My name is Ina Glaes and I’m happy to announce the availability of the brand-new package for SAP’s new solution SAP Assortment Planning for Retail. Since November 2014, SAP offers this new product for the selection and planning of products per location. As you may know, the old SAP Merchandise and Assortment Planning (MAP) solution was taken off the market in 2012 – and the first version of SAP Planning for Retail was released.
Let me first explain the task sharing between SAP Planning for Retail and SAP Assortment Planning for Retail. SAP Planning for Retail covers the process of Merchandise Planning and Channel Financial Planning. It’s a SAP BW-IP based solution that provides an open-to-buy (OTB) plan on merchandise category level. That is on the other hand the starting point for SAP Assortment Planning for Retail, where you plan down to the article/item level per location based on customer and selling location characteristics. With the two products together the complete planning process in Retail is covered now.
I would like to continue with some background information why such a solution is so important in Retail/Fashion industry. Consumers are spoiled by an infinite band width of offerings, every product and every information about a product is available at their fingertips, everything can be delivered at home in a few days. They have higher expectations regarding the intervals of assortment refreshments and the number of new products. Not even talking about personalization of assortments, pricing and offers.
This means for retailer that they have to plan and execute more seasons/collections and they have to offer a compelling product assortment to keep customer engaged. And all of these business challenges need to be covered under financial and space constraints, very often still with manual planning via spread sheets which makes it difficult to manage versions and combine data. And without an end-to-end process integration – and also without usage of predictive science to support the multi-dimensional decision process.
With the new product, SAP provides a solution that is based on SAP Customer Activity Repository (CAR) – we call it a consuming app of CAR. Using HANA-in memory technologies for retail-time planning, using optimization algorithms and easy to use UIs, the new solution is build with the latest and greatest things we have at SAP available now. SAP Assortment Planning accelerates the planning cycles for greater efficiency and with that enabling the planning of more seasons/collections per year. The solution also allows to achieve more sales and profit from relevant assortments. It helps retailers to get the right breadth and depth of products in the right locations, and also to increase planning accuracy using predictive analysis – and with that to reduce inventory costs.
Don’t be surprised that I continue here mainly with the standard scenarios delivered by the product. Here is why: the rapid-deployment solution covers the implementation of the business processes and doesn’t contain (yet) additional content e.g. analytical content.
What are the process steps covered by SAP Assortment Planning for Retail?
The first step is in most cases the Merchandise Planning to perform consistent planning, from channel financial, location to merchandise/open-to-buy planning. When using SAP Planning for Retail for this part, the integration into the Assortment Planning process is available.
The assortment planning process starts with the creation of location clusters by applying attributes, metrics and clustering techniques. The planner can find the right clusters, the optimal number of clusters and of course the right store-cluster assignment.
The system supports the planner with fast simulations of clusters by attributes on demand to help identifying the location characteristics that influence the sales of products. Outliers can be easily recognized by the graphic representations. A very nice feature here is the integration into SAP JAM to share your cluster-set and clusters with colleagues.
The option plan, as an optional step, allows formulating an assortment strategy before planning on product and location level to support a balanced assortment width and depth. The planner can determine the number of product options for each category based on selected attributes. What does an option means? It means to define how many alternatives given to a customer e.g. for a T-Shirt in an upper price range. 5 different options, means 5 different T-Shirts in different style or color. Size is not relevant here, because it’s not really an additional option to offer the T-Shirt in different sizes – that is supposed to be the case anyway.
In the option plan the planner can review the planned number of options against the OTB budget coming from merchandise plan. This step allows validation of the assortment framework before digging deeper to product/location level.
Option Plan Workbook
The option plan is supported by modules. Modules serve for facilitating the assignments of a set of products – which belong together due to specific criteria – to clusters of locations – which belong together due to specific criteria. It reflects a set of options to represent a part of an assortment that is assigned to clusters of locations. Since options are eventually represented by products, a module represents a set of products. In a nutshell, a module makes sure that all products belonging together will be assigned as a group to the correct locations.
With this step the planner creates a so called assortment list based on carry-over products and new products. Historical product performance is used to decide what to keep and how many new products to introduce. The selection of existing products can be done manually, but also supported with a Pareto Analysis. The new products are represented by placeholder products referencing like products to plan and forecast demand.
The outcome of this step is a list of products can be used for the next step.
The combination of assortment lists and location cluster set is the basis for the assortment plan. It determines what products to offer per cluster and selling location. This simplify the product planning process by reducing it to valid combinations.
Assortment Plan Workbook
Plan Products & Sizes
In the product and size planning all number crunchers or masseurs can enjoy life 🙂 . They plan assortments down to style, color and size, define the sales and purchase quantities for each assorted product, as well as the initial allocation quantity per store and distribution center. And finally release the plan for execution.
Product Plan Workbook
I like to spend a few sentences about the user interfaces in this solution. You might have recognized it already by the screenshots: the solution consists of SAP Fiori Applications where it fits and on the other side SAP BusinessObjects Analysis Microsoft Office Edition when detailed number crunching is needed. This is well thought-out choice, because it provides an easy to learn and easy to use Fiori interface on the one side – and allows planners used to work with Excel (which is pretty usual in that business) a very familiar working environment enriched with planning functions to make life easier.
SAP Assortment Planning rapid-deployment solution
What is covered by the rapid-deployment solution and what not? The SAP Assortment Planning rapid-deployment solution covers the configuration of the assortment planning processes – of course in conjunction with a predefined service delivering kick-off workshops, key user training, and so on. The implementation service offered by SAP consulting enables customers to go-live in a fast and predictable approach, we also added an option to build a proof of concept as a first step.
We have two prerequisites before the SAP Assortment Planning rapid-deployment solution can start. We assume, that SAP Customer Activity Repository as a base is up and running, especially Demand Data Foundation (DDF). SAP Assortment Planning for Retail is using the master data and transactional data stored in DDF for planning. The configuration of the data provisioning is part of the new version of SAP HANA Customer Activity Repository rapid-deployment solution. Another Rapid-deployment solution we recommend here is the SAP Fiori Apps rapid-deployment solution to set up the needed components and deploy the needed apps for assortment planning.
I can also recommend the SAP Planning for Retail rapid-deployment solution if you want to use SAP Planning for Retail for the merchandise and channel planning.
Here the links to the related rapid-deployment solutions in SAP service Marketplace: