Merchandising and supply chain solution from
IBM and SAP

Executive summary

The goal - Visibility to drive down costs and exceed consumer expectations

Consumer demands and market conditions are constantly shifting. Is your merchandising plan based on up-to-date, accurate customer and competitor data? Are your planning and sourcing processes fully integrated with logistics and delivery? Insights, integration and collaboration across your merchandising and supply chain ecosystem can help your company ultimately drive down inventory levels and the cost associated with placing the right products on the shelf to meet customer demand.

The advantage - Keep stock of your inventory and keep your customers

IBM and SAP have joined forces to deliver a portfolio of merchandising and supply chain solutions designed to maximize your merchandise and brand proposition. Our solutions enable your retail company to base planning on near real-time, consumer demand data and execute with a high degree of flexibility and responsiveness to dynamic changes in supply and demand. Our portfolio of solutions supports the core enterprise business processes and helps your retail company optimize inventory, revenue and customer loyalty.

  • Enhance buying, sourcing, suppliers, inventory levels, margin control and overall item management by optimizing core merchandising and supply chain decisions.
  • Improve merchandise, assortment and space planning by planning and executing buying decisions with an aggregated view down to the shelf and in response to customer demand and trends.
  • Optimize supply chain planning, forecasting and replenishment by using consumer demand data to provide an integrated set of order forecasts and stock movement requests which help you to get products from your supplier or distribution center to the shelf at the right time.
  • Ensure transportation, warehousing, picking and the physical movement of stock are done as efficiently and accurately as possible to meet the needs of the customer at minimum additional cost to you.
  • Drive sales and profitability as well as meet customer demand with full lifecycle price, and markdown management.


The benefits - Why IBM and SAP?

One of the longest standing global alliances, IBM and SAP bring together the full spectrum of best-practices offerings, research and industry experience. Together we've pooled our knowledge of the retail industry to offer a comprehensive solution to help retailers innovate and achieve success. We can help you drive enterprise transformation from strategy and design, through systems design and implementation to full lifecycle management.

The IBM and SAP solution for retail builds on more than 30 years of leadership, continuous collaboration, innovation and service to our joint clients. Our modular, relationship-based business framework is designed to deliver the highest levels of connectivity, control, integration and collaboration at every link in your value chain from employees to suppliers to customers.

More than 8,000 enterprises can attest to our capabilities, which have been put to the test in over 10,000 successful installations thus far, including at IBM, where nearly 30,000 users employ SAP applications.

We have more than 700 joint SAP supply chain management implementations around the world, across the public and private sectors. IBM and SAP helped Indigo, a Canadian book retailer replace its core legacy systems to facilitate a single, consistent solution for business process management. The company now has:

  • The ability to reallocate processing resources to manage seasonal peaks.
  • Real-time access to accurate sales information.
  • An annual reduction of more than C$150,000 in operational IT costs.
  • Improved integration between online and bricks-and-mortar operations.

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Business view

The goal - Product. Placement. Price. Promotion.

Meet the expectations of your customers by providing the right product in the right place at the right price to meet demand. Leverage up-to-date integrated consumer data collaboratively with your suppliers to enable real-time planning down to the store level. IBM builds upon the SAP for Retail set of solutions with a portfolio of merchandising solutions to help your retail company develop a dynamic, integrated and collaborative value chain that can sense changes in customer demand and respond throughout the value chain.

The advantage - Why IBM and SAP?

For almost 30 years, IBM and SAP have been global alliance partners. Together, we deliver a compelling and comprehensive value proposition and a set of solutions and services that can help you enable business strategy, achieve visibility and connectivity throughout the enterprise, optimize operations, and protect current and future IT investments. Between the two companies, you have at your resource intellectual capital and best-practice offerings from two of the leading retail services providers in the industry.

  • IBM has 30 years of experience in the retail industry, allowing you to leverage the experience of 4,400 consultants dedicated to consumer-focused industries.
  • IBM Global Services has the world's largest practice dedicated to implementing, running and maintaining SAP solutions.
  • IBM servers and storage products, the world's leading database, plus a comprehensive software offering offer a robust, carefully aligned infrastructure for your retail operations.
  • IBM Global Financing offers flexible financing options.
  • SAP employs more than 34,000 people in more than 50 countries and is one of the world's largest independent software suppliers.


The benefits - Reduce inventory levels with better planning and sourcing

Transform inflexible, inaccurate, unresponsive merchandising and supply chain processes by leveraging real-time customer and supplier data across the entire value chain. The merchandising and supply chain solution from IBM and SAP can help create a superior customer experience and increase loyalty, while improving operating costs and gross margins.

Our solution is designed to help planning based on real-time collaborative data throughout the supply chain.

  • Meet consumer needs and differentiate your brand from the competition with the best product selection and a unique brand proposition.
  • Help ensure that there is sufficient inventory held in your distribution network to fulfill customer demand and promotional activity.
  • Store and ship the product in the most cost-effective manner, while maintaining good service levels, and without carrying excess inventory.
  • Commission, operate and manage distribution centers and transport fleets cost-effectively.
  • Provide product availability and optimized inventory levels to minimize waste.
  • Display products in the correct place in the store, with the right price labels and advertising materials.
  • Help ensure that you always have enough stock to meet consumer demand.


The approach - Fossil works with IBM and SAP to achieve success

Fossil, Inc. wanted technology partners that were financially strong and strategically committed to its business needs in order to avoid the headaches associated with making a migration to another system in two or three years' time. Fossil choose IBM and SAP. With the new, integrated SAP system, Fossil has achieved:

  • A consolidated view of global sales across complex organizational and channel structure.
  • A clear view of total inventory throughout extended supply chain.
  • A lower cost of management for solution, high flexibility and scalability.
  • The potential to accelerate time-to-market for new products, for better customer service and reduced inventory.


The financial advantage - Cut cost, improve revenue and boost customer loyalty

Stay competitive and grow profitably by responding to market changes more quickly and realizing the financial advantages of optimized merchandising and supply chain capabilities. We can help you:

  • Ensure higher product availability in the store while reducing overall inventory levels.
  • Reduce the cost of sourcing, warehousing and transporting merchandise.
  • Increase revenues by delivering the right products to the right channel through improved forecasting and demand intelligence.
  • Improve margins through initial price optimization and reduced markdown activity.

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Technical details

The issues - The evolution of your supply chain infrastructure

Integrate your value chain with a flexible and responsive merchandising and supply chain infrastructure. High-performance, standards-based platforms combined with sophisticated management software can help retail IT organizations make the transition from complex, resource-intensive, localized or isolated infrastructures to integrated and streamlined IT architectures.

The benchmark - Innovate. Operate. Differentiate.

IBM offers a variety of IT services and capabilities to help your company realize value from your current and future ERP investments. By employing IBM Full Economy Model for SAP, our professionals can assist you in redesigning and enhancing your IT environment using a holistic and comprehensive approach.

Our consultants, supported by a network of IBM and SAP global solution centers, provide a reservoir of extensive industry knowledge and a proven approach to helping companies and institutions resolve complex business challenges of implementing, operating, maintaining and optimizing your investment in SAP. We offer:
  • More than 175,000 highly trained consultants ready to assist your company in streamlining your implementation of SAP Business Suite solutions.
  • Application management services and on demand hosting services for any SAP portfolio, plus SAP education and training.
  • More than 60,000 business consulting specialists (including 10,000 SAP professionals) in over 160 countries-making it the world's largest consulting services organization and the largest SAP practice.


The components - Fit-for-purpose strategy for merchandising and supply chain

Our solution is designed to fit your need with a combination of IBM and SAP applications and solutions.

  • The SAP for Retail set of solutions is designed specifically for the new retail environment, covering key business processes from forecasting and planning to allocation and replenishment.
  • IBM Dynamic Infrastructure for SAP Business Suite is designed to allow businesses to build an IT architecture that quickly adapts to business changes by provisioning and removing servers as needed, extending the value of SAP software investments.
  • The IBM WebSphere® family offers a flexible integration and application platform to meet a diverse range of requirements. Capabilities include business portals, business process management and integration, product information management, mobile computing, and application servers, and are designed to fully interoperate with SAP NetWeaver®.
  • IBM DB2® Universal Database™ includes features specifically optimized for the SAP environment. These new features help simplify administration, minimize configuration and installation, and improve overall performance for SAP solutions.
  • IBM Systems, with their diverse, multiplatform capabilities, offers the extraordinary flexibility required by end-to-end SAP implementation solutions.
  • IBM System Storage solutions are based on open standards, and encompass an array of integrated products and services that include tape, disk, SAN (storage area networking), NAS gateway and management software.
  • IBM's business consulting and systems integration services enable our customers to deploy new strategic business processes and SAP functions more quickly. We offer a broad range of services to span the complete SAP lifecycle, including:
    • Strategy
    • Business case
    • Project management
    • Business process design
    • Business transform ation
    • Application design and architecture
    • Infrastructure
    • Data migration
    • Integration
    • Testing
    • Hosting
    • Training
    • Application maintenance

The implementation - Fossil works with IBM and SAP to achieve success

Fossil, Inc. selected IBM AIX® on IBM System p. The logical partitioning enabled Fossil to buy fewer physical servers initially, saving cost and footprint. Fossil implemented all of its SAP software applications on three IBM System p model 670 servers and one p690 server with the IBM DB2 database software managing the data. These physical servers are divided into more than 30 logical servers, and Fossil is able to allocate processor and memory resources between the environments exactly as required, rapidly and cost-effectively.

The solution helped Fossil meet several IT challenges by allowing the company to:

  • Integrate processes across different geographies and customer groups.
  • Create a scalable, flexible centralized IT service.
  • Gain a consolidated view of global operations at high speed.


The cost of ownership - The financial impact

Working with IBM and SAP, your retail organization has the opportunity to significantly improve cost of ownership. We can help you:

  • Accelerate and reduce costs of implementation through use of predefined SAP solutions and industry templates.
  • Achieve economies of scale through business process outsourcing of commodity business aspects.
  • Reduce administrative staff by utilizing IBM standardized SAP technical project management delivered by IBM's AMS division or IBM off-shore capabilities.
  • Achieve first-class hardware performance.

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Questions? Contact an IBM-SAP specialist.