ecr compliant procurement processes

ECR Compliant Procurement Processes

SAP Best Practices for Retail

© 2011 SAP AG. All rights reserved. 2

Purpose, Benefits, and Key Process StepsVersion 1 - Buyer-Managed Inventory

Purpose The scenarios presented in SAP Best Practices for Retail deal with the retailer`s procurement

processes, which include buyer-managed inventory and vendor-managed inventory.

Benefits efficient merchandise control which fulfills the requirements of ECR-compliant procurement

processes more efficient communication between retailer and manufacturer/vendor

Key Process Steps Process purchase order in the retailer system Process sales order in the vendor system Check purchase order confirmation in the retailer system Process delivery in the vendor system Perform goods receipt with reference to shipping notice in the retailer system Create billing document in the vendor system Carry out invoice verification in the retailer system


Purpose, Benefits, and Key Process StepsVersion 2 - Vendor-Managed Inventory

Purpose The scenarios presented in SAP Best Practices for Retail deal with the retailer`s

procurement processes, which include buyer-managed inventory and vendor-managed inventory.

Benefits efficient merchandise control which fulfills the requirements of ECR-compliant procurement

processes more efficient communication between retailer and manufacturer/vendor

Key Process Steps Transfer the stock data of the retailer to the manufacturer Carry out replenishment planning with resulting sales order in the manufacturer system Generate the purchase order automatically in the retailer system with a report to the

manufacturer


Required SAP Applications and Company Roles

Required SAP Applications SAP SAP enhancement package 5 for SAP ERP 6.0

Company Roles Retail Purchaser Manufacturer


Process Flow DiagramECR Compliant Procurement Processes - Buyer-Managed Inventory

Create Purchase Order

Purchase order confirmation

Display incoming invoice

Create Sales Order

Perform goods receipt with reference to

shipping notice

Create Invoice

Man

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l Pu

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DESADV

Ret

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Buy

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Inbound processingORDRSP

Process deliveryInbound

processing of Idoc DESADV

Inbound processing of INVOIC Idoc


Process Flow DiagramECR Compliant Procurement Processes - Vendor-Managed Inventory

Transfer the stock data of the Retailer to the manufacturer

Outbound Idoc: ORDCHG

Replenishment planning in the manufacturer

system

Inbound processing of Idoc

ORDRSP

Inbound processing of

ORDSP

Man

ufac

ture

rR

etai

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Display Sales Order


ECR Compliant Procurement ProcessesIntroduction

Between Retailers and Manufacturers of the German textile and apparel industry, cooperative concepts within the framework of procurement, marketing and using of information and communication technology are developed.

Collaboration concepts, like Efficient Consumer Response (ECR), earn on importance. The new technologies open small and middle companies the possibility to accomplish the structure change and also to reinforce their competitive strength.

SAP offers a software solution within the framework of the SAP Best Practices Version, which reflects the new requirements of ECR conformable procurement processes.


ECR Compliant Procurement ProcessesIntroduction

With SAP software you have the possibility to build up the manufacturer and also the retailer side. We will show you here the procurement processes on the retailer side.

The ECR conformable procurement processes embrace the price catalog, the buyer managed inventory and also the vendor managed inventory.


Price catalog: PRICAT

PRICATIs an EANCOM standard message type

Area of master data

Enables pricing and catalog-related data for goods and services to be transferred from a vendor to a buyer

Complete listing of all productsNotification of changes Information relevant for all customers Customer-specific informationData supplied to a central article database


Price catalog: Supply of a data pool

Vendor Retailer

Master Data

Data Poolf. e. Sinfos

XI Inbound processingof PriceCatalogue Idoc

BAPI/ALE

Generate of PriceCatalogue Idocs

Sender Recipient

XI


Price catalog inbound: process flow

Simulation of IDoc Inbound processing

Display Header Data(catalog)

List of article

Adopt Profile

Process Price catalog manual / automatical

Process not existing article data in the Customer system (EAN‘s) /Creating article

Process available article data in the customer system (EAN‘s) / Update of article


Price catalog inbound: catalog creation

The catalog is stored on the database as a separate business object PriceCatalogue

EANCOM fields that do not correspond to R/3 fields are transferred to the system

It is possible to select articles to be updated Transfer can be controlled at field level

If an EAN exists uniquely in the system, article assignment is carried out

If errors occur, an application log containing all messages is created (transaction PRICATLOG)


Price catalog inbound: preparation

Preparation before catalog transfer

• Assignment of ILN to SAP vendor, purchasing group• Assignment of merchandise categories to SAP merchandise categories (for

each ILN)• Assignment of SAP merchandise categories to purchasing groups

Workflow preparation

• Assignment of buyers (SAP users) to organizational units, to which the relevant purchasing groups are assigned (transaction PFOM)


Price catalog inbound: accessing catalog maintenance

Header data•Set catalog status

• After processing, the catalog status is automatically set to 'processed'• Catalog status can be manually set to 'closed'

