Sappress Sap for Retail

Heike Rawe

SAP® for Retail

Bonn � Boston

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Contents at a Glance

1 Introduction ................................................................ 17

2 SAP for Retail – An Overview ...................................... 25

3 Master Data, Forecasts, Analyses, and Connecting Applications ................................................................ 41

4 Planning ...................................................................... 93

5 Purchasing ................................................................... 133

6 Order Processing – Supply Chain Management .......... 171

7 Multichannel Retailing and Customer Service ............ 231

8 Enterprise SOA in SAP for Retail ................................. 295

9 Summary ..................................................................... 315

A Glossary ....................................................................... 323

B The Author ................................................................... 333

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7

Contents

Acknowledgment ......................................................................... 13Preface ......................................................................................... 15

1 Introduction ................................................................. 17

1.1 Subject of This Book ..................................................... 171.2 Aim of This Book .......................................................... 191.3 Target Groups of This Book ........................................... 191.4 Structure of the Book .................................................... 20

2 SAP for Retail – An Overview ....................................... 25

2.1 Anything Is Possible – The Success Story of Harrods Ltd. 26

2.2 SAP for Retail – Greater Than the Sum of Its Parts ......... 282.3 System Architecture – SAP ERP and SAP for Retail ........ 33

2.3.1 Architecture and Content of SAP ERP – A Brief Overview ............................................................ 34

2.3.2 In Perfect Harmony – SAP ERP and the Industry Solutions ............................................................ 36

2.3.3 Implementing New Functions at the Flick of a Switch – Enhancement Packages and the SAP Switch Framework .............................................. 37

3 Master Data, Forecasts, Analyses, and Connecting Applications ................................................................. 41

3.1 Master Data Solution – SAP Retail ................................ 413.1.1 Motives for Master Data Administration ............. 433.1.2 The Most Important Master Data in SAP Retail ... 453.1.3 A Word About Mass Processing .......................... 553.1.4 Data Retention Levels for Article Master Data .... 56

3.2 Possibilities of Master Data Administration ................... 573.2.1 What Is the Task of SAP NetWeaver Master Data

Management? .................................................... 57

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Contents

3.2.2 Global Data Synchronization with SAP NetWeaver MDM ................................................................. 59

3.3 The Architecture of the Master Data Solution – SAP NetWeaver MDM and SAP Retail ................................. 623.3.1 SAP NetWeaver MDM ........................................ 623.3.2 SAP Retail Operating with SAP NetWeaver

MDM ................................................................. 653.4 Software in Action ........................................................ 663.5 The Forecasting Solution ............................................... 68

3.5.1 The Right Article at the Right Place at the Right Time at the Right Price ....................................... 69

3.5.2 What If...? .......................................................... 713.6 The Analysis Solution – SAP NetWeaver Business

Intelligence ................................................................... 723.7 The Architecture of SAP NetWeaver BI ......................... 74

3.7.1 How Can the Requirements of Mass Storage Methods and Administration Be Met? ................ 77

3.7.2 PIPE – An Application of SAP NetWeaver BI for the Retail Sector ................................................. 79

3.7.3 Analytical Applications for the Retail Sector ........ 803.7.4 Examples of Real Analytical Applications ............ 81

3.8 SAP NetWeaver Process Integration .............................. 843.8.1 Implementation Phases and Architecture ............ 863.8.2 Shipment of Central Integration Knowledge ....... 903.8.3 Using SAP NetWeaver PI in SAP Retail ............... 91

4 Planning ....................................................................... 93

4.1 What Is Planned and How ............................................ 934.1.1 Strategic Planning ............................................... 944.1.2 Store Planning .................................................... 964.1.3 Merchandise and Assortment Planning ............... 97

4.2 The Solution – SAP Merchandise and Assortment Planning ...................................................................... 1044.2.1 NetWeaver BI Integrated Planning – Background

Knowledge ........................................................ 1064.2.2 SAP MAP – Functions ........................................ 108

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ContentsContents

4.2.3 Slow Seller Management – Price Planning Workbench ........................................................ 116

4.3 SAP MAP Architecture .................................................. 1194.4 Software in Action – SAP MAP ...................................... 1214.5 The Solution – SAP Demand Management .................... 122

4.5.1 SAP Price Optimization ...................................... 1224.5.2 SAP Promotion Optimization .............................. 1254.5.3 SAP Markdown Optimization ............................. 1264.5.4 Optimization Procedure ...................................... 127

4.6 SAP Demand Management Architecture ....................... 1294.7 Software in Action – SAP Demand Management ........... 131

5 Purchasing .................................................................... 133

5.1 The Solution – SAP Retail .............................................. 1335.1.1 Normal Purchase Order ...................................... 1375.1.2 Supply Source Determination ............................. 1385.1.3 Order Optimizing ............................................... 1395.1.4 Collective Purchase Orders ................................. 1425.1.5 Perishables Planning ........................................... 1435.1.6 Seasonal Procurement – Fashion Industry ........... 1455.1.7 Invoice Verification ............................................. 1505.1.8 Subsequent Settlement ....................................... 1535.1.9 Vendor Evaluation .............................................. 156

5.2 The Architecture of Purchasing ...................................... 1565.2.1 Integration View ................................................. 1575.2.2 Seasonal Procurement – Process Flow ................. 160

5.3 Software in Action ........................................................ 1625.4 The Solution for Global Trade – SAP Global Trade

Services ........................................................................ 1635.4.1 Import and Export Control (SAP Compliance

Management) ..................................................... 1645.4.2 Customs Processing (SAP Customs

Management) ..................................................... 1665.4.3 Risk Management (SAP Risk Management) ......... 1675.4.4 SAP Electronic Compliance Reporting ................. 167

5.5 The Architecture – SAP GTS .......................................... 1685.6 Software in Action ........................................................ 170

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Contents

6 Order Processing – Supply Chain Management .......... 171

6.1 Today’s Logistics Requirements ..................................... 1716.2 The Solution – SAP Retail .............................................. 173

