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Implementation of InternationalBest Practices in Retail FashionMODISNovember 6, 2014Konstantin SemikinMoscow, Russia

MODIS – leading russian fashion brand

КРАТКАЯ СПРАВКА О КОМПАНИИMODIS – это первая российская национальная монобрендовая сеть магазинов моднойодежды для всей семьи. В настоящий момент сеть насчитывает более 125 магазинов в 65городах России.Сеть MODIS привлекательна для широкого класса постоянных покупателей: в каждомшестом магазине сети количество посетителей превышает 1 млн чел в годБизнес – схема MODIS - EDLP(every day low price – каждыйдень низкие цены): низкие цены на регулярнойоснове; отказ от агрессивныхраспродаж; ценообразование на основемониторинга ценконкурентов; широкий ассортимент.

МАГАЗИН Формат Оптимальная площадь 1500 м2 Высокий трафик – 60 100посетителей в среднем в месяцна один магазин Большая пропускнаяспособность кассовых узлов (до12 касс на 1 магазин). Большоекол-во комфортныхпримерочных (до 15 шт. на 1магазин) Понятная и удобная внутренняянавигация для покупателей Современный дизайн Детская зона и зона отдыха

МАГАЗИН Современный дизайн: лаконичный и модный

География присутствия и план развитияОбщее население в городах, где представленМОДИС – более 48 млн. человек, в том числе: 15 городов – 1 млн. 15 городов – 500 тыс. 28 городов – 200 тыс. 9 городов – 100 тыс. Федеральный охват – свыше 125магазинов в 65 городах. В 2014 