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ECR Compliant Procurement Processes

ECR Compliant Procurement Processes. SAP Best Practices for Retail. Purpose, Benefits, and Key Process Steps Version 1 - Buyer-Managed Inventory. Purpose

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ECR Compliant Procurement Processes

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  1. ECR Compliant Procurement Processes SAP Best Practices for Retail

  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

  3. 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

  4. Required SAP Applications and Company Roles • Required SAP Applications • SAP SAP enhancement package 5 for SAP ERP 6.0 • Company Roles • Retail Purchaser • Manufacturer

  5. Process Flow Diagram ECR Compliant Procurement Processes - Buyer-Managed Inventory Retail Non-Seasonal Purchaser Create Purchase Order Purchase order confirmation DESADV Inbound processing ORDRSP Process delivery Inbound processing of Idoc DESADV Display incoming invoice Manufacturer Create Invoice Inbound processing of INVOIC Idoc Create Sales Order Retail Perishables Buyer Perform goods receipt with reference to shipping notice

  6. Process Flow Diagram ECR Compliant Procurement Processes - Vendor-Managed Inventory Retail Purchaser Outbound Idoc: ORDCHG Display Sales Order Transfer the stock data of the Retailer to the manufacturer Manufacturer Replenishment planning in the manufacturer system Inbound processing of Idoc ORDRSP Inbound processing of ORDSP

  7. 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.

  8. 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.

  9. Price catalog: PRICAT • PRICAT • Is 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 products • Notification of changes • Information relevant for all customers • Customer-specific information • Data supplied to a central article database

  10. BAPI/ALE Price catalog: Supply of a data pool Vendor Retailer Sender Recipient Data Poolf. e. Sinfos Generate of PriceCatalogue Idocs XI XI Inbound processing of PriceCatalogue Idoc Master Data

  11. 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

  12. 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)

  13. 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: preparation

  14. 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

  15. 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’

  16. 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)

  17. 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

  18. 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: assignment of EAN to unit of measure

  19. What can be updated: Basic data Texts BOMs (new) What cannot be updated: Characteristics Generic article/prepack BOM changes Conditions Material Price catalog inbound: updating to article

  20. Buyer managed inventory (BMI) For the more efficient communication between the retailer and the vendor, documents like purchase orders, order confirmations, delivery notifications and invoices are relayed electronically. 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 …).

  21. Scenario BMI: process flow

  22. Scenario BMI: process flow

  23. BMI: process flow Retailer Lieferant Manufacturer 1. Purchase order Filiale Verteilzentrum 2. PO confirmation 3. Shipping notif. 4. Invoice Store DC

  24. BMI: purchase order handling Retailer Manufacturer Generation of IDoc Create Purchase Order Create Sales Order ORDERS Check PO confirmation Generate PO confirmation ORDRSP

  25. BMI: goods processing Retailer Manufacturer EDI-Interface Shipping notification Create Deliveries DESADV Post goods receipt Articles to Retailer

  26. BMI: payment transactions Retailer Manufacturer Generation of IDoc Verify and post invoice Invoicing INVOIC

  27. BMI: conclusion

  28. 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.

  29. VMI: process flow

  30. VMI: transfer of stock data Stock Data • Retailer • Sends stock and sales data at a regular basis to the manufacturer • Manufacturer • Maintains stock data of his products at the retailer site • Tracks sales history

  31. VMI: transfer of stock and sales data Retailer Manufacturer Generation of IDoc Actual Sales data will be updated in the information structure S130 Sending of stock and sales data PROACT Stock data will be written in the table WRPT

  32. VMI: sending stock and sales data to the manufacturer • Done by report for selected supplier and stores • interactiv or in batch processing • Generation of IDoc PROACT • Article and data selection is controlled by profiles in the vendor master • stock and on-order quantity • sales history

  33. VMI: planning of replenishement Order Response • Manufacturer • calculates replenishment requirements • generates sales order

  34. VMI: planning of replenishment Retailer Manufacturer Generation of IDoc Via replenishmentPlanning a customer order will be created Purchase order will be created ORDRSP

  35. VMI: Planning of replenishment Order changes • Manufacturer • updates sales order with PO number from retailer system

  36. VMI: planning of replenishment Retailer Manufacturer Generation of IDoc Purchase order number from the retailer will be insert into the customer order Purchase order change notice will be created ORDCHG

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