... 39

6 Usage of Retail Functionality in SAP ERP Standard ...................... 40

6.1 Retail Pricing ................................................................................................. 40

6.2 Retail Consignment ....................................................................................... 41

6.3 Listing for Customers .................................................................................... 41

6.4 Collective Purchase Order ............................................................................ 42

6.5 Perishables Procurement .............................................................................. 42

7 Migration SAP ERP to SAP Retail .................................................... 43

8 SAP Retail and other SAP ERP Industry Solutions ........................ 44

8.1 SAP Retail and SAP Oil&Gas ........................................................................ 44

8.2 SAP Retail and SAP Media ........................................................................... 45

9 SAP Retail and other SAP Business Suite Applications ................ 46

9.1 SAP Retail and SAP Customer Relationship Management (SAP CRM) ........ 46

9.2 SAP Retail and SAP Supply Chain Management (SAP SCM) ....................... 46

9.2.1 Global Available-to-Promise (Global ATP) .................................................................. 46

9.2.2 SAP Auto-ID Infrastructure (SAP AII) and Object Event Repository (SAP OER) ........ 47

9.2.3 SAP Event Management (SAP EM) ............................................................................ 48

9.2.4 SAP Extended Warehouse Management (SAP EWM) ............................................... 48

9.2.5 SAP Transportation Management (SAP TM) ............................................................... 49

9.3 SAP Retail and SAP Supplier Relationship Management (SAP SRM) ........... 49

9.4 SAP Retail and SAP Product Lifecycle Management (SAP PLM) .................. 49

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9.5 SAP Retail and SAP BusinessObjects Global Trade Services (former SAP GTS) ............................................................................................................. 49

10 Usage of SAP for Retail Solutions with SAP ERP Standard .......... 50

10.1 SAP Forecasting and Replenishment (SAP F&R) ......................................... 50

10.2 SAP Merchandise and Assortment Planning ................................................. 51

10.3 SAP Price Optimization and SAP Markdown Optimization ............................ 51

10.4 SAP POS Data Management ........................................................................ 51

11 Appendix ............................................................................................ 52

11.1 Further Documentation.................................................................................. 52

11.2 Table of Figures ............................................................................................ 52

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1 Introduction and Scope

1.1 Intention and Target Groups

SAP offers the SAP for Retail solution in order to support retail business processes. SAP Retail, a SAP ERP system with activated retail-specific functionality, is the central part of this solution. Over the last 15 years SAP Retail has become the leading IT solution for the Retail industry. However, a lot of companies for example in wholesale distribution or vertical Retailers, having production and retail processes, are often uncertain whether they should use SAP Retail or a SAP ERP standard system to support their business.

If you want to use SAP Retail you have to activate the retail-specific functionality in the SAP ERP system. Missing knowledge about what really happens when you do the activation very often leads to wrong assumptions and wrong decisions. So for example wholesale distribution customers are uncertain whether they need to activate retail functionality to support their busi-ness processes and whether they can still run their non-retail business processes in parallel. Another example is that customers with production and retail processes want to run both busi-nesses on one system/instance and dont know whether this is feasible or not.

The scope of this document is to summarize the most relevant questions regarding the activa-tion of retail functionality in an SAP ERP system and to document the answers in one central place in order to facilitate the decision for SAP ERP Standard or SAP Retail. The focus of this document is on functionality. For technical details regarding the activation of retail-specific func-tionality please refer to the whitepaper SAP Retail Technology Facts:

https://websmp203.sap-ag.de/retail

Expert Knowledge Corner->Across components->SAP for Retail->SAP Retail Technology Facts

This document should support customers in their decision process whether they should imple-ment SAP ERP with or without activating retail functionality. It also addresses retail customers who want to use SAP Retail together with non-retail functionality of SAP ERP Standard, for example production functionality. It also targets wholesale distributors who have some retail business processes and wonder whether they need to activate retail functionality in SAP ERP or not.

This document is available for customers and implementation partners as well as for SAP em-ployees, especially in sales, pre-sales and consulting.

As a prerequisite the reader should have at least a basic understanding of retail-specific busi-ness processes, SAP ERP and SAP Retail functionality.

1.2 Scope

The document focuses on retail and wholesale distribution business requirements and provides decision support whether to configure the SAP ERP system as SAP ERP Standard or SAP Re-tail.

The document starts with a brief explanation why Retail companies have special requirements and therefore need a retail-specific IT solution to support their business processes.

In addition you will find a high level summary why wholesale distributors also need retail-specific functionality.

To understand why in some cases we are facing some restrictions when using Retail functionali-ty together with the SAP standard functionality you need at least a basic knowledge about what happens technically in an SAP ERP system when the retail-specific functionality is activated.

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Therefore a summary of the technology facts is provided in this document. In case you want a deep dive into the technology facts, please refer to the corresponding whitepaper.

In the chapter SAP Retail we provide a brief overview on the retail-specific functionality. If you need more information about the retail-specific functionality please refer to other documentation, for example the SAP Online Help. However, the focus of this chapter is how a selection of SAP ERP standard functionality can be used together with retail-specific master data. We focused on the standard functionality that to our experience is often requested by customers, so this is not a complete list of standard functionality. If you are missing standard functionality in this context, please use the Business Process expert community (https://www.sdn.sap.com/irj/bpx/retail) to inform us.

In the chapter Usage of Retail Functionality in SAP ERP Standard we describe retail-specific functionality that you can use without configuring your system as SAP Retail. This chapter is especially important for those who do not have extensive retail business like some wholesale distribution customers.

Several customers started first with an SAP ERP Standard system and want to migrate to SAP Retail. Therefore we documented the migration options and a summary about what needs to be considered when migrating to SAP Retail.

Very often companies that are not in retail or wholesale distribution business in the first place nevertheless have retail-specific processes, like gas stations selling grocery and other mer-chandise in their locations. So the combination of SAP Retail with other SAP industry specific solutions is sometimes requested. The chapter SAP Retail and other industry solutions gives a summary about this topic in general and describes details about the combination SAP Retail and SAP Oil & Gas as well as SAP Retail and SAP Media.

This document also contains information about the integration of SAP Retail with other Business Suite applications, like SAP CRM. However, here we only focus on the integration topics not on the functional fit of the Business Suite applications for Retail businesses.

In addition the possible combinations of an SAP ERP Standard system with Retail industry solu-tions that might be interesting for wholesale distribution companies, like SAP Forecasting & Replenishment, are commented.

Note: We assume that customers want to run all ERP related business processes on one sys-tem/one instance. Therefore our analysis is always considering this implementation scenario.

This document refers in general to SAP ERP 6.0, exceptions are explicitly mentioned.