6.2.1 Requirements Planning ....................................... 1746.2.2 Requirements Planning Type and Requirements

Planning Procedure ............................................ 1756.2.3 Replenishment Planning ..................................... 1766.2.4 Merchandise Distribution ................................... 1776.2.5 Warehouse Processing ........................................ 1846.2.6 Inventory Management ...................................... 1926.2.7 Foreign Trade ..................................................... 1966.2.8 Physical Inventory .............................................. 197

6.3 Supply Chain Management in SAP Retail – The Architecture .................................................................. 198

6.4 Software in Action ........................................................ 2006.5 The Solution – SAP Extended Warehouse

Management ............................................................... 2016.5.1 Goods Receipt in SAP EWM ............................... 2026.5.2 Goods Issue in SAP EWM ................................... 2046.5.3 Bin Management and Optimization .................... 2056.5.4 Higher-Level Processes ....................................... 2066.5.5 Reporting ........................................................... 2096.5.6 SAP EWM for Retail ........................................... 210

6.6 The Architecture – SAP EWM ........................................ 2116.7 Software in Action ........................................................ 2136.8 Other SAP Supply Chain Management Applications

for the Retail Sector ...................................................... 2146.8.1 SAP Transportation Management ........................ 2146.8.2 SAP Event Management ..................................... 2156.8.3 SAP Supply Network Collaboration ..................... 216

6.9 The Solution – SAP Forecasting and Replenishment ...... 2196.9.1 Benefits of SAP Forecasting and Replenishment ... 2206.9.2 Two Main Processes – Automated Replenishment

and Tactical Control ............................................ 2236.10 The Architecture – SAP Forecasting and Replenishment 2256.11 Software in Action ........................................................ 229

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ContentsContents

7 Multichannel Retailing and Customer Service ............ 231

7.1 Today’s Customer Service Requirements ....................... 2317.2 The Sales Channel of Retail Stores ................................. 2347.3 Interface to the Consumer – SAP POS and SAP

Enterprise POS .............................................................. 2357.3.1 What Data Is Sent to POS Systems and What

Data Is Returned to the Retailing System? .......... 2377.3.2 The Latest Generation of POS Solutions .............. 2407.3.3 Integration with SAP NetWeaver BI .................... 244

7.4 The Architecture – SAP POS .......................................... 2457.4.1 Downtime Security ............................................. 2477.4.2 The Special Case of Mobile Devices – Enhanced

Customer Service with Mobile POS .................... 2487.5 Software in Action – SAP POS ....................................... 2497.6 The Architecture – SAP Enterprise POS ......................... 250

7.6.1 Central System Management .............................. 2517.6.2 What Happens When Someone Makes a

Standard Purchase? ............................................ 2557.6.3 Downtime Security – High Available Store .......... 256

7.7 Software in Action – SAP Enterprise POS ...................... 2587.8 The Solution – SAP Retail Store ..................................... 259

7.8.1 SAP ERP in the Store .......................................... 2597.8.2 Central Maintenance and Administration ............ 260

7.9 The Architecture – SAP Retail Store ............................... 2657.10 Software in Action – SAP Retail Store ............................ 2677.11 The Solution – SAP Workforce Management ................. 2707.12 The Architecture – SAP Workforce Management ........... 2747.13 Software in Action – SAP Workforce Management ........ 2787.14 The Solution – Multichannel Retailing with SAP

Customer Relationship Management ............................. 2797.14.1 Order Entry ....................................................... 2797.14.2 Order Processing ................................................ 2807.14.3 Evaluating Customer Relationships ..................... 2817.14.4 Multichannel Marketing ..................................... 2857.14.5 Customer Cards for Customer Retention

in the Store ........................................................ 2857.14.6 The Internet as a Distribution Channel ................ 287

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Contents

7.14.7 Distribution Channels – Catalog, Direct Mail-Order, and Traditional Mail-Order .............. 292

7.15 Software in Action – SAP CRM Web Shop ..................... 293

8 Enterprise SOA in SAP for Retail ................................. 295

8.1 The Concept of Service-Oriented Architecture .............. 2958.1.1 The Status Quo and the Challenges .................... 2958.1.2 SOA – A New Paradigm ...................................... 2978.1.3 What Is the Difference Between Enterprise SOA

and SOA? ........................................................... 2998.1.4 Enterprise SOA – A New Architecture for New

Business Models ................................................. 3018.2 Business Process Platform ............................................ 304

8.2.1 Composition ....................................................... 3058.2.2 Enterprise Services Repository and Control

Processes ............................................................ 3058.2.3 Process Components .......................................... 3068.2.4 Integration Platform ........................................... 306

8.3 Where Do Enterprise Services Come From? ................... 3068.3.1 Enterprise Service Bundles ................................. 3078.3.2 Connectivity Kits ................................................ 3078.3.3 Service Enablement of Existing Applications ....... 308

8.4 Examples of Beneficial Uses of Enterprise SOA .............. 3098.4.1 Connecting Processes in Innovative Ways ........... 3098.4.2 Redesigning Processes ........................................ 3118.4.3 Simple Design and Execution of Processes .......... 3118.4.4 The Latest Enterprise Services and Additional

Information ........................................................ 312

9 Summary ...................................................................... 315

Appendices

A Glossary ................................................................................. 323B The Author ............................................................................. 333

Index ............................................................................................. 335

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17

It was trade that lifted the world—both the old and the new—out of barbarism. (Karl-Julius Weber)

Introduction1

The SAP offering for retail companies can take on different forms depend-ing on the company’s needs. At its heart lies the SAP Retail retailing sys-tem, which is accompanied by a range of software solutions, each with its own, retail-specific purpose. The aim of this book is to illustrate how these retail solutions interact with each other to give the reader a better understanding of the solution offering.

SAP for Retail and SAP Retail

This book is called SAP for Retail, but SAP Retail will also be referred to regularly. SAP for Retail covers the entire SAP solution offering for the re-tail sector, whereas SAP Retail relates specifically to SAP Enterprise Resource Planning (ERP) system. A more detailed explanation can be found in Section 2.3 System Architecture – SAP ERP and SAP for Retail.

