This blog series will take an in-depth look at the capabilities of SAP S/4HANA for Fashion and the significant role it plays in executing seamless and frictionless order orchestration and fulfillment for fashion companies.
Visibility into item availability on any shelf in any channel is a dream that many retailers have been chasing. As majority of retailers still grapple with achieving real-time inventory visibility, we’re already seeing retail leaders move one step further by offering multiple order fulfillment services including “buy online, pick up in-store” (BOPIS) and “buy online, return in store” (BORIS).
As profitable order management becomes critical to a fashion business, it becomes paramount to overcome challenges that arise from inefficient and disconnected processes – which heavily impacts profit margins and customer experiences to a degree that no retailer can afford.
Let us have a closer look at how SAP S/4HANA 1709 for Fashion empowers retailers to deliver what their customers want quickly, efficiently, and at the lowest possible cost - for both the fashion retailer and the customer.
1. Global Inventory Visibility
A major key to order management is real time inventory visibility - which is undoubtedly the hardest to achieve. Being able to know where inventory is located and what the best fulfillment source to allocate from is paramount to fulfilling orders.
When integrated with SAP Customer Activity Repository, SAP S/4HANA for Fashion delivers real-time inventory visibility from across the enterprise, unifying data from different systems, including: point of sale, e-commerce, and any other system that tracks inventory levels.
SAP S/4HANA for Fashion leverages advances in technology to deliver a solution that helps fashion businesses with multiple sales channels to act as one – combining wholesale, retail and manufacturing businesses.
As progressive retailers begin to use omnichannel selling as a strategic advantage, SAP S/4HANA Fashion delivers an infrastructure that connects all selling channels to retrieve stock levels in real-time and drive profitable outcomes. For example, if fashion retailers have inventory in a particular store that is performing poorly against their sales plan, they can leverage a single view of inventory to locate and transfer these stock in order to sell them in another store or sales channel.
Sales Associate Empowerment via In-store Kiosk with SAP S/4HANA Fashion: Leveraging a single pool of inventory, fashion companies can provide inventory availability to sales associates. This way, in instances of OOS, associates are able view item avaliability at nearby stores and source intelligently from another store to fulfill in-store customer orders for out-of-stock products.
Click and Collect with SAP S/4HANA Fashion: Fashion companies can extend real-time inventory availability to customers. For instance, customers checking a fashion retailer’s website can determine the availability online and, the quantity available of an item in-store. Customers are also able view item availability and opt for "click and collect" service by choosing their preferred store.
By leveraging the fashion ERP solution, fashion companies are able to manage orders more efficiently and allocate constrained inventory to multiple channels according to defined business rules. This way, inventory can be reserved and promised during the processing of customer orders, enabling brands to fulfill demand for their products from anywhere, reducing stock-outs and missed revenue opportunities.
Related Reading: Order Fulfillment with SAP S/4HANA for Fashion
Explore real-world business scenarios and learn how SAP S/4HANA for Fashion helps fashion brands deliver multiple order fulfillment services to empower their consumers to buy, collect and return – anywhere, anytime. See how.
2. Order Fullfilment Logic Built for Optimal Inventory Management and Stock Protection
Together with the SAP Customer Activity Repository (CAR), SAP S/4HANA for Fashion helps optimize every phase of the fulfillment processes with powerful logic to ensure that every order is fulfilled from the most efficient locations – including Endless Aisle orders placed within and from stores – to meet customer expectations.
However, gaining a single view of inventory availability is just the beginning. The next step: optimal inventory management and stock protection. For example, at the beginning of the season, a retailer may want to maintain maximum in-store inventory levels. If business rules are not in place, especially in a click and collect or ship from store situation and the last item of a particular style in-store has just been shipped out, the chances for in-store customer dissatisfaction are high. For this case, business rules can be used to optimize order fulfillment directly from the nearest distribution center instead of the store. Because this rule fulfills most items from the DC, in-store inventory is kept for the in-store shoppers.
Order Online - Ship to Customer (inventory is sourced from DC or Store ) : In instances of consumer direct transactions, fashion companies can set parameters that regulate where the order is sourced from - regardless of whether its from stores or DCs. The best location is selected based on cost, logistics, distance, etc.
In SAP S/4HANA 1709, stock is maintained under a common pool, separated and prioritized through segmentation. Segmentation helps distinguish demand and supply by “Logical Segmentation”: e.g. by channel or market or “Physical Segmentation”: e.g. by quality or country of origin.
This allows for omni-channel fashion companies when desired, the flexibility of enabling cross-consumption among channels. For example, segmentation strategies can be defined to permit retail demand to consume supply reserved for retail channels, and if insufficient, consume supply reserved for another channel (wholesale/e-commerce). In the below example: If requirements from the retail channel are to be given priority, the rule would allow fulfillment from all three stock segments in a sequential order. Other channels in this example would not be able to consume stock assigned to the Retail channel – its stock would be ‘protected’.
*Functionality shown above (cross-consumption on squential order) will be available on future releases.
Meeting Tomorrow’s Demand with SAP S/4HANA for Fashion
The selected use cases above related to SAP S/4HANA Release 1709 are designed to depict and visualize the value of S/4HANA Fashion ERP solution, and its possibilities when connected to a fashion company's extended IT ecosystem - including POS, e-commerce and CRM.
Our blog series will continue to concentrate of several use cases and delve deeper into topics such as omni-channel returns, endless aisles, store as a fulfillment center and fulfilling OOS products. The idea is to showcase how building an intelligent ERP suite helps deliver visibility and a seamless experience across all channels.