The IBM and Oracle Retail Solution

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1 The IBM and Oracle Retail Solution

2 Today s Discussion The Challenges for China Retailers IBM Oracle Retail Implementations Review IBM and Oracle Engagements Daphne Better Life Sanfu Sinopharm 2

3 China retailers are faced with unprecedented challenges Key Issues Competition from multiple channels and formats Weaker economy customers spending less or shifting to value retailers Lower cost operating models expanding categories and brands; taking share Foreign competition coming in and taking market share Out of stocks / over-stocks Technology and infrastructure Shifting from a Wholesale model to a Retail model Business Imperatives Clear understanding of customer needs and wants Compelling and differentiated brand experience Satisfying shopping experience Differentiated merchandise offering Compelling, profitable promotions In-stock when and where the customer wants it Pricing optimized throughout product lifecycle Cost containment High performance, disciplined organization Implement enabling technologies IBM and Oracle are jointly working to resolve China s retail challenges 3 3

4 Leading China retailers are moving toward an Integrated Customer Centric Merchandising Operating Model Location Clustering Macro Assortment Planning Inventory Flow & Network Design Micro Assortment Planning Planning Supply Chain Planning Advertising/ Promotion Event Planning Web and Print Page Planning Merchandise Financial Planning (MFP) Strategic Direction Floor & Shelf Space Planning Product Design & Development Demand Forecasting Data and Attribute Lifecycle Price CUSTOMER Customer Order Performance Analysis Sourcing & Import Logistics Transportation & Logistics Execution Replenishment Distribution / Warehouse Purchase Order Allocation 4 IBM and Oracle are helping to balance strategic goals and operational capabilities to maximize targeted customer demand

5 Today s Discussion The Challenges for China Retailers IBM Oracle Retail Implementations Review IBM and Oracle Engagements Daphne Better Life Sanfu Sinopharm 5

6 IBM Oracle Retail Implementations Across China and the globe, IBM has deep, relevant Oracle experience in the Retail industry. The following illustrates our Oracle Retail engagements where IBM has been responsible for the overall integration. All of these programs demonstrate our ability to leverage our resources to transform business processes in conjunction with an Oracle Retail implementation. 6

7 Today s Discussion The Challenges for China Retailers IBM Oracle Retail Implementations Review IBM and Oracle Engagements Daphne Better Life Sanfu Sinopharm 7

8 Daphne s Strategic Transformation Daphne is the largest shoe and fashion retailer in China with over 7,000 stores Over the last three years Daphne and IBM have embarked on a business Transformation program that has consisted of the following three pillars Strategic Business Direction move from Wholesale to Retail Agile Supply Chain to cater for higher number of shorter seasons, and consumer demand/tastes Scalable IT Platform to facilitate the strategy and improved business decisions 8

9 The Daphne project Through the current project Oracle and IBM are leveraging technology to help Daphne realize potential extend supply chains coverage, build an intelligent retail supply chain, which starts from customer demand, ends at customer satisfaction, we are expecting at the end of the program, Daphne can be powered by a supply chain that is a value delivery chain rather than a stock flow chain Become customer centric Control of brand image Better control of inventory Maximize control of supply chain Better assortment strategy Better integration of multi-channel retailing Efficient Pricing strategy Higher ROI 9

10 The engine and enabler for change at Daphne IBM Global Business Services IBM Hardware Oracle Retail Merchandising Oracle Retail Planning Oracle E-Business Suite Oracle Hyperion Oracle Tech Stack 10