Subject of This Book1.1

Information technology is a critical success factor for retail companies. Sluggish sales markets and increasing competition in retailing make it essential for retail companies to optimize their internal processes. In times of e-business and t-business, as well as global and interorganiza-tional requirements of supply chains and customer relationship man-agement, companies are regularly forced to redesign their business processes.

E-business refers to online shopping, that is, sales on the Internet. End customers can browse electronic catalogs on the Internet, select prod-ucts, place an order, and pay immediately online. A lesser known term is

Information technology as a success factor

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1 Introduction

t-business, which denotes sales through the medium of television. T-busi-ness is often subsumed by e-business. The most recent development is m-business: sales through mobile telephones.

To keep up with the constantly growing demands of the market, every company must pay attention to the fundamental principles for success and take action accordingly. These fundamental principles for success are:

The customer is only happy if goods are available in the right place at EE

the right time and for the right price.

A company must be able to respond flexibly to changes in demand EE

patterns to retain its customer base and win new customers.

It is only possible to respond promptly to delivery delays if they are EE

known of in good time.

Working capital can only be freed up for important investments if EE

stock levels can be reduced through shorter lead times and procure-ment cycles.

SAP AG helps its customers meet all of these challenges with innovative technology so they can operate as part of a complex economic network and respond effectively to market demands.

Modern systems in retail respond to changing demands, which means they can do more than just control the flow of goods and report sales figures to the head office; they are also capable of the following:

Complex processes that forecast consumer demand while taking into EE

account information about space and capacity in the supply chain and automatic item planning

Price optimization, markdown management, assortment planning, EE

procurement and distribution processes, goods control processes such as promotions or price reductions, and accounting for special forms of management such as consignment

Integration of all possible distribution channels and decentralized EE

workforce management, both of which help companies meet the sig-nificant challenge of customer retention and thereby contribute to increased consumer satisfaction

Principles for success

Capabilities of modern retail

systems

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19

Target Groups of This Book 1.3

Increased transparency of current revenue, sales, and inventory informa-tion is crucial to the success of any retailer. After all, it is only possible to take appropriate action in a given situation with valid, up-to-date, and transparent information. The SAP software supports you, the user, with the key challenges you face—not only in streamlining and accelerating processes, but also in tapping potential for expansion, analysis, and cus-tomer retention.

Aim of This Book1.2

The aim of this book is to provide you with a comprehensive overview of SAP software for the retail sector by presenting the existing components and their architecture and examining how they interact from a technical perspective. This book will explain the most important business pro-cesses in each of the components.

After reading this book, you should have a fundamental understanding of the architecture and concepts behind each component developed by SAP AG for the retail sector. In addition to retailing, wholesale is the other major part of the trading industry. SAP AG also offers solutions for wholesale, but these are not discussed in this book.

Special attention is given to the concept of enterprise service-oriented architecture (enterprise SOA), to which an entire chapter is devoted. The book relates to the status of developments in 2008, but different releases are discussed depending on the component. The releases are identified in each chapter.

This book does not contain information about installing, administering, or using the components described. These aspects are described in fur-ther publications and SAP standard documentation.

Target Groups of This Book1.3

We have a particular image of you, the readers, in mind. This image has helped us write this book, and we hope it will make it easier for you to read.

Overall understanding of SAP for Retail

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1 Introduction

We assume that you work in either an IT company or an IT department of a retail company. You have bought this book or been given a copy by a colleague or manager to answer your questions about the SAP product portfolio for the retail industry.

We also assume that you already use SAP software or are currently decid-ing whether to use SAP solutions. Regardless of whether you are using our software already or are still at the assessment stage, this book will assist you in understanding the software offering.

You would like to obtain an overview of the SAP offering for the retail sector and discover new concepts and technologies. In this respect, this book is also ideally suited to IT decision-makers, project managers, and any other interested parties.

Another important target group is our partners, who want an overview of the offering to help identify any niches and develop products that complement the portfolio.

To make sense of the content of the book, you need to have a basic tech-nical understanding; knowledge of SAP products such as SAP ERP, the Business Suite, or SAP NetWeaver® is an advantage.

Structure of the Book1.4

You can read the book chapter by chapter or skip over certain chapters depending on your preference. If you read chapter by chapter, you will experience a journey through the components of the SAP software offer-ing for the retail sector. To establish a link to the real world of business, we have included typical questions from both the consumer and retailer perspectives in each chapter.

These questions constitute a guide to the book and enable readers to skip over certain chapters and focus on the parts that are particularly relevant for them. In this sense, the book is—to the greatest possible extent—modular in structure to allow you to choose the parts you read according to your preferences and needs.

The chapters are as follows:

IT employees in the retail sector

SAP partner companies

Modular structure

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Structure of the Book 1.4

Chapter 1 IntroductionEE What is the object of the book and who is it aimed at?

Chapter 2EE SAP for Retail – An Overview How do the components relate to each other? This chapter takes a broad look at the architecture of the SAP software for the retail sec-tor. It presents the ways in which SAP NetWeaver, SAP ERP, and SAP Retail are interrelated, offers a brief outline of the history of SAP for Retail, and provides some initial insight into the capabilities of the components.

Chapter 3 Master Data, Forecasts, Analyses, and Connecting Appli-EE

cations How do manufacturers and retailers know that they are dealing with the same article? How do retailers know which articles they have to offer, how many, when, and at what price? How can retailers analyze and increase their operational efficiency and speed of response to consumer behavior?

This chapter introduces you to the features of master data administra-tion that are particular to the retail sector. The emphasis here is on the apparel segment, whose master data presents specific requirements. Furthermore, the chapter explains the foundations for determining requirements and forecasting. In Section 3.6 The Analysis Solution – SAP NetWeaver Business Intelligence, you become acquainted with SAP NetWeaver BI and the possibilities presented by analytical appli-cations. We also explain something that is essential to the understand-ing of data flows, namely, SAP NetWeaver Process Integration, which plays a pivotal part in connecting systems.

