Merchandise Distribution. SAP Best Practices for Retail

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1 Merchandise Distribution SAP Best Practices for Retail

2 Purpose, Benefits, and Key Process Steps Purpose This scope item describes how to distribute trading goods via the distribution center (DC). The distribution center is a warehouse that is supplied by vendors, that uses efficient distribution methods to move merchandise through the warehouse without it being put away temporarily and then prepares it to be shipped to customers or stores. Benefits This scope item should be viewed simply as an example for implementation purposes. However, with very little effort, this example can be adapted to fit any customer-specific situation. Key Process Steps Distribution Planning Collective Purchase Order (Pull) Distribution Processing for Stock Placement and for Cross-Docking Flow-Through Recipient-Driven Distribution 2014 SAP SE or an SAP affiliate company. All rights reserved. 2

3 Required SAP Applications and Company Roles Required SAP Applications SAP Enhancement Package 7 for SAP ERP 6.0 Company Roles Retail Seasonal Purchaser Retail Non Seasonal Purchaser Purchaser Retail Perishables Buyer Retail Warehouse Manager 2014 SAP SE or an SAP affiliate company. All rights reserved. 3

4 Retail Non- Seasonal Purchaser Retail Seasonal Purchaser Retail Nonseasonal Purchase r Purchaser Retail Non- Seasonal Purchaser Process Flow Diagram Merchandise Distribution - Planning Alternative 1: Create a Purchase Order Allocation Table (PUSH) Alternative 2: Create a Contract Goods Receipt in the DC Create collective PO Creating an Allocation Rule Alt 1: With reference to PO (optional) Alt 2 With reference to contract (optional) Alt 3: Without reference to Procurement document (optional) Reply from stores Creating followon documents to the allocation table Goods Receipt in the DC Collective PO (PULL) Creating stock transfer order 2014 SAP SE or an SAP affiliate company. All rights reserved. 4

5 Retail Warehouse Manager Retail Perishables Buyer Process Flow Diagram Merchandise Distribution - Processing Alternative 1: Stock Placement Alternative 2: Cross-docking Adjust distribution & generate an outbound delivery Alternative 3: Flow-through recipient-driven distribution Displaying distribution (optional) Alternative 4: Flow-through merchandisedriven distribution Adjust distribution Generate outbound delivery Create distribution order Confirm distribution order Picking Post goods issue Post goods issue 2014 SAP SE or an SAP affiliate company. All rights reserved. 5

6 Merchandise Distribution Planning Phase Pull: Collective Ordering of Aggregated Quantities Collective Purchase Order with Vendor Purchasing Push: Centralised Allocation of Total Order Quantity Allocation Table + Purchase Order Delivery Storage Distribution Center Cross-Docking Flow- Through Delivery Store Order Sales Order Recipient Allocation Notification 2014 SAP SE or an SAP affiliate company. All rights reserved. 6

7 Allocation Rule: Assignment to Allocation Table Alloc. Table 23 Article T-Shirt Site Group North Total Planned Quantity 120 Pc Allocation Rule 99 Store A Store B Store C 30 Pc 30 Pc 60 Pc Assignment of Allocation Rule in Allocation Table Search Function: Find Allocation Rule via Site Group and Merch.Cat. / Article View / Change Generate RIS Alloc. Rule 99 Plan- oder Statistikdaten for Site Group North Merch. Category T-Shirts Store Quota Store A 1 Store B 1 Store C SAP SE or an SAP affiliate company. All rights reserved. 7

8 Merchandise Distribution Execution Phase Distribution Zone Recipient 1 Cross-Docking Merchandise is Received Prepacked for Specific Recipients or Recipient 2 Flow-Through Anlieferung des Gesamtbedarfs Total Quantity of Needed Merchandise is Received Recipient 3 Goods Receipt Goods Issue 2014 SAP SE or an SAP affiliate company. All rights reserved. 8

9 Merchandise Distribution Distribution Methods Flow-Through, article-driven The complete quantity of one received article is distributed to all recipients. Afterwards the next article is processed. Flow-Through, recipient-driven The complete delivery for a single recipient is picked from all received articles. Afterwards the next recipient is processed. Cross-Docking The received units are already pre-packed for a specific recipient. They Are just moved through the distribution area SAP SE or an SAP affiliate company. All rights reserved. 9

10 Processes of the Planning Phase 2014 SAP SE or an SAP affiliate company. All rights reserved. 10

11 Processes of the Execution Phase 2014 SAP SE or an SAP affiliate company. All rights reserved. 11

12 2014 SAP SE or an SAP affiliate company. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an SAP affiliate company. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries. Please see for additional trademark information and notices. Some software products marketed by SAP SE and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP SE or its affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP SE or SAP affiliate company products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP SE s or its affiliated companies strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions SAP SE or an SAP affiliate company. All rights reserved. 12