1.3 Out of scope

The content of the document is based on the functionality available with SAP ERP 6.0. It does not describe any new features or specific release content. Please refer to the rollout material on the SAP Service Market Place or the release notes.

This document does not describe any functionality in detail.

When developing retail-specific functionality we introduced new master data, new applications and enhanced some of the standard applications. The latter are available in SAP ERP Standard and can be used with retail or non-retail master data. They are not described in this 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.

This document does not cover Enterprise Service Bundles or the integration of partner solu-tions.

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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 contain any guidelines for implementation. Please refer to the corres-ponding sources like SAP Help Portal or configuration guides.

Note: These are the topics we intentionally did not include in this document. In this first version we needed to focus on the most important questions we received during the last years. Howev-er, we are well aware that there might be additional important issues we did not cover yet. Please use BPX (https://www.sdn.sap.com/irj/bpx/retail) to get in contact with us and help to improve the content of this documentation in the future.

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1.4 Glossary

Term Definition

SAP for Retail All SAP applications that support Retail business processes, for example SAP Retail, SAP Forecasting & Replenishment, or SAP Promotion Management.

SAP Retail SAP ERP system with activated retail-specific functionality. This means that either the Retail Switch (up to release mySAP ERP2004) or the business functions set SAP Retail has been acti-vated (since release SAP ERP 6.0)

SAP ERP stan-dard system

SAP ERP without any industry specific functionality switched on.

SAP standard customer

An SAP customer who uses an SAP R/3 or SAP ERP Standard system.

SAP Retail cus-tomer

An SAP customer who uses an SAP Retail system.

Business Process Expert Platform

The BPX community provides a virtual environment that enables the members to collaborate and co-innovate. It is open to all inter-ested parties. While SDN focuses on SAP NetWeaver topics, the BPX Community centers on business processes and SAP busi-ness applications, such as SAP for Retail. BPX bridges the gap between Business and Information Technology.

http://bpx.sap.com

Software Com-ponent

Describes a set of objects that are always delivered together. A soft-ware component is released in successive versions with new func-tions. You can provide each component separately with Support

Packages. So, software components group development compo-nents to minimize the complexity of dependency, maintenance, and releases.

Objects are assigned to a software component by assigning the pack-ages of the object. This enables objects from one software component to move to another software component when you switch to a new release.

Retail-specific functionality / application

Terms used in this document to denote functionality developed specifically for SAP Retail

Standard functio-nality / applica-tion

Terms used in this document to denote functionality not developed specifically for SAP Retail

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2 Management Summary

SAP Retail

Retail companies have special business processes and thus specific requirements regarding IT solutions. These IT solutions also become relevant for other industries, such as wholesale dis-tribution, when they are using retail processes.

In order to use retail-specific functionality in SAP ERP you have to activate industry solution SAP Retail first. Since release SAP ERP 6.0, SAP Retail is configured by activating the corres-ponding business function set ISR_RETAIL (SAP Retail) in the Switch Framework (see figure 1).

SAP Retail extends the functionality of an SAP ERP Standard system.

Specific master data, such as articles, sites, merchandise categories

Specific applications components/functions, such as Retail Promotion, that require re-tail-specific master data

Enhancements of standard applications, such as the handling of generic articles in the purchase order application

Figure 1: SAP Retail Activation in the Switch Framework and Retail-specific functionality

Note: You may configure SAP ERP as SAP Retail only if you are in possession of a valid li-cense for SAP Retail. Please see SAP Merchandising for Retail on the SAP price list.

SAP Retail specifics

A significant difference between an SAP Retail system and an SAP ERP standard system is the use of specific master data, such as article and site, opposed to material and plant master data.

When you have activated SAP Retail you can use all retail-specific functionality based on article and site master data, such as Retail Promotion or Allocation. For more details please see Retail-Specific Functionality.

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Use of standard functions in SAP Retail

There are many SAP ERP functions, especially for logistics such as Purchase Order or Goods Receipt, which are central for the SAP Retail solution. These standard application components are regarded as part of SAP Retail as well and can be used with retail-specific master data. Also, many of them have been enhanced to fulfill retail-specific requirements. A typical example is the handling of generic articles with the so called generic article matrix for instance in the purchase order application.

On the other hand there are other SAP ERP functions which are usually not considered as part of SAP Retail. However, these functions, such as Production Planning or Product Costing, become relevant also in an SAP Retail system using the retail-specific master data articles and sites when a retail or wholesale distribution company extends its usual business for ex-ample by moving upstream the supply chain. In order to simplify and streamline processes you can use specific, non-retail functionality with article and site master data instead of material and plant master data. For example you want to produce products and sell them as merchandise to end consumers. In some cases you will face restrictions when using SAP ERP application com-ponents with articles and sites. However, most of those restrictions might not prevent you from using these functions nevertheless. For details please refer to the corresponding chapters of the document. Use of Standard Functions within SAP Retail

Important Note: Even if you have activated SAP Retail, you can use all the standard func-tionality with material and plant master data in parallel with only two exceptions: Ma-terial Ledger and Material Requirements Planning Area. For more details please see Materi-al Ledger (ML) and Material Requirement Planning Area (MRP Area). However, experiences from customer projects reveal that these exceptions do not constitute a larger constraint in using SAP ERP standard functionality in SAP Retail.

Usage of Retail-specific functionality in SAP ERP

As a rule, its not possible to use retail-specific functionality in an SAP ERP standard system. There are only few exceptions to this rule such as Retail Pricing or Listing for customers. These functions can be used with material and plant master data as well.

Migration from SAP ERP to SAP Retail

Migration of an SAP ERP Standard system to SAP Retail is possible. SAP offers specific train-ing and consulting services to support migration projects.

https://portal.wdf.sap.corp/irj/go/km/docs/GCP_Content/GCP_Documents/Services/Service_Reposito-ry/Global_Retail%26Wholesale/10_Service_Inventory/10_Onepagers/Onepager_Migration_SAPERP_to_Retail.mht

SAP Retail and other SAP Business Suite components

SAP Business Suite components offer many more solutions to support business processes relevant for retail companies. For example relevant parts of SAP Supply Chain Management are SAP Extended Warehouse Management or SAP Event Management.

On the other hand some functions of the Business Suite components cannot be used in con-junction with SAP Retail or with restrictions only.

Usage of selected SAP for Retail solutions with SAP ERP

In addition, SAP for Retail offers solutions such as SAP Merchandise and Assortment Planning that are designed to extend the functionality of SAP Retail. These solutions are based on the

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retail-specific master data and therefore cannot be used with an SAP ERP standard system or with restrictions only.

Figure 2: SAP for Retail: Innovation Around a Stable Core

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3 Business Requirements

3.1 Business Requirements for Retailers

Why do retailers need a special software solution?