Chapter 4 PlanningEE How can you plan in order to satisfy demand as accurately as possi-ble? How do you set prices that guarantee a decent margin but remain affordable for consumers? How do you plan sales promotions and assortments that will win you new retail customers and satisfy exist-ing customers? How do you plan price reductions for articles?

This chapter presents the most important planning options, from strategic planning and store planning to merchandise and assortment planning.

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1 Introduction

Chapter 5EE Purchasing How can you best map relationships with vendors in the system? How do you handle order proposals created automatically by the sys-tem? When do you accept them, and when do you have to modify them? What logistical factors must be taken into account in purchas-ing? SAP Retail provides special functions tailored to the needs of the retail industry that are not available in other SAP ERP components (for example for durable goods, foodstuffs, fresh produce, and fash-ion articles). Pricing, including free-goods discount and other forms of discount, is also dealt with here.

Chapter 6 Order Processing – Supply Chain ManagementEE

Which factors contribute to optimal order processing with on-time, complete, and error-free deliveries of goods to the consumer? How do you arrive at the ideal requirement quantity? How can you keep costs to a minimum?

Costs in the supply chain might, for instance, arise from logistics costs such as those incurred for procurement and transportation, but also from storage, aging, wear and tear, and breakage. Stock inventory also result in costs such as interest on capital, depreciation, and insurance. Logistics is a particularly important point for fast-moving consumer goods. This chapter describes the functions that are significant for the retail sector, in particular, when managing supply chains.

Chapter 7 Multichannel Retailing and Customer ServiceEE What happens to purchasing data? Despite the large number of retail-ers that operate online only, the traditional store still has a consider-able part to play in multichannel retailing. Today’s consumers still want to see, touch, and try goods in the real world. That said, as consumers become increasingly familiar with the Internet, they will use it more regularly for purchases in the future. The Internet has changed not only the way in which consumers make purchase deci-sions but also their expectations in terms of personalized information and services. Nowadays, consumers want to decide themselves where and when they shop. This is the very reason e-business has taken off so quickly—with no end to the growth in sight. This chapter also addresses the subject of managing customer relationships and dem-onstrates how software can be used to improve customer retention.

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Structure of the Book 1.4

Chapter 8 Enterprise SOA in SAP for RetailEE How can a retailer keep IT costs down in spite of continually chang-ing business processes and requirements? How can a retailer mini-mize the cost of maintaining the different systems in a heterogeneous system landscape? How can a retailer become integrated in a supply chain network with little effort and collaborate with manufacturers and vendors?

Enterprise SOA supports the retail sector with all of these questions and shows the way to the future.

Chapter 9 SummaryEE What should you take with you? This chapter provides a brief and concise summary of the contents of the book.

The appendix provides an extensive reference resource. It contains the required technical terms, some SAP acronyms, and much more quick reference information, all presented in a clearly laid-out format.

Enjoy!

Heike Rawe

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3 Master Data, Forecasts, Analyses, and Connecting Applications

pricing and marketing strategies to be tailored to the needs of consumers with purchasing power. Customer Loyalty Marketing also ensures that sales promotions hit the spot in terms of the interests of the respective target groups.

Other analytical applications are concerned with SAP MAP (see Chapter 4 Planning) and supply chain analytics. Supply chain analytics provides BI Content for SAP Forecasting and Replenishment. The analytical applica-tions for inventory management and stock ledger analytics supply data for store profitability statements (for example, ending inventory and cost of goods sold), for management reporting (for example, sales, margins, ending inventory), and for other business processes such as open-to-buy or pricing.

Analytical CRM links customer information with information about mate-rial groups and articles. Analytical CRM on the basis of SAP CRM offers retail companies increased clarity of the degree of customer retention and customer lifetime value, for example, with ABC loyalty analyses. Furthermore, the methods of analytical CRM can be used to tap cross-selling potential with assortment and sales analyses; customers and store comparisons are possible with cluster analyses, and campaigns can be measured in terms of their success.

SAP NetWeaver Process Integration3.8

Many retail companies have IT landscapes that consist of isolated sys-tems and datasets: POS systems are linked to back office solutions, which are interlinked themselves. Such disparate system landscapes impede cross-system business processes. Financial management, inventory track-ing, and tracing in logistics and analyses are often associated with consid-erable investment and personnel costs. It is not unusual for connections between systems to be so inflexible that any adjustments to company-specific requirements lead to long-lasting cost increases.

This is where SAP NetWeaver Process Integration (SAP NetWeaver PI, also known as SAP Exchange Infrastructure or SAP NetWeaver XI) comes into play. This application acts as a central storage point for integration knowledge from all connected systems. It removes the need to search

Analytical CRM and data mining

Decentral system landscapes

SAP NetWeaver PI

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SAP NetWeaver Process Integration 3.8

through different systems; relevant information can be accessed cen-trally. The following explanations relate to releases XI 3.0 Exchange Infrastructure, XI 7.0 SAP NetWeaver Usage Type Process Integration, and XI 7.10 SAP NetWeaver PI.

With SAP NetWeaver PI, integration knowledge allows cross-system business processes to be put into practice with ease by connecting sys-tems that were implemented by different manufacturers (SAP and non-SAP) in different versions and programming languages (Java, ABAP, and so on). Its foundation is an open architecture based on open standards, for example:

XML (Extensible Markup Language)EE

SOAP (Simple Object Access Protocol)EE

XSD (XML Schema)EE

WSDL (Web Service Description Language)EE

XSLT (Extensible Stylesheet Language for Transformation)EE

XPath (XML Path Language)EE

BPEL (Business Process Execution Language)EE

SAP NetWeaver PI drastically reduces the number of interfaces to be maintained, because all connected systems only identify the Integration Server as a partner system. With SAP NetWeaver PI, the entire lifecycle of an integration is covered: designing cross-system business processes and the associated interfaces and mappings, configuring the distribu-tion rules for messages, executing the integrated business processes, and monitoring the message flow.