•Set test indicator•If you want to process the catalog you have to enter always the purchasing group •Price catalog could be processed manually or automatically


Price catalog inbound: accessing catalog maintenance

List of article• In the list of article you will find now the article (items) of the new

price catalog• Items are distributed among several views according to their status • New items have no entry in the ‘article’ field and you can find these

items in the ‘to be processed’ tab, (article can not be assigned) and ‘all entries’


Price catalog inbound: assignment of EAN to an article

• The assignment of EAN to an article occurs automatically when a catalog is created (unique EAN)

• Manually in catalog maintenance• Assigned article is stored in price catalog• Can be entered at a later date• If the EAN is not unique, all possible EANs are displayed• For assignment, articles are also displayed with the vendor article

number from the catalog• New articles need template articles (proposed from the merchandise

category)


Price catalog inbound: transferring catalog data to article data

Adopt profile• The transfer of catalog data to article data could be done with an

adopt profile• The adopt profile enables the simultaneous display of catalog data

and article data (or in the case of new data, the template article)

• Required data must be explicitly transferred from the catalog to the article side, either manually or by using a transfer profile

• Adopt profiles could be stored and used again• The article fields can be edited


Price catalog inbound: assignment of EAN to unit of measure

•Automatically • By mapping the EANCOM packaging type to alternative unit of measure in the

converter• During R/3-R/3 data interchange

•Manually in catalog maintenance• Can be changed at a later date

•New units of measure must be explicitly transferred • It is possible to transfer all units of measure from the catalog


Price catalog inbound: updating to article

•What can be updated:• Basic data• Texts• BOMs (new)

•What cannot be updated:• Characteristics• Generic article/prepack• BOM changes• Conditions• Material


Buyer managed inventory (BMI)

SAP ERP offers for communication the possibility of the generation of so called IDoc’s. An IDoc is an electronic document in SAP standard format.

SAP offers furthermore the possibility, with help of XI (open integration technology of SAP) to process all notification formats (like SEDAS, UN, EDIFACT, XML …).

For the more efficient communication between the retailer and the vendor, documents like purchase orders, order confirmations, delivery notifications and invoices are relayed electronically.


Scenario BMI: process flow


BMI: process flow

Lieferant

Retailer

1. Purchase order

Filiale Verteilzentrum2. PO confirmation 3. Shipping notif.4. Invoice

Store DC

Manufacturer


BMI: purchase order handling

Create Purchase

Order

Check PO confirmation

Retailer

Generation ofIDoc

ORDRSP

ORDERSCreate Sales Order

Generate PO confirmation

Manufacturer


BMI: goods processing

DESADVShipping

notification

Post goods receipt

Retailer

Create Deliveries

Articles to Retailer

ManufacturerEDI-Interface


BMI: payment transactions

Generation of IDoc

INVOICVerify and

post invoice

Retailer

Invoicing

Manufacturer


BMI: conclusion

Retailer system IDoc IDoc Vendor system

Create purchase order ORDERS

Customer order is created

ORDRSP Process customer order

Order is entered into pur-chase order.

DESADV Create delivery

Delivery note is created

Process goods receipt fordelivery note

INVOIC Create invoice

Create incoming invoice,invoice ferification takesplace


Vendor managed inventory (VMI)

Vendor managed inventory means, that the manufacturer will make the disposition of his products (as a service for the retailer), which are represented in the stores of the retailer

This requires, that the manufacturer knows the actual stock and sales data of his products in the retailer stores. The manufacturer could then make a prognosis of the sales data of his products and also an effectives replenishment would be possible.


VMI: process flow


VMI: transfer of stock data

Manufacturer

• Maintains stock data of his products at the retailer site

• Tracks sales history

Retailer

• Sends stock and sales data at a regular basis to the manufacturer

Stock Data


VMI: transfer of stock and sales data

Sending of stock and sales data

Retailer

Generation of IDoc Actual Sales data will be

updated in the information

structure S130

Stock data will be written in the table

WRPT

Manufacturer

PROACT


VMI: sending stock and sales data to the manufacturer

Done by report for selected supplier and storesinteractiv or in batch processing

Generation of IDoc PROACT

Article and data selection is controlled by profiles in the vendor masterstock and on-order quantitysales history


VMI: planning of replenishement

Manufacturer

• calculates replenishment requirements

• generates sales order

Order Response


VMI: planning of replenishment

Retailer

Generation of IDoc Via

replenishmentPlanning a

customer order will be created

Manufacturer

ORDRSP

Purchase orderwill be created


VMI: Planning of replenishment

Manufacturer

• updates sales order with PO number from retailer system

Order changes


VMI: planning of replenishment

Retailer

Generation of IDoc

Purchase order number from the

retailer will be insert into the

customer order

Manufacturer

ORDCHG

Purchase order change notice will be

created


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ecr compliant procurement processes

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managed inventorytransfer

resulting sales order