Implementation of International Best Practices in Retail Fashion

MODIS

November 6, 2014

Konstantin Semikin

Moscow, Russia

MODIS – leading russian fashion brand

MODIS – это первая российская национальная монобрендовая сеть магазинов модной одежды для всей семьи. В настоящий момент сеть насчитывает более 125 магазинов в 65 городах России.

Сеть MODIS привлекательна для широкого класса постоянных покупателей: в каждом шестом магазине сети количество посетителей превышает 1 млн чел в год

КРАТКАЯ СПРАВКА О КОМПАНИИ

Бизнес – схема MODIS - EDLP (every day low price – каждый день низкие цены): • низкие цены на регулярной

основе; • отказ от агрессивных

распродаж; • ценообразование на основе

мониторинга цен конкурентов;

• широкий ассортимент.

• Оптимальная площадь 1500 м2

• Высокий трафик – 60 100 посетителей в среднем в месяц на один магазин

• Большая пропускная способность кассовых узлов (до 12 касс на 1 магазин). Большое кол-во комфортных примерочных (до 15 шт. на 1 магазин)

• Понятная и удобная внутренняя навигация для покупателей

• Современный дизайн

• Детская зона и зона отдыха

МАГАЗИН | Формат

МАГАЗИН | Современный дизайн: лаконичный и модный

География присутствия и план развития

• Федеральный охват – свыше 125 магазинов в 65 городах. В 2014 году количество магазинов превысит 140

• Общая площадь магазинов – в 2014 году достигнет 170 000 м2. Средняя площадь магазина составляет 1 200 м2

Общее население в городах, где представлен МОДИС – более 48 млн. человек, в том числе:

• 15 городов – 1 млн.+

• 15 городов – 500 тыс. +

• 28 городов – 200 тыс.+

• 9 городов – 100 тыс.+

Modis: SAP Fashionworks Project

REASONS FOR CHANGE

• System cannot satisfy business needs in 2012

• System not scalable for growth in established strategic plans – Reached threshold in terms of integration

– No real reporting capabilities

– Not maintainable or upgradeable

• Platform technologically old

WHY BIRCHMAN

• Long experience in Fashion Retail

• Class-A references in the industry

• Reference visits with Fashionworks solution

• High quality consultants (experienced)

7 Weeks assessment on MODIS business processes

Implementation plan for standard scalable

SAP Retail Fashion solution

BIRCHMAN INTRODUCTION

SERVICES

Managed Services 30%

Solution Delivery 50%

Consulting

20% • Application Management

and Operations. • Technical Operations and

Infrastructure.

• Business strategy. • IT Strategy. • Architecture.

• Business processes and systems environment.

• Systems Development and Integration.

INDUSTRIES

Public

Administration 4%

Health 12%

Services &

telco 10%

Transportation &

logistics 15%

Retail & Fashion

25%

EMPLOYEES

130 160 210 290 350 420 450

2007 2008 2009 2010 2011 2012

GEOGRAPHICAL PRESENCE

UK London / Glasgow

Spain Madrid / Barcelona

Chile Santiago

Australia Sydney / Perth / Brisbane

Costa Rica Saint Jose

United Arab Emirates Dubai

Portugal Lisbon

South Africa Johannesburg

Dominican Rep. Santo Domingo

Industry

18%

2013

Russia Moscow

Banking &

Insurance 16%

+100 Fashion&

Retail

BIRCHMAN FASHIONWORKS

BIRCHMAN INTRODUCTION

Project Goals – Solid Foundation for Future Growth

• Efficient business processes – eliminate a lot of manual work • Improved (new) POS system seamlessly integrated with ERP • Improved (automated) integration with WMS systems • Improved FI/CO/FM closing and reporting • New BI (BW) for management and other reporting and analyses • Reliable and scalable IT infrastructure • Solid internal IT-SAP-POS team built • Solid external consultants willing to cooperate long-term • Organization ready to accept further SCM/Retail improvements

POS terminals – 800+

POS Servers in Stores - 129

SAP and BW end users – 400 + WPOM portal 200 – Total 600+

Virtal infrastructureVirtual infrastructure

SAP ERPSAP BW

POS DM MAPMODIS

DW solution

Process Integration

Central POS

QlikView

ELO, Other

MODIS SYSTEMS LANDSCAPE – KEY COMPONENTS

Servers

Storage

SAP Fashionworks for Modis - what is implemented/built

Key modules implemented:

1) SAP Retail – ERP solution using Birchman Fashionworks methodology/best practice

2) SAP Process Integration (PI) as integration hub for all applications

3) Business Warehouse as Modis data warehouse platform with Bex front end

4) POS DM central application/repository for sales (POS) data

5) Integration of POS DM with SAP Retail

6) SAP Landscape (dev, q&a, prod) with 10+ running instances

SAP Fashionworks for Modis – key business processes

Business processes:

1) Masted Data management – standard and extended tools (WMDM portal)

2) Purchasing with WPOM portal for vendor operations

3) Import logistics (with HUB, no HUB) with SAP transport/shipment module

4) Distribution center operations with integration with external logistics operators (ShareLand) and transport organizations

5) Distribution and Replenishment

6) In store SAP operations (goods, cash)

7) POS integration into new SAP infrastructure

8) Finance (General Ledger, Payment)

9) Controlling (new cost center hierarchy, new processes with interlan orders)

SAP Fashionworks for Modis – key business processes

Key figures:

• 1 Night go-live, no sales fall

• SAP: 700+ end users in the system

• POS: 129 stores (servers), central POS server, 900+ POS terminals

• WPOM vendor users: 200+

• Materials (articles, SKUs): 300.000, Stock: 4.000.000 items in stores

SAP Fashionworks for Modis – next steps

Next project activities immediate:

1. Finish migration until mid of May (with finance/controlling first month reporting from new system)

2. Migrate to new UKM POS (promotions, other improvements)

3. Category Management calculation of CPI, SPI, DP and other reporting

The following projects – extend functionality of new solution:

1) MAP implementation

2) Replace Bex and QlikView with SAP Business Objects front end

3) Implement CO-PA (profitability analysis)

4) Implement CRM

5) Upgrade of virtual infrastructure and backup system

Modis: Applications and Infrastruture Landscape

Applications landscape

Core IT Infrastructure in M1 datacenter

Compute resources (5 hosts/servers) Disk storage resources

HP 3PAR HP EVA

Core networking (SAN/LAN Switches)

VMware vSphere Virtual infrastructure with centralized management and monitoring

H1 H2 H3 H4 H5 D2D Backup

Disaster Recovery Datacenter for Core Business Services

(applications)

VMware SRM (DR extension)

TEST

SAP Retail ERP Landscape

DEV

PRODDB+CI

APP1

APP2

TESTDEV PROD

Datawarehouse Landscape (SAP BW)

New POSPOS Srv

POS Landscape BI (BO) Server

PI Server

Other Virtual Servers –

Exchange, AD, File/Print,

SharePoint...)1CHANA Phase 1HANA Ph2

POSDM CRM

Modis applications and virtual infrastructure landscape

Existing

Project in progress

MAP

HANA Appliances

Application and Process View

Modis: SAP MAP Implementation Challenge

Demand planning – structure and requirements

Strategic Planning Sales Budget at Sales org., distribution channel, brand and country

Sales Budget

Breakdown at division, agent, customer and product class

Merchandise Planning

Breakdown at division, product class and prod. group

Store Planning

Forecast

Calculate forecast from actual sales Options

Planning

Plan number of options per store cluster

Purchase Planning

Evaluate global demand (wholesale and retail) and release quantities to create purchase orders

Assortment Planning

Country Manager

Wholesale Manager

Retail Manager

Retail Product Manager

Sales Agent

Purchase Manager

Breakdown at store, division and product class

Plan quantities at SKU level per store cluster

TOP-DOWN PLANNING STRATEGY

Design, sales and purch.

Capsule Definition

Decide capsule configuration and deliv. dates

Board of directors

Fashionworks has a Merchandise and Assortment Plan solution for the Retail Fashion business that has evolved to a more flexible environment, SAP IP, conserving its integration quality with the transactional system.

Planning for retail overview – real time requirements

Strategic Planning

Merchandise Planning

Store Planning Assortment Planning

Capacity Planning

OTB

End of season

Promotions

Markdown planning. Replenishment

Purchasing

Update OTB

PLANNING

In Season

Pre Season

Store replenishment – real time and reliable forecast

Forecast flow

•Manual selection

•Automatic system selection

Define Forecast model

•Specify model parameters

Model Initialization •Stock withdrawn from the

warehouse

•Enter manually or interface

•Reference material consumption

•Alternative historical data (AHD)

Creating historical data

•Calculated by the system

•Enter manually

Create forecast values

SAP NetWeaver BW - New Architectural Paradigm

SAP NetWeaver BW

Data Modeling

HANA

Data Management

Data Storage

Analytical / Planning Engine

DBMS

SAP NetWeaver BW

Data Modeling

Analytical / Planning Engine

Relational Database

Data Management

Data Storage

SAP HANA Platform for Real Time Business

Modis „Big Data“

RETAIL co. - POS - volume of

transactions

Volume of sales 2.500.000.000 $

Avg sale amt 25 $

Avg no of items 3 8$ per

item

No of receipts/invoices 100.000.000 per

year

No of recpt lines 300.000.000 per

year

data warehouse 5 years recpt history 500.000.000

recpt lines 5 year 1.500.000.000

No of SKU 25.000

% of new SKU per year 40%

no of new SKU 10.000

SKU total 65.000

no of recpts/day (300 working days) 333.333

no of SKU/day 1.000.000

no of trans/sec (12 hours working day) 8

no of stores 400

no of billed customers per store per day 833 ?!

data volume (dw no compression)

dimension keys:

store 4

datetime 8

sku 18

tt 2

payment type 2

consumer type 4

repeating cust. 4

sku group 2

sku type 2

sku number 2

sku design/color 2

store region 2

uom 2

discount type 2

measures:

qty 8

price 8

cogs 8

discount 8

hard currency val 8

total bytes 96 ~100

Expected value (bytes) 100

fact table size (bytes) 150.000.000.0

00

B

fact table size (GB) 150 GB

Big Data Bundles for Retail from SAP

Information Management & Real-Time Data Movement

Transactional Data

Management

In-Memory Data

Management

Analytics EDW Data

Management

Mobile Data Management

Co

mm

on

Des

ign

&

Mo

del

ling

Envi

ron

men

t C

om

mo

n Lan

dscap

e En

viron

men

t

Open APIs and Protocols

SAP real time data platform

Federated Access

SAP Predictive Analysis

SAP Visual Intelligence

R, SAS, SPSS, etc. BusinessObjects BI Suite

3rd party, open source

analytic tools

The Future of Modis: HANA + Hadoop Enriching Retail POS with Customer Product Interest