Retailers are purchasing and selling merchandise. At a first glance this does not sound like a very complicated process. However, this process gets complex because of the infinitive options combining the different variables of this process. In the following we want to highlight some of the special business requirements companies which retail business have.

First of all there is a wide array of different products. The different nature of those products re-quire special handling in the processes. For example fresh or frozen food products will be treated totally different within the supply chain than high fashion or electronic products.

There are a lot of different ways of distributing merchandise, so we have to deal with multi channel distribution. This includes various sales channels such as mail order (catalog or internet sales), discounters, department stores, neighborhood stores and alike.

In the stores Point-of-Sales systems are used to sell merchandise to consumers. These sys-tems need to be integrated into the SAP Retail system. Correct, up-to-date master data have to be transferred from the central system to the cash registers. All transactions at the Point-of-Sale have to be uploaded into the merchandise and financial system for further processing.

The distribution of merchandise is usually done from the vendor into a distribution center and from there to the stores or customers. However, also multi-step logistics with different central warehouses and local distribution centers occur as well as direct store delivery in case the ven-dors deliver to the stores

Therefore we have special requirements related to the maintenance of the different master data, especially article and sites, in order to be comprehensive and flexible in supporting all the differ-ent processes.

Another specialty is that retailers do not sell all merchandise in every channel. They even often decide on store group or store level which goods will be sold. They have a very sophisticated assortment management either fulfilling or creating the consumers demand.

Together with pricing, promotion management is the most important marketing instrument for retailers. Planning and executing promotions efficiently is crucial to gain competitive advantage in a hard-fought market.

Last but not least retailers have to handle masses of data. On the one hand a lot of master data need to be entered and updated every day. On the other hand a lot of transactional data are produced daily. Tools for handling those mass data are a must for every software solution for retailers.

Some retailers are growing their private label business and extend their supply chains to sourc-ing and manufacturing. On the other hand traditional manufacturers start to sell their products in own retail outlets. In both cases an integrated software solution, covering production and mer-chandising processes at the same time, is needed.

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3.2 Business Requirements for Wholesale Distributors

Generally, the terms wholesale or wholesale distribution denote the resale - the sale without transformation - of new and used goods to retailers, to industrial, commercial, institutional or professional users in contrast to retail with a sale to consumers (see figure 3 left). Central functional areas for this classical wholesale distribution business are procurement, warehouse and inventory management, demand planning, and order management.

SAP ERP provides a comprehensive solution fit for the classical wholesale distribution business with its logistics, financial, and Human Capital Management modules (see figure 3 on the right). Accordingly, a large number of SAP customers from the wholesale distribution industry use an SAP ERP system for their business. However, many wholesale distributors are interested in SAP Retail or operate SAP Retail because they want to make use of retail-specific functionality that provides value for their classical wholesale distribution business such as assortment-related functions (merchandise category hierarchy, listing) or Retail Promotion to be able to plan and manage promotional list prices for sales orders. In particular, wholesale distributors operating fashion related merchandise are interested in functions around the generic article provided by SAP Retail.

Figure 3: Classical wholesale distribution business

In recent years, new market trends challenge the classical wholesale distribution business mod-el and lead to new requirements for an ERP solution. Wholesale distributors face a cutthroat competition by suppliers who try to bypass the wholesale distribution step in the supply chain with an own logistic offering or in cooperation with specialized LSPs (Logistics Service Provid-ers), by customers who use new sales channels such as the Internet to place their sales orders, and by new competitors like LSPs or retailers who try to get a chunk from the classical whole-sale distribution business by leveraging their logistics capabilities. These trends aiming at the elimination of the classical wholesale distribution from the supply chain are fostered by globali-zation and deregulation.

Wholesale distributors react in different ways to extract themselves from this squeeze of compe-tition. With a so called repositioning wholesale distributors try to extend their own business area into the areas of the new competitors by moving upstream and down stream in the supply chain. The first move means that wholesale distributors take over production steps from suppliers. This can be a simple assembly and kitting or a real manufacturing, sometimes in connection with subcontracting. In some cases wholesale distributors even develop own private labels. On the downstream side, wholesalers open own Retail stores to provide end-consumers with merchan-

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dise. In this context one can also mention wholesale distributors who emerged as purchasing association for independent retailers and who operate own stores as pilots for their business.

SAP ERP provides the necessary IT solutions for an upstream integration with its production related applications. For the downstream integration, that means the operation of stores, the SAP Retail provides the right solution fit. New requirements come up when the repositioning goes in both directions. In such a case the need arises to operate integrated upstream processes such production including subcontracting with retail-specific master data (articles and sites). In addition, many processes related to production such as Quality Management, Recipe Management, or Product Costing have to be supported.

In general, one can say that new market trends in the wholesale distribution industry require the use of SAP ERP functions with retail-specific master data.

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4 Configuration of SAP Retail

4.1 Software Architecture

SAP Retail is an industry solution that differs from other SAP ERP industry solutions from an architectural point of view. The fact that the development takes place in the standard gives SAP Retail an exceptional position among the SAP ERP industry solutions and leads to some specifics in the configuration. A detailed description of these specifics in the context of the SAP ERP architecture evolution you can find in a special document for the SAP Retail Technology Facts.

https://websmp203.sap-ag.de/retail

Expert Knowledge Corner->Across components->SAP for Retail

Software Architecture for SAP ERP industry solutions

Typically, the development for an SAP ERP industry solution takes place in a separate industry-specific software component in connection with industry-specific enhancements of standard applications. In releases up to mySAP ERP2004 industry-specific enhancements were made as modifications of the standard applications; since release SAP ERP 6.0 industry-specific en-hancements can be implemented modification free using special enhancement techniques. The industry-specific software components of the different SAP ERP industry solutions constitute a separate software layer that lays above the software layer for applications in an SAP R/3 or SAP ERP Standard system, see figure 4. Note that with release SAP R/3 Enterprise 4.70 the former Application software layer has been split up into a Core layer and an Enterprise Exten-sion layer; since mySAP ERP2004 these two layers are called SAP Enterprise Core Compo-nents (SAP ECC).

Software Architecture for SAP Retail

However, SAP Retail does not follow this software architectural approach. When the retail in-dustry solution was initiated in the 1990s it was decided to develop the SAP Retail solution to-gether with the SAP R/3 standard solution meaning not in a separate software component but in the same software components that are used for the standard applications. The reason for this architectural decision was that the retail solution is closer to SAP R/3 than other industry solutions in the sense that the need to adapt or enhance the standard applications is less. In addition, many intended retail application components such as Retail Pricing do not interfere with standard applications. Thus, in releases up to SAP R/3 4.6c development for SAP Retail took place in software component SAP_APPL (Logistics and Accounting) as part of the Applica-tion layer, since release SAP R/3 Enterprise 4.70 both in SAP_APPL and in the enterprise ex-tension EA-RET (Retail) created for SAP Retail (see chapter 4.2.2). Necessary enhancements of standard functionality such as purchase order processing or sales order processing were developed as normal enhancements and not as modifications. In sum, from a software archi-tectural point of view SAP Retail is standard functionality.