SAP NetWeaver PI offers the following basic services:

Modeling and design of messages, transformations (mappings), and EE

cross-system integration processes

Configuration and control of collaborative processes (processes in the EE

business world that require a cross-system implementation) and the underlying message flow

Runtime for message and process controlEE

Adapter Engine for integrating heterogeneous system componentsEE

Covering the lifecycle of an integration

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86


Central monitoring of message flow and processesEE

Both A2A (application-to-application) and B2B (business-to-business) sce-narios are supported.

Implementation Phases and Architecture3.8.1

Three phases are involved in implementing a collaborative, cross-sys-tem process, each of which is reflected in the key components of the architecture.

Figure 3.16 will help you gain a clearer understanding of the architecture of SAP NetWeaver PI.

Integration Builder (IB)

IntegrationDirectory

(ID)

IntegrationRepository

(IR)

IntegrationServer

(IS)

Central Monitoring

SAPSystems

3rd PartySystems

3rd PartyMiddlewareComponent

Marketplace/BusinessPartner

Design Configuration Runtime

System Landscape Directory (SLD)

Architecture of SAP NetWeaver PIFigure3.16

Design

The first step is to draft the design in the Integration Repository of the Integration Builder, which includes the required interfaces and map-pings. The interfaces can either be described as new, system-indepen-dent interfaces and then be implemented as proxies (outside-in devel-opment) or be based on existing functionality (inside-out development).

Interfaces and mappings

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87


Alternatively, both of these approaches can be combined. During the design time, the message exchange between application components is described in a purely logical manner, that is, independently of actual, installed systems.

Configuration

The next step is the configuration of the Integration Builder in the Inte-gration Directory, which involves setting up the collaborative process for an actual system landscape. Design-time objects can be used as templates for this purpose. In addition, conditions for selecting recipients (routing) and mappings to the recipient interfaces can be defined.

The message flow in the Integration Server is then managed during run-time on the basis of the configuration. The message flows themselves can be monitored centrally.

The central storage locations for the design time (Integration Repository) and the configuration time (Integration Directory) are processed in a single tool, the Integration Builder.

Content from the System Landscape Directory serves as a basis for the design, configuration, and runtime of SAP NetWeaver PI. This SAP prod-uct is a central directory of descriptions of products, their software com-ponents, logical and technical systems, and the product versions installed on these systems.

Runtime

The SAP NetWeaver PI runtime consists of several components, which are shown in Figure 3.17.

The central component is the Integration Server, which receives messages from the application systems (Integration Engine and Adapter Engine) and forwards them on the basis of the central configuration (Integration Engine). The message format used by the Integration Server is based on XML, which has become an established exchange format, not only on the Internet. Other standards and tools build on the XML standard and make it easier to use, for example, XSD, XSLT, and Xpath. XSLT, for instance, can be used to define mappings that are needed because two

Integration Server

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88


communication partners have different message structures. Mappings can be realized graphically in Java, ABAP, or XSLT.

Integration Server

SAP Web AS 6.20

Central Monitoring

IntegrationDirectory

SystemLandscapeDirectory

Business Process Engine

Integration Engine

Adapter Engine

SAPSystem

IDocsRFCs

Proxy

3rd PartyApps

FileDB

JMS

Apps of BusinessPartner

Local Integration Engine

Proxy Runtime

XIProtocol RosettaNet, …

PartnerConnectivity

Kit

Apps of(small)

BusinessPartner

XIProtocol

Runtime Environment of SAP NetWeaver PIFigure3.17

As a standard format, XML also facilitates the process of connecting to other systems and applications. If data from the external system can be converted into XML with an adapter, conversion into other XML formats and thereby also for other recipients is just another small step away.

All applications and systems exchange messages with each other by way of the Integration Server because defining mappings in pairs (system to system) would not be effective.

Three engines work hand in hand on the Integration Server:

The Integration Engine receives messages by means of the message pro-tocol and executes central services such as routing and mapping for the messages it receives. The Integration Engine is also used for messaging in application systems (Local Integration Engine) with the proxy runtime (outside-in development).

Adapters are used to connect other systems to the Integration Server. With the exception of the IDoc adapter and plain HTTP adapter, all

Integration Engine

Adapter Engine

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adapters use the Adapter Engine, which provides the central services for messaging, queuing, and security handling. Each adapter converts calls or messages from a sender into the message format for the Integration Engine. Conversely, the adapter also receives messages from the Integra-tion Engine and converts them for the recipient. Therefore, instead of having separate communication options for every combination of appli-cation systems, one conversion into the respective message protocol is all that is needed to enable communication with the Integration Server.

Expressed simply, the adapters and the Integration Engine restrict them-selves to forwarding messages to the recipient(s) and, if necessary, per-forming mapping. As soon as a message has been sent successfully to the recipient, processing of that message is complete. The Business Process Engine now enhances the functionality of the Integration Server with stateful message processing; the engine executes a process model and awaits any further messages before continuing. Figure 3.17 also provides an overview of all of the components that can communicate with the Integration Server.

As part of SAP NetWeaver PI, SAP ships adapters for communication within companies (A2A) and between companies (B2B).

A2AEE For A2A integration, the standard shipment comes with adapters to connect SAP systems (both by means of proxies and with RFC and IDocs) and non-SAP systems, referred to as third-party applications (for example, File, DB, JMS, SOAP, HTTP).

B2BEE For B2B connections to business partners, the standard shipment comes with adapters such as the RNIF adapter (RosettaNet) and the CIDX adapter (Chem eStandards). In addition, smaller business part-ners can be connected using what are known as partner connectivity kits. These enable smaller business partners that do not have SAP NetWeaver PI to exchange data with a business partner that uses SAP NetWeaver PI.

Third partyEE SAP also works with partners that develop adapters for third-party applications


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90


Custom developments and enhancementsEE SAP customers also have the option of developing or enhancing adapt-ers. This is supported by supplementary modules.

Shipment of Central Integration Knowledge3.8.2

The content of the Integration Repository, the central store for integra-tion knowledge that is needed to describe collaborative processes, can be shipped in its entirety. Together, these objects are referred to as Process Integration Content, or PI Content.