11 Better Life s Business Strategy and Objective-Become the Leading Multi0-Foremate Retail Strategy Operation IT Multi Format Approach National policy with local adaptation Network expansion, province expansion Building organization performance for competitive advantage Logistic network development Increased efficiency and effectiveness through standardization and leverage of redundancy and waste Persistent improve productivity and enhance retail capabilities across all operations New generation merchandising platform Unified buying, distribution &execution platform, streamline & standardize process Enable quicker and wiser daily business decision 11 Category n Sales and cost effective Assortment and Planogram n Effective execution n Win/Win platform with suppliers Buying & Supplier Combine centralize & regional buying and store ordering modes Flexible Supply Improve supplier service level by scorecard Logistic Efficiency n WMS cover all DCs n Reduce unnecessary human intervention n Fresh DCs to be consolidated to one site 2009 Accenture. All rights reserved. Fresh Leadership n On time ordering and receiving, keep fresh n Precise costing & variance monitoring n Inventory Control Promotion / Price n Promotion simulation & analysis n Centralized & Flexible pricing approach n Reduce markdown while increasing sales Allocation / Replenishment n Efficient replenishment n In store inventory control n Pull & push provided to suit specific item needs

12 Key Concerns to Address Supplier Funding for Markdown Markdown supplier funding calculation Financial Cost Tracking EBS Application, the Core Financial functionality in the legacy system had to be replaced Track Item ledger & Balance by supplier Concession Promotion Promotion life cycle management 12 Concession transaction data integrity with contract item Maximize reuse of packaged leading practices while satisfying local requirements This approach will help guide/facilitate deployment of common customer practices and reduce the level of customization by leveraging the packaged solution to its fullest and integration into Retail model.

13 How IBM and Oracle is helping with the vision Brand and Marketing Optimize Category Fresh Product IBM Global Business Services Oracle Retail Merchandising Oracle Retail Planning Oracle E-Business Suite Oracle Retail Analytics Oracle Tech Stack 13

14 Sanfu journey from Regional Department Store Sanfu needed to develop a Retail model to enhance customer experiences and optimize retail operations within the Sanfu retail locations. IBM assisted Sanfu in: Developing the future state IT infrastructure to meet growing customer demands Review and assess Sanfu s current state activities focusing on Customer Experience/Store Operations, Merchandise Planning and Merchandise Strategy Develop a retail model based on leading practices in the retail industry across functions in scope: - Store Operations - Customer Services - Merchandise - Merchandise Planning - Space Planning - Store Clustering - Pricing Implementing the Oracle Retail solutions to meet the strategic transformation 14

15 How IBM and Oracle are helping to drive the transformation Challenges Enable Sanfu to move to a centralized merchant organization Implement Merchandise planning Implement inventory management applications Enable sophisticated business intelligence Solution IBM Global Business Services Oracle Retail Merchandising Oracle Retail Planning Oracle Retail Analytics Oracle Tech Stack 15

16 SINOPHARM Holding Ltd. Sinopharm needed to implement an integrated corporate application architecture that included financials and merchandise management. Key to Sinopharm s growth was the ability to better manage their consolidated cash flow and to improve their supply chain. They a system that support moving to a more centralize manage merchandise but still allowing regional influences. They also needed more and information visibility and reporting. Additionally, improve standardization, support expansion, and core IT competency for rapid replication with low cost. The new Oracle Retail and Oracle EBS applications replaced silo ed legacy systems. The project also included implementing POS, warehouse management and a master data platform concurrently. Enhance quality management capabilities, improve governance capabilities of pharmaceutical industry regulations compliance Eliminate isolations among different regional systems, improve system stability and scalability. Enable central control, with local adaptations. Establish a platform supporting multi-format business model, and cooperation between different formats. Improve consistency between merchandise system data and financial data, and on-timing data transfer. Unified accounting rules, fulfill seamless integration of business and financial system. Build a comprehensive reporting system for decision making. 16

17 How IBM and Oracle are helping to drive the transformation Challenges Multiple business modes for purchasing, distribution and settlement Strong Regional influence Complex retail pricing system Pharmaceutical Industry Governance and Regulations Compliance Solution IBM Global Business Services Oracle EBS Financial Oracle Retail Merchandising Oracle Retail Price Retail Invoice Matching Retail Sales Audit Allocation Retail Integration Bus 17

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