Retail Switch

In conjunction with this software architectural decision it was also decided that retail-specific functionality shall be hidden for SAP standard customers meaning that SAP Retail shall not be available as of standard. Before you can make use of retail-specific functionality you have to activate it. Beside license reasons this decision was made to avoid that SAP standard custom-ers are negatively impacted for example by additional retail-specific screen elements in stan-dard transactions. Thus, the Retail Switch concept was introduced to turn on SAP Retail.

Up to release mySAP ERP2004 the Retail Switch concept was very simple from a technical point of view. SAP Retail was turned on by processing a special report SETRETAILSYSTEM (Flag System Online as SAP Retail System) which created an entry in database (DB) table

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TSYSDEF (Information on Industry Switch). This DB table entry caused that the SAP R/3 or SAP ERP system became an SAP Retail system in the following sense: Retail-specific functio-nality or standard functionality with retail-specific enhancements can check the DB table entry and control the program flow accordingly. The most prominent example is Article Maintenance which is terminated when the check reveals that the system is not configured as SAP Retail.

Release SAP ERP 6.0 involved a major change in terms of how SAP Retail is configured. This new configuration concept which is valid today is described in the following chapter.

Figure 4: Evolution of SAP R/3 and SAP ERP Architecture

4.2 Configuration of SAP Retail in the Switch Framework

4.2.1 Activation of SAP Retail

With the introduction of the Switch Framework in SAP ERP 6.0 to activate industry solutions, it has been decided to use the same technology for the configuration of SAP Retail. This decision has been made to be consistent with other industry solutions and to avoid that the configuration of SAP Retail with the old Retail Switch becomes an exception to the rule.

SAP Retail, now called an Industry Extension, is configured by activating the corresponding business function set ISR_RETAIL (SAP Retail) in the Switch Framework, see figure 5. The Switch Framework can be called with the first activity in the SAP Customizing Implementation Guide or directly with transaction SFW5 (Switch Framework Customizing).

Technically, the activation is implemented as follows: business function set SAP Retail contains only one industry business function ISR_RETAILSYSTEM (Retail Enhancements) which is activated automatically when a new SAP customer activates the business function set SAP Retail manually in the Switch Framework or when the BFS SAP Retail is activated automatical-ly during a system upgrade. Business function Retail Enhancements is related to only one

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switch ISR_RETAILSWITCH (Retail Switch) which controls a BAdI implementation that de-livers the information of whether SAP retail is active or not.

Note, that the change in the SAP Retail configuration does not involve a change in the software architecture. The main purpose of business function set SAP Retail is to activate retail-specific functionality that resides in the SAP ERP Core Components. In particular, this means that busi-ness function Retail Enhancements does not contain any functionality on its own in contrast to the industry business functions of other industry solutions. Software development for SAP Retail still takes place in the standard and not in a separate industry-specific software component.

Figure 5: Switch Framework in the SAP Customizing Implementation Guide

4.2.2 Enterprise Extension Retail

As mentioned, release SAP R/3 Enterprise 4.70 involved a change in the R/3 software architec-ture. The former Application layer of release SAP R/3 4.6c has been split up in the SAP R/3 Enterprise Core and a layer for SAP R/3 enterprise extensions which represent separate en-capsulated development areas. The objective of this new development pattern was to stabilize and optimize mature core processes and to allow the optional and flexible deployment of new functionality. The second objective means that you have to activate an enterprise extension in the SAP Customizing Implementation Guide before you can make use of the new functionality. Following the paradigm that retail-specific functionality shall be hidden for SAP standard cus-tomers a specific Enterprise Extension - EA-RET (Retail) for SAP Retail has been created to encapsulate new retail-related developments.

Please refer to the SAP Help Portal for further details about the enterprise extension content for SAP Retail.

http://help.sap.com/

SAP ERP->SAP ERP Central Component->Business Functions (ERP 6.0)->Enterprise Exten-sions: Business Functions->Retail

The activation of the enterprise extension Retail and the old Retail Switch were technically inde-pendent. That meant in particular, that the Retail enterprise extension was not activated auto-matically when an SAP customer turned on the Retail Switch.

This independent activation of SAP Retail and enterprise extension Retail has not changed with the new configuration of SAP Retail in release SAP ERP 6.0. Only the activation of enterprise

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extensions has been integrated into the Switch Framework. In figure 5 you can see the enter-prise extension Retail below the Enterprise Extension node in the Switch Framework.

Note that the independent activation of enterprise extension also means that an SAP ERP Standard customer can activate enterprise extension Retail to make use of enhancements for retail functionality that can be used with material and plants. One example is the use of the Family Pricing feature - developed in enterprise extension Retail - within the Retail Pricing appli-cation component.

4.2.3 Retail-related Business Functions in Enhancement Packages

SAP Enhancement Packages represent a new paradigm for delivering continuous software innovation around a stable core in an improved software lifecycle; they are shipped as a delta shipment to SAP ERP 6.0.

SAP Enhancement Packages include functional enhancements for standard and industry-specific business processes, UI simplifications, and Enterprise Service Bundles. Enhancement packages are subdivided into enterprise business functions for enhancements of the SAP En-terprise Core Components (SAP ECC) and industry business functions for the enhancement of the industry solutions. You can activate each business function separately in the Switch Frame-work (see figure 6).

Because of the exceptional software architecture of SAP Retail with a development in SAP ECC, innovations for SAP Retail are shipped with enterprise business functions in contrast to other industry solutions which develop and ship new functionality using industry business func-tions. There are 44 retail-related enterprise business functions up to enhancement package 5. Retail-related business functions have prefix ISR (see figure 6).

Note: As retail-related enterprise business functions are associated with SAP ECC software components only and not with an industry-specific software component it is possible to acti-vate these business functions in an SAP ERP Standard system. This allows SAP standard cus-tomers to use cross-industry or standard functionality that has been developed in these retail enterprise business functions. One example is the new Perishables Procurement application component developed in enterprise business function ISR_RET_PERISH_PROCUREMENT (Retail, Perishables Procurement).

Figure 6: Development in Enterprise Business Functions for SAP Retail

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5 SAP Retail

As already mentioned retail companies place special requirements on software solutions that are different from the requirements of industrial companies with their production-oriented objec-tives. For this reason, SAP developed a special retail solution. This specific development com-prises:

Retail-specific master data such as articles, sites, merchandise categories

Retail-specific application components/functions, like Retail Promotion, that require re-tail-specific master data

enhancements of standard functionality, like the handling of generic articles in the pur-chase order processing

After you have configured the SAP ERP Standard system as SAP Retail you can make use of all retail-specific master data and functions.