A software component version from the System Landscape Directory is used to define a cohesive collection of objects in the Integration Reposi-tory as the smallest possible software component. SAP software com-ponent versions are also the basis for software components containing application objects in SAP systems, which means that PI Content and application content can be assigned to a mutual software component version in the SAP system.

In addition to the technical infrastructure, SAP provides predefined PI Content to help customers achieve efficient process integration at as low a cost as possible.

In many cases, this enables out-of-the-box integration without any need for complex developments. All Integration Repository objects are pro-vided as part of the PI Content. In addition to interfaces, these objects also include mappings, configuration templates for message flow, and templates for specific adapter configurations that can be used to config-ure customer-specific system landscapes with the support of a wizard.

As a result, after implementing new PI Content directly on the basis of their systems as described in the System Landscape Directory, SAP cus-tomers can start using the delivered integration.

SAP partners can also develop and offer PI Content. An overview of the PI Content currently offered by SAP can be found in the SAP Developer Network (SDN) at https://www.sdn.sap.com/irj/sdn.

PI Content

Out-of-the-box integration

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91


Using SAP NetWeaver PI in SAP Retail3.8.3

SAP NetWeaver PI is the central connection channel between all SAP for Retail applications, connecting the retailing system to SAP NetWeaver BI, SAP NetWeaver MDM, and SAP Forecasting & Replenishment. SAP NetWeaver PI always comes into play when data is exchanged in different formats and when large amounts of POS data are to be processed in a cost-effective way together with the PIPE, as demonstrated by volume tests.

This section offers only a brief explanation of two integrations of retail applications on the basis of SAP NetWeaver PI. For further integrations on the basis of enterprise SOA, information about enterprise services bundles is provided in Chapter 8 Enterprise SOA in SAP for Retail.

On the basis of PI Content alone, POS integration allows the SAP POS solution, SAP POS and SAP Enterprise POS, to be connected to an SAP Retail system and the PIPE (see Figure 3.18).

SAP NetWeaver Process Integration (PI)

Integration Server

File Adapter

JMS Adapter

RFC Adapter

IDOC Adapter

ARTS XML Adapter

SAP POS

R

SAP Enterprise

POS

R R

SAP BI (PIPE )

SAP ERP / SAP Retail

3rd Party POS

System

3rd Party ERP

System

R R R

Integration Directory

System Landscape Directory

System Landscape Data

Integration Data

Integration Engine


Adapter Engine

POS Integration in SAP NetWeaver PIFigure3.18

Master data is sent from SAP Retail to the POS solution, and transaction data flows back into the PIPE, which is part of SAP POS Data Management. In addition, the PIPE and SAP Retail are still linked so that data that is not aggregated and not based on SAP NetWeaver PI can be transferred.

In addition to the integration of SAP solutions, PI Content enables third-party POS solutions and third-party ERP systems to be connected, pro-vided they support the ARTS XML industry standard.

Main connection channel

Point of sale integration

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92


PI Content allows master data systems to be integrated with SAP NetWeaver Master Data Management Release 5.5 so that master data can be consolidated, harmonized, and managed centrally (see Figure 3.19).

Master data management

integration

SAP NetWeaver PI

File Storage

SAP ERP SAP SRM SAP CRM SAP Retail SAP BILegacy System

SAP Master Data Management (MDM)

File System Management

R

R R R R R R R

MDM IntegrationFigure3.19

First, reference data (fixed values and Customizing values) are sent once to the SAP NetWeaver MDM server. After this initialization has taken place, master data can be sent continuously from connected systems cen-trally by means of SAP NetWeaver PI to the MDM server, where it can be consolidated and harmonized. The cleaned master data then passes back through SAP NetWeaver PI to the connected systems and into an SAP NetWeaver BI system so that central analyses can be performed.

The PI Content provided contains interfaces and their mappings as well as the supported scenarios as configuration templates, and therefore enables rapid integration.

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150

5 Purchasing

dates confirmed (for example, the vendor’s staging date) are compared with the planned target dates.

If the target and actual dates differ to such an extent that a predefined tolerance is exceeded, actions can be triggered automatically (for exam-ple, a cancellation threat can be issued to the vendor) or the need for manual intervention can be flagged. In the latter case, the user can make adjustments to the order in a workbench provided especially for this purpose.

This calculation of dates, referred to as scheduling, is triggered in the pur-chase order transactions (order list, grouped purchase order document, and seasonal purchase order). Its purpose is to provide items with dates that can be monitored. We can distinguish between backward scheduling and forward scheduling.

When documents are generated in seasonal purchase order processing, this is confirmed in the upstream shop-price report—provided the docu-ments originate there. This means the buyer always has an overview of the document flow in seasonal purchase order processing.

If a buyer wants to order an article that is new to the company (for instance, when a vendor has a special offer or the buyer wants to intro-duce a new seasonal article into the assortment), he can create a basic arti-cle in seasonal purchase order processing that contains only the master data relating to this particular purchase order. This enables the buyer to order the article without it first being created in full as an item of master data. It is always possible to complete the remaining master data later.

Invoice Verification5.1.7

Invoices must be entered and verified efficiently. Logistics invoice veri-fication allows vendor invoices to be entered automatically by means of EDI or XML or manually with reference to preceding documents. The invoices can be verified automatically in dialog mode or in the background. Errors identified during verification can be corrected in a number of ways. The system forwards accepted invoices to financial accounting. Figure 5.6 provides an illustration of the invoice verification procedure.

Entering vendor invoices

automatically

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151

The Solution – SAP Retail 5.1

Logistics InvoiceVerification

Check BasedonGoods Receipt

Assignment Test

Goods Receipt Supplier

TargetInvoice

Actual CostSettlement

?Payment

no Goods Receipt

Repeated Checksuntil Goods Receipt

Supplier

TargetInvoice

ActualCostSettlement

?Payment

Invoice Verification ProcedureFigure5.6

In logistics invoice verification, the system creates a target invoice based on the articles and quantities entered in the goods receipt. This target invoice is checked against the actual invoice issued by the vendor before payment is made. Therefore, this process takes the actual goods receipt as its basis.