This chapter contains information about the retail-specific functionality. You will also see which standard functions that are most relevant for retailers can be used with article and site master data and where the restrictions are.

Some of the functionality provided by the SAP ERP Standard system works with articles and sites as well. Those will be described in this chapter.

Note: We will not describe the enhancements of standard functionality in this document.

Note: For some exceptions its also possible using materials and plants in retail-specific functio-nality in an SAP ERP Standard system. These functions will be explained in chapter 6.

5.1 Retail Master Data

The major difference between an SAP ERP Standard system and an SAP Retail system is the use of the article master as opposed to the material master. An article comprises additional attributes to control retail-specific processes, therefore a special transaction for article master data maintenance is provided. This transaction also fulfills requirements for mass data handling. It also supports the maintenance of the different article categories in SAP Retail, like generic articles with variants or structured articles.

Sites (distribution centers and stores) and merchandise categories are further retail-specific master data. Merchandise categories and the site related attributes are used to control many retail-specific processes.

Please also refer to the SAP Help Portal for further details about the retail-specific master data.


SAP for Industries ->SAP for Retail ->SAP Retail ->SAP ERP Central Component->Master Data

5.1.1 Article Master Data

The article master record is the data record in your system that contains all the required basic data for an article, structured according to different criteria. An article master record contains:

Descriptive data, such as size and weight

Data with a control function, such as the article type

Data that is automatically updated by the system (for example: warehouse stock)

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In SAP Retail you can create articles of different article categories. The counterpart of a material is a single article. In addition you can maintain generic articles and corresponding variants and so called structured articles (sets, displays and prepacks), which are made up of components (i.e. single articles). A series of enhancements of standard logistics functionality have been made to handle articles with these article categories in logistical processes.

A further feature of the article maintenance is the handling of specific reference data. Due to the large amount of data in article maintenance, the user is offered default data when creating or extending an article master record. This keeps the time required to enter data to a minimum and makes it possible to copy changes from the reference data to dependent data records. The default data can come from different references. Some references are similar to the handling in the material master as for example the adoption of data from the vendor master or from custo-mizing. A specific feature of the article master is the maintenance for reference sites (a refer-ence store and a reference distribution center). Background is the usual large number of stores in a retail chain. Site data of articles maintained for the reference site are copied to other sites according to specific rules.

The copying of data from reference sites has to be taken into account when you want to extend the maintenance views for articles. The customizing for configuring the article master allows including fields in the maintenance views that are typical for materials, for example fields in the context of production and that are not considered in the maintenance views delivered in the standard. However, these fields are usually not considered in the copying feature for reference sites. This means that you have to enter these fields for each sites manually.

Note: For more details about the technical implementation of articles compared to material mas-ter data please refer to the document SAP Retail Technology Facts.

5.1.2 Site Master Data

Another important difference between an SAP Retail system and an SAP ERP Standard system is the use of sites as opposed to plants. Again, the majority of specific functionality within SAP Retail can only be used with sites and not with plants.

There are two categories of sites in SAP Retail: Stores in which goods are put on sale for the consumer and distribution centers that are designed to supply the stores.

A site is an organizational unit that is used to map merchandise stored in distribution centers or stores (also department stores and shops) for inventory management and to map the related business processes, such as goods receipt, physical inventory, and goods issue.

A site extends the organizational unit plant maintained in customizing of an SAP ERP Standard system to become a master data record site in SAP Retail. The site master data maintenance transaction resides in the SAP menu and not in customizing as the plant maintenance. There are two main, interdependent reasons for this enhancement. First, additional attributes on site level are required to control the retail-specific business processes as for example the automatic listing of new articles based on merchandise categories assigned to a site. In addition, the large number of stores in a retail company required quick and flexible maintenance which could not be achieved with customizing. Accordingly, a specific site master data maintenance has been developed that in addition allows the integrated maintenance of the associated customer and vendor.

The site in SAP Retail always corresponds a valuation area. Its not possible to define the valua-tion area on company code level. Please also see Valuation levels above the plant (company code)

Note: For more details about the technical implementation of sites compared to plant master data please refer to the document SAP Retail Technology Facts.

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5.1.3 Merchandise Category Hierarchy / Article Hierarchy

Merchandise Category Hierarchy: Each article in the company is assigned to one merchandise category. Merchandise categories can be grouped on merchandise category hierarchy levels. These, in turn, can be assigned to higher hierarchy levels. These assignments create a mer-chandise category hierarchy. This grouping simplifies monitoring and control within the compa-ny, as well as data maintenance (for example, conditions). The merchandise category hierarchy is also used to pass on descriptive and variant-creating characteristics (such as color, size) from higher to lower levels.

Article Hierarchy: You can use an article hierarchy to group your articles in a consumer-oriented structure. This allows you to map any hierarchical grouping of articles (for example, according to sales considerations). You can define one central article hierarchy for the whole client or an article hierarchy for each distribution chain. This allows you to assign an article to several hie-rarchies. You can also define time-dependent hierarchies. An article hierarchy is optional and can be used e.g. for planning purposes in SAP Merchandise and Assortment Planning.

Note:

A (standard) material group is a one-dimensional field and maintained in customizing of an SAP ERP Standard system. The merchandise category in SAP Retail extends the material group by enhancing it as a class in the classification system (class type 026) with the advantage that you have all the standard features of the classification system at your disposal (hierarchical struc-ture, characteristics, catchwords etc.).

5.1.4 Retail Terminology

In the retail industry some business objects are named differently than the terms defined for a standard SAP ERP system. The most prominent example is that in retail you use the term ar-ticle instead of material. To improve the usability of the system, SAP therefore offers a tool for converting the standard terms on the user interfaces of the entire standard system to the terms specific to the retail industry. This technique is known as the Short Text Replacement. This is independent from the activation of SAP Retail. This means that you have to perform this in addi-tion to the activation. On the other hand its also possible to active this short text replacement also in an SAP ERP Standard system. This might be useful to wholesale distribution companies who do not want to use the retail-specific functionality but want to use the terms article and sites nevertheless.

For more information please see http://help.sap.com/

SAP for Industries ->SAP for Retail ->SAP Retail ->SAP ERP Central Component ->Retail Ter-minology.

Please also see SAP note 897714.

5.2 Retail-Specific Functionality

Activating the business function set SAP Retail enables you to use functions developed specifi-cally for the retail industry.

The following functions are retail-specific solutions and cannot be used in an SAP ERP standard system.

We summarized the major features of the retail-specific functionality. For more information, please refer to the SAP Help Portal.


SAP for Industries ->SAP for Retail ->SAP Retail ->SAP ERP Central Component -> SAP Retail

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5.2.1 Assortment Management and Listing

Retailers use merchandise assortments and assortment modules to control which articles a store can purchase and sell. Articles can be assigned automatically to assortments as a result of checking rules. Assignments can also be done manually. In both cases the system automati-cally generates listing conditions for each valid combination of article and assortment. The process of assigning articles to assortments is called listing.

Assortment management and listing is exclusively available in SAP Retail.

However, assortments can also be created for customers. Please see also Listing for Custom-ers.

5.2.2 Layout

The layout concept allows you to optimally structure the sales area of your stores in connection with your assortment. At the same time, it forms the basis for using external space management systems. A store can contain one local and several general assortments. An assortment is an SAP Retail object to which articles are assigned, or listed, for a particular validity period. The articles are only available to the relevant user for use in the different functions when they have been assigned to an assortment user (retail sites, such as stores, distribution centers, and cus-tomers). This availability for use is determined by the type of assortment user (local assignment = type A or B, general assortment = type C). You can now assign layouts to the assortments for a store. Every layout consists of layout modules that represent a fixed area in a store, for exam-ple a shelf. You use layout areas to map the spatial assignment of the layout modules in the layout.

For a general assortment, the system creates a layout module in SAP Retail, and layout module versions are created for each assortment version. In a layout module, the validity periods for individual versions are unique and cannot overlap. Due to this time-based scheduling, you can, for example map seasonal changes in a shelf.

The layout workbench is the central access to all the functions for space management and layout. You can use it to display the result of strategic assortment planning from SAP Merchan-dise and Assortment Planning (SAP MAP). The layout and the assigned layout modules and their versions are displayed as a hierarchy for a store and all the articles in a module are dis-played directly by selecting the module in question. The articles assigned are displayed both for the layout module version and for the layout module version variant (local deviations in a layout version).

You can also access an external space management program from the layout workbench. You can also use the layout workbench for planning purposes without a space management inter-face.

5.2.3 Replenishment for Sites

Replenishment planning is a procedure for the demand-oriented merchandise supply of reci-pients (sites or external customers).

When executing replenishment for sites (e.g. for a store) the replenishment is technically ex-ecuted for the customer assigned to the site master record.

Replenishment calculates required quantities using previous goods movements and paying particular attention to sales entered at point of sales (POS) in store and POS inbound processing that have been posted as goods issues. This functionality is only available for ar-ticles and sites.

Note: Customer replenishment (Vendor Managed Inventory) belongs to SAP ERP Standard. It is part of the sales and distribution functionality and can be used with material and plants as well as with retail master data.

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5.2.4 Retail Promotion

The retail promotion process is an end-to-end business which begins with promotion planning and subsequent processing like price activation, announcement of the promotion, download of promotion information to POS systems as well as the procurement of the promotional merchan-dise.

The central functionality of the Retail Promotion application component is to create article spe-cific promotional retail prices. This cannot be used in an SAP ERP Standard system. It is only possible to create promotions for rebates on level of merchandise categories for use in sales orders. However, this can also be done with a condition record for a rebate condition type main-tained in the corresponding SAP ERP Standard transaction.

5.2.5 Allocation

An allocation table (requirements planning & stock allocation) is used to distribute planned mer-chandise quantities among several stores according to certain rules (e.g. historical data) and to generate the necessary documents to trigger the goods movements. The communication be-tween headquarters and recipients is coordinated by notifications.

Allocation functionality cannot be used with material and plant master data.

5.2.6 Perishables Procurement: Product Substitution

Perishables procurement is a retail-specific application component designed to streamline the procurement process of perishable products. Central element is the buyers workplace to effi-ciently support the role of a perishables buyer in the distribution center or headquarters with tools and consolidated information that is required to manage purchasing decisions for produce across the company.

This application component can also be used in an SAP ERP Standard system with materials and plants. However, product substitution within perishables procurement only works with article master data. For details please see Perishables Procurement.

5.2.7 POS Interface (POS Outbound and POS Inbound)

POS outbound: POS outbound processing prepares the data required for each store at regular intervals and sends it to the POS server. Data currently valid can be sent to the POS server, as well as prices that will be valid in the future, new articles, and so on. You can specify the period for transferring changes and the future period for data to be valid in the future in the SAP Retail settings.

POS Inbound: POS data can be transferred from the POS server to SAP Retail. Sales entered at the POS in the store are transferred from the POS server to the POS interface of the central SAP Retail application using a converter or SAP PI. POS inbound processing takes place in SAP Retail.

The POS Interface cannot be used with materials and plants.

5.2.8 In-Store Merchandise Inventory Management (former: SAP Retail Store)

In-Store Merchandise Inventory Management (In-Store MIM) is SAPs back-office solution for store merchandise management. It provides the store associates in operations, sales, and ser-vice areas with a set of functions to save time, achieve customer and employee satisfaction, and prevent lost sales.

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Most of the related functions of the In-Store MIM do not work with material and plant master data.

5.3 Use of Standard Functions within SAP Retail

Looking at the use of standard functionality you must make a differentiation in the following sense. There are many standard application components, especially for logistics such as Pur-chase Order or Goods Receipt, which are central for the SAP Retail solution. These standard application components are regarded as part of SAP Retail as well. Also, many of them have been enhanced to fulfill retail-specific requirements. A typical example is the handling of generic articles with the so called generic article matrix for instance in the purchase order processing.

On the other hand there are other standard application components which usually are not con-sidered to be part of SAP Retail. However, these application components, such as Production Planning or Product Costing, become relevant also in an SAP Retail system using the retail-specific master data articles and sites when a retail or wholesale distribution company extends its usual business for example by moving upstream the supply chain.

Based on customer and consulting requests we defined test scenarios for selected standard application components in combination with SAP Retail master data. This chapter summarizes the findings of these tests. In particular, it also points out the restrictions that have been de-tected. The restrictions often result from the fact that typical retail-specific enhancements like the usage of the generic article matrix have not been implemented in functionality that is not in the focus of SAP Retail.

Please note, that this list of non SAP Retail standard application components is not complete. Rather, the main focus was on those application components for which previous customer feed-back indicated that they are relevant to use within SAP Retail.

Note in addition that in SAP Retail you can still use all standard functionality with materials and plants. There are only two exceptions Material Ledger and Material Requirements Planning area. The fact that you can still use materials and plants in SAP Retail offers you the option of a parallel operation of standard processes with materials and plants and retail processes with articles and sites in one system. An example is the combined operation of SAP Retail and SAP Oil&Gas (see SAP Retail and SAP Oil&Gas) in which fuels are created as materials to use the corresponding SAP Oil&Gas functionality and merchandise products of the convenience store are created as articles to operate the usual retail processes.