The assignment test function can still be used as a background process step prior to invoice verification. This function is used to ensure that the system only starts invoice verification if open goods receipts exist for an invoice. An assignment test is quicker than a complete invoice check in the background, because the system is required to process less data from the database (for example, no article data is required) and perform fewer checks and evaluations.

Another option presented by logistics invoice verification is based on the concept of evaluated receipt settlement (ERS). Here, the system creates a target invoice based on the articles and quantities entered in the goods receipt, and the amount determined is paid to the vendor. The extent

Assignment test

Evaluated receipt settlement (ERS)

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5 Purchasing

to which a vendor agrees to the use of ERS—for all purchase items or only return items—is defined in the vendor’s master record (purchasing data).

The prepayment function allows invoices to be paid before they have been checked. This is especially appropriate if a cash discount agreement has been negotiated. In this case, the invoice is entered regardless of whether a goods receipt exists. Payment to the vendor is then triggered. To use this function, settings must be made in both Customizing and the vendor master record.

Invoice Verification Process – Rough Outline

The vendor invoice is entered and assigned to the purchase orders or goods receipts. This can take place in two ways:

Online in the systemEE

Via EDI or XML, in which case the invoice data and numbers of the EE

corresponding reference documents are imported into the system automatically in IDocs

When it comes to verifying the invoice, the actual invoice amount is checked against the target invoice amount. On the basis of a tolerance group, excessive invoices can be reduced automatically up to a fixed limit. The vendor is automatically informed of any such reductions. Incorrect invoices must be processed by the user, who must revise the assignments, correct the conditions, and so on. The invoice is then sent for verification again.

Revising and Posting Invoices in Financial Accounting

Incorrect invoices can be rectified in different ways:

By adapting conditions, for example, if a vendor discount has been EE

incorrectly maintained in the system

By excluding purchase orders or articles from an invoice, for example, EE

if an error was made when a vendor invoice was assigned to purchase orders

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The Solution – SAP Retail 5.1

By adjusting quantities or prices, for example, if the vendor issues an EE

invoice for a greater delivery quantity than was entered in the goods receipt

By changing the tax code, for example, if the vendor invoice is based EE

on too high a tax rate

If the invoice is incorrect as a result of inaccurate data in the system (for example, incorrectly maintained vendor conditions or tax code), the buyer responsible is automatically notified when the error is corrected—provided the relevant Customizing setting has been made.

Invoices that are identified as correct are transferred to financial account-ing in the form of a posting record, where they are then posted. If finan-cial accounting is run in another SAP system or an external system, the posting records are transferred by remote function call (RFC).

Subsequent Settlement5.1.8

Subsequent settlement, also known as vendor relationship, enables one-time or periodic settlement of conditions to be deferred to a later time. The system automatically updates the relevant sales and settles the con-ditions at times defined by the user.

Retailers and their business partners meet at regular intervals (for exam-ple, at the start of each year) to negotiate rebate arrangements for the forthcoming period (usually that year). The prices for individual articles can be set directly, or end-of-period rebates can be agreed for one or more articles. The results of these negotiations are entered in the system. It is possible to backdate the commencement of a rebate arrangement, which means sales in the past can be assigned to a new arrangement by performing a retrospective compilation of statistics.

Throughout the validity period of the arrangement, orders are placed with the respective goods suppliers, corresponding goods receipts are posted, and all received vendor invoices are entered and verified. If the respective Customizing settings have been made for the condition types that appear in an arrangement, provisions are created for the conditions concerned when the goods receipt is posted. Furthermore, sales subject

Correct invoices

One-time or periodic settlement

Volume-rebate arrangements with validity period

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335

Index

A

Adapter Engine, 89Affinity, 101Aggregated Long-Term Forecast, 114Aggregation, 78Allocation of warehouse stock, 182Allocation table, 178

Processing, 178Allocation with direct delivery (third-party processing), 182Analytical applications, 80Analytical CRM, 84, 282Analytic Engine, 76Article category, 47Article grouping, 49Article hierarchy, 50Article Master Data, 42, 46, 56, 66Article type, 47Article valuation, 194Assortment Management, 102Automated replenishment, 224Automatic allocation table creation, 179

B

Back office, 242Bar code, 207, 236Benefits of enterprise SOA, 302BI Content, 81, 109Billing, 192Bin management, 171Bottom-Up planning, 100, 102Bullwhip effect, 220Business explorer, 76Business function, 38

Retail, 38Business Intelligence Platform, 74Business network transformation, 297Business Package, 275Business Partner Data, 53

Business process engine, 89Buying patterns, 282

C

Call center, 279Category, 51Centralized procurement strategy, 174Change in Stock, 187CIF Technology, 211Cleansing, 62Closed loop, 106Collaborative planning, forecasting and replenishment (CPFR), 212, 221Collective purchase order, 181

Items, 181Collective purchase orders, 142Composite Applications, 34Configuration, 36Configurator, 246, 253Connectivity kits, 307Consumption-based planning, 174Cross-docking, 173, 183, 203Customer cards, 285Customer data, 235Customer loyalty marketing, 83, 287Customer Master Record, 53Customer relationship management, 279Customer retention, 231Customs processing, 166

D

Data mining, 76, 84Data pool organizations, 59Data Warehousing functionality, 74Data Warehousing workbench, 76Default service schedule, 274Demand group, 124Demand influencing factors (DIF), 225

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336

Index

Demand reality, 68Distribution chain category, 52Document flow, 150Downtime security, 247, 256

E

e-business, 17E-commerce, 290E-marketing, 289Embargo check, 165Employee data, 272Enhancement Package, 38Enterprise service bundles, 307E-service, 291ES Workplace, 312European Union, 167Evaluated receipt settlement, 151Extensible Markup Language (XML), 87Extensible Stylesheet Language for Transformation (XSLT), 87

F

Finding storage bins, 203Flow-through, 173

Merchandise-driven, 183Recipient-driven, 183

Forecast-based planning, 176Forecast optimization, 127Forecasts, 69, 123, 272Foreign trade, 196Franchise, 264

G

Generic article, 47Global Data Synchronization, 59Global transport management, 172Goods issue, 188

In SAP EWM, 204Posting, 190

Goods movements, 188Goods receipt, 184

In SAP EWM, 202Processing with a reference document, 185Without reference to a document stored in the system, 186

Governance, 300Grouped purchase order document, 149

H

Handling unit management, 205Handling units, 189, 205Head office, 252

Server, 246, 251

I

Identification standard, 42Import and export control, 165Inbound interface, 243Indirect purchase requisition, 174Industry extension, 38In-store inventory management, 269In-store processor, 257Integrated warning system, 229Integrating handhelds, 264Integrating POS data, 261Integration directory, 87Integration engine, 88Integration knowledge, 84Integration repository, 86Integration server, 87Intra-European-Union flows of goods, 167Intranet, 260Inventory management, 192Investment buying, 140Invoice verification, 150

J

J2EE, 250Just in time, 172

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337

Index

K

Knowledge management, 281

L

Layout workbench, 118Listing, 55Load building, 140

M

Markdowns, 108, 126Mass processing, 55Master Data administration, 43, 57Master Data retrieval, 44Material group, 49Material group Hierarchy, 49Merchandise and Assortment Planning, 97, 111Merchandise distribution, 173, 177, 183Merchandise plan, 111Mobile sales devices, 248Model-driven development, 300Model-View-Controller approach, 266Multichannel retailing, 232Multiformat retailer, 242Multimedia product catalog, 292

N

Networks, 256Normal purchase order, 137

O

Offline capability, 257OLAP, 76Operational Assortment Planning and Control (OAPC), 118, 136Optimization procedure, 127Orchestration, 298

Order entry, 279Order list items, 149Order optimizing, 139OTB check, 160OTB Planning, 112Outbound interface, 243

P

Payment transaction, 236PCI DSS, 239Perishables planning, 143Physical inventory, 197, 206Pick-handling unit, 189Picking, 189PI Content, 90PIPE, 79Planning scenarios, 108Planning tools, 74Point of sale, 226, 237POS client, 247, 254POS Integration, 91POS Manager, 253Price elasticity, 122Price image, 122Price management, 234Price planning workbench, 118Price reduction, 126, 128Price-shop report, 147Procurement optimization, 156Procurement strategy, 174Promotion management, 234Pull process, 135, 177Purchase order monitoring, 160Push process, 136, 177Putaway and picking strategies, 203Putting articles away, 185

Q

Quality management, 204Quantity optimizing, 140Quants, 205

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338

Index

R

Radio data transmission integration, 207Radio frequency handhelds, 248Reference article, 50Release procedure, 141Reorder point planning, 175Replenishable basics, 103Replenishment control, 204Replenishment parameter, 225Replenishment planning, 176Requirement quantity optimization, 224Requirements calculation, 224Requirements planning, 174Resource management, 208Retail method of accounting (RMA), 196Retail store, 234Return on investment (ROI), 141RFID, 207Risk management, 167

S

Sales audit, 244Sales channels, 232Sales data, 222, 227Sales figures, 80Sales history, 123Sales order, 262Sales promotion effectiveness, 125Sanctioned party list screening, 165SAP Auto-ID Enterprise, 208SAP Auto-ID Infrastructure, 208SAP Community Network, 312SAP Compliance Management, 164SAP Customs Management, 166SAP Demand Management, 129SAP Developer Network, 90SAP Electronic Compliance Reporting, 167SAP Event Management, 215SAP Event Manager, 160SAP Extended Warehouse Management, 201

SAP Forecasting and Replenishment, 219

F&R Processor, 228SAP Global Trade Services, 168SAP MAP, 104, 108, 119SAP Markdown Optimization, 126SAP NetWeaver BI, 72, 106SAP NetWeaver BI Accelerator, 78SAP NetWeaver Developer Studio, 308SAP NetWeaver MDM, 57, 62, 64, 92SAP NetWeaver PI, 84, 91SAP POS DM, 82, 244SAP Price Optimization, 122SAP Promotion Optimization, 125SAP Retail, 17SAP Risk Management, 167SAP Transportation Management, 214SAP Workforce Management, 270

ABAP component, 277Java component, 277

Scheduling, 150Scoring system, 156Seasonal goods, 103Seasonal procurement, 145, 161Self checkout, 241Semantics, 300Service, 240Service-oriented architecture (SOA), 297Shift planning, 270Shipping procedure, 166Single article, 47Site, 52

Category, 52Master Data, 52

Slotting, 206Slow seller management, 116Solution Map, 29Special forms of distribution, 182Split valuation, 195Spreadsheet, 107Stability criteria, 300Stable upgrade, 39Standard price procedure, 194Stock transfer, 188Storage Bins, 187

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339

Index

Storage Types, 187Store group, 98Store Manager, 247Store operations, 240Store planning, 96, 110Store server, 245, 251, 254Strategic planning, 94, 95Structured Article, 48Subsequent settlement, 153Suite of Business Intelligence tools, 74Supply chain lifecycle, 225Supply chain management, 171Supply source determination, 138Switch framework, 38

T

Tactical control, 224t-business, 18Time-phased planning, 175Time recording, 273Top-down planning, 99, 102Trade BI foundation, 120Transaction logs, 246Transfer posting, 188Transportation cross-docking, 203Two-step picking, 189

U

Usability of the article, 193

V

Valuating at cost price, 195Valuation at retail, 195Valuation procedure, 194Value-added services, 204Value chain, 28Value-Only Article, 49, 50Variations of perishables processing, 143Vendor evaluation, 156Vendor-managed inventory, 217Vendor Master Record, 53

W

Warehouse automation, 209Warehouse control units, 209Warehouse management monitor, 207Warehouse processing, 184Warehouse structure, 205Wave pick management, 204Web browser, 265Web channel analytics, 291Web channel platform, 292Web crawler enablement, 293Web shop, 280, 287

Y

Yard management, 202

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Sappress Sap for Retail

Documents

sap netweaver pi

supply chain analytics

sap netweaver bi

solution sap retail5

evaluated receipt settlement

sap netweaver mdm

system landscape directory

sap enterprise pos