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5.3.1 Standard Functions with SAP Retail Master Data

5.3.1.1 Batch Management

Business Requirement

Batch management is not a core retail process. Nevertheless sometimes retailers want to use batch management. Possible reasons for the use of batches in a retail environment are:

Various sources for an identical article (e.g. vegetable producers, furniture manufactur-ers, T-Shirt manufacturers)

Separate countries of origin for an identical article (e.g. T-Shirts)

Meat and poultry (proof of origin)

Perishables (expiration dates)

Catch weight articles (batch-specific units of measure such as weight per piece)

Wine (vintages)

Pharmaceuticals (production lot e.g. for vaccines and blood products)

Cigarettes and alcohol (for the transition phase after a tax raise)

Jewelry (age analysis and valuation)

Result

In general batch management can be used in SAP Retail with article master data.

We assume that in most cases retailers will use batch management only for distribution centers and dont need batch information in the stores. Nevertheless SAP recommends to activate batch management always on article or client level (see SAP Note 41715 Reset batch level from material to plant level). To follow this recommendation it is recommended to use dummy batches in the stores where batch management is not desired.

However, for some retail-specific functions there are still some restrictions.

Restrictions

Article Master Data

o Each new article needs to be classified using transaction CL24N Assign Ob-

jects/Classes to Class instead of using integrated article master maintenance as batch

classification is not integrated within article master maintenance like in material master.

o Store specific batch activation in article master maintenance:

If you have good reasons not to follow SAP recommendation to activate batches on ar-

ticle or client level but on store level, the field for store-specific activation (controlling

flag MARC-XCHPF) has to be added to the Logistics:Store view in the article master

maintenance. In Logistics:DC (distribution center) view the controlling flag is already

available.

Allocation Tables

o Batch management information is not considered in the allocation functionality. You

cannot select batch specific information in the allocation table.

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Perishables Procurement

o Handling of batch information is not integrated within perishable procurement func-

tionality

POS Interface, Store Orders

o All POS communication is not laid out to transmit batch data.

5.3.1.2 Serial Number Management

Business Requirement

Serial numbers as identifiers for individual products are an important element in the area of trading goods and consumer products. The registration and management of serial numbers can be an essential task in various business processes such as commissioning, fraud management, inventory management and delivery tracking.

Result

Serial number management can be used with single articles in an SAP Retail system.

However, there are some restrictions.

Restrictions

Article Master Data

o Generic articles and variants: In general serial number management is not supported

for variants of generic articles. However, SAP Note 179851 Problems w. Retail article

variants and serial no. describes a modification to avoid problems with variants during

goods movement and processing of sales and distribution documents, such as sales

order.

o Serial number management for structured articles such as displays, sets and pre-packs

is not supported. Serial number management leads to an error at goods receipt in case

the structured article is split into its components.

Reason: movement type 319 (split structured material) does not support serial numbers.

Allocation Tables

o Allocation tables do not support the maintenance of serial numbers.

POS Interface (In- and Outbound)

o All POS communication is not laid out to transmit serial numbers.

5.3.1.3 Materials Management

All major functions are available together with retail-specific master data, for example purchas-ing, logistics invoice verification, inventory management. However, there are only some restric-tions for subcontracting as described in the next chapter. In addition there are some differences concerning the stock overview.

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5.3.1.3.1 Subcontracting

Business Requirements

In the retail industry placing third-party orders for subcontracting processes have been increas-ing and have become more and more important. Examples are manufacturing of additionals for fashion articles, packaging processes etc.

Results

You can use subcontracting for retail processes with single articles.

However, there are some restrictions when using structured articles.

Restrictions

Generic articles

o For subcontracting orders that were created with matrix for generic articles the

goods receipt is not supported. Nevertheless variants (used like single articles) are

fully supported in subcontracting.

Sales Sets

o When you create the subcontracting purchase order for a sales set, you have to en-

ter the components of the sales set manually as they are not copied from the sales

set bill of material.

Empties

o When you create the subcontracting purchase order for empties, you have to enter

the components of the full product manually as they are not copied from the emp-

ties bill of material.

5.3.1.3.2 Stock Overview

In SAP Retail there are two stock overview options available for articles.

Standard stock overview (transaction MMBE) This option allows for additional batch selection .

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Figure 7: Standard Stock Overview (Transaction MMBE)

Retail stock overview (transaction RWBE) It is also possible to select via additional retail-specific fields such as merchandise cate-gories or filter via vendor, vendor-subrange etc.,to view article stock on different levels.

Figure 8: Retail Stock Overview (Transaction RWBE)

5.3.1.4 Sales and Distribution

All functions are available, for example sales order processing with delivery and billing process. Also matrixes for variants of generic articles and structured articles are integrated within SD functionality without any restrictions.

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However, there is one restriction regarding the Configurable User Interface for Sales. You can tailor the user interface for the Web Dynpro application for order processing to suit your company-specific processes. A customized user interface helps your sales representatives car-ry out their specific sales tasks quickly and effectively. The configurable user interface for sales is available in the standard system as a Web Dynpro application Configurable Order Processing for Sales (LO_OIF_MAIN_APP). It is integrated into the Business Package for Internal Sales Representative 1.4 as a Web user interface. Structured articles like sales sets and generic ar-ticles with variant matrix are not supported in this application.

5.3.1.5 Production Planning - Production Order Management (PP-SFC)


Some retailers require using production order management within SAP Retail to integrate in-store production processes within their retail business.

Examples are bread- or sausage production, production of meals and sandwiches or additional production steps for trading goods like packaging, mixing, labelling etc.

Production Order Management in a Retailers business usually includes the following steps:

Usage of integrated article maintenance for finished products, semi-finished products and raw materials

Site-specific production planning bills of material for finished products (also multi-level possible) and semi-finished products to handle recipe management

Work centers and routings (optional)

Product Costing (CO-PC) for finished products and semi-finished products (details see also Product Costing (CO-PC)

Long-term and short-term planning for production quantities

Conversion of planned order to production order

Confirmation and goods movements after production

Production order controlling

Results

PP and Retail processes can be integrated using retail master data without any process restric-tions.

You can assign the following article categories within a PP bill of material:

Single articles of any article type

Variants of generic articles

Component mix of articles with materials, for example to integrate resources within a bill of material (resources can only be handled as materials).

However, there are some restrictions for master data maintenance and POS inbound.

Restrictions

Article master data has to be enriched with additional costing fields and works schedul-ing fields. In Logistics:DC (distribution center) view in the article master maintenance

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the fields are already available. The Logistics:Store view has to be enhances via cus-tomizing using transaction OMT3 Change view screen sequences: overview.

Generic articles functionality including matrix handling is not available for Production Planning transactions.

Articles with PP BOMs (e.g. bakery products with ingredients linked as BOM compo-nents) cant be exploded at POS inbound to automatically reduce stock on components level. This functionality is only available for Retail BOMs such as sales sets and dis-plays.

5.3.1.6 Process Production (PP-PI)


Some retailers require using process production functionality within SAP Retail to integrate complex production processes like meat segmentation or other detailed production require-ments for food industry etc.

Process production in a Retail business usually includes the following steps:

PP-PI master data like master recipes and resources based on retail master data (ar-ticles, sites)

Product Costing (CO-PC) (details see also Product Costing (CO-PC)

Long term and short term planning

Production execution via process order management

Production confirmation and order controlling/settlement

Results

PP-PI functionality also in combination with QM (see also Quality Management (QM) and Batch Management (see also Batch Management) can be integrated using retail master data without any process restrictions.

However, there are some restrictions regarding master data maintenance.

Restrictions

Additional fields for co-production (apportionment structure) have to be enhanced in ar-ticle master, view Logistics:DC or Logistics:Store via customer enhancement (see also Manufacturing of co-production).

Sub-view proportion/product-units has to be enhanced to basic view of article master e.g. for use of additional batch-specific units of measure (see also Proportion unit, ac-tive ingredient unit of measure).

Production versions are not integrated within article 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-PI processes.

Articles with PP-PI Master recipes (e.g. bakery products with ingredients linked as BOM components) cant be exploded at POS inbound to automatically reduce stock on com-ponents level. This functionality is only available for Retail BOMs such as sales sets and displays.

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5.3.1.7 Production Planning Repetitive Manufacturing (PP-REM)


Some retailers require using repetitive manufacturing functionality within SAP Retail to integrate standardized production processes via repetitive manufacturing planning table. A typical exam-ple 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 (transac-tion 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.

5.3.1.8 Financial Accounting (FI) and Controlling (CO)

SAP Retail uses standard integration for any retail interfacing FI/CO functionality. In general you can use all FI/CO functions within SAP Retail. There are only 2 exceptions:

1. Material Ledger (CO-PC-ACT) can only be used with materials (see Material Ledger (ML)

2. Product Costing (CO-PC) cant be used out-of-the-box on store level (details see below)

5.3.1.8.1 Product Costing (CO-PC)


In case an article is not externally procured but supplied through in-house production a cost price (instead of a purchase price) has to be maintained or calculated for the manufactured article. The cost price can be calculated based on the purchasing prices (MAP moving aver-

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age price) of its components and - if required - also including labor costs for each production step or additional overhead cost percentages. This functionality can be provided using retail master data with PP bills of material for material costs and (optional) work center/routing data for potential labor costs.

For usage within business scenarios see Production Planning - Production Order Management

(PP-SFC), Process Production (PP-PI) and Production Planning Repetitive Manufacturing (PP-

REM)

Result

CO-PC is fully integrated with retail functionality.

The cost price for finished and semi-finished articles can be automatically calculated via CO-PC functionality and stored as standard price in the article master. In addition the cost price (instead of purchase price) can be integrated within Retail Pricing (sales price calculation) using a stan-dard-delivered user-exit (function module WV_EXAMPLE_02 within Purchase Price Determina-tion).

Prerequisite: Article master data has to be enriched with costing fields. In Logistics:DC (distribution center) view in the article master maintenance the fields are already available. The Logistics:Store view has to be enhanced via customizing transaction OMT3 Change view screen sequences: over-view .

5.3.1.9 Variant Configuration (LO-VC)


Some retailers require Variant Configuration within SAP Retail to use the advantages of configu-ration also for retail articles within SD and PP.

Process Description

This process includes the following steps:

Integrated article maintenance for variant article (finished product), semi-finished prod-ucts and raw materials

Site-specific PP bills of material for variant article with various class positions

Production facilities using distribution centers

Creation of sales orders within the stores (delivery plant is distribution center)

Production components can be provided either from the customer stock in the distribu-tion center or can be taken from anonymous stock (configured with use of class posi-tions).

With confirmation of the production order the finished product is posted to customer stock and can be delivered to store or customer.

At this point a billing document is created; any surcharges for specific characteristic val-ues (e.g. special coating) are taken into account.

Result and Restrictions

Retail articles can only be used with variant configuration restricted to make-to order production.

Variant configuration with production of stock-keeping variants is not possible with articles.

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Also generic articles including matrix handling the variant maintenance functionality for retail-ers - cannot be integrated within standard variant configuration.

5.3.1.10 Plant Maintenance (PM)


Some retailers require using plant maintenance within SAP Retail e.g. for inspection, preventive maintenance or repair of equipment within their own distribution centers, stores or production plants like bakeries, bottling plants or services stations.

A typical scenario covers the following steps:

Integrated article maintenance for articles, semi-finished products and raw materials

Production resources and tools using material master maintenance

Site-specific PP bills of material

Production facilities using distribution centers

Maintenance order management (including confirmation and controlling)

Result and Restriction

Plant Maintenance functionality is fully integrated within SAP Retail, using retail master data, without any process restrictions.

However, not all site-specific customizing tables will be populated automatically during the site creation process, e.g. table TCORU, parameters for order confirmation. These table entries have to be maintained manually in PM customizing.

5.3.1.11 Quality Management (QM)


Some retailers require using quality management within SAP Retail to integrate quality planning, inspection and control within their retail processes.


Integrated article maintenance for articles, semi-finished products and raw materials

Maintenance of QM inspection data for QM-relevant articles

Creation of inspection lots, posting to quality stock

Stock evaluation according to quality features and creation of usage decisions; automat-ically posting to free available stock.

Result

Quality planning and inspection are fully integrated also for retail articles with only one master

data maintenance restriction.

Restriction

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QM inspection data are not integrated within article maintenance. They but have to be added

using external mass maintenance transaction QA08 Mass Change of QM Inspection Setup Data

in Articles.

5.3.1.12 Project System (PS)


Some retailers require using Project System within SAP Retail to manage internal projects in SAP Retail, using retail master data.


Integrated article maintenance, site master maintenance

Project creation including work bench system elements, network and activity as sub-steps, project assigned to retail site

Article components assigned to project activity

Release of project with automatic creation of purchase requisition or order reservation

In case of purchase requisition: Procurement of articles for the project, goods receipt and delivery from project

In case of order reservation : Consumption of article for project

Result

Project system can be integrated with retail master data (articles, sites) in SAP Retail without

any process restriction. There is only one restriction regarding article master usage.

Restrictions

Generic articles cannot be assigned to projects. However, assigning variants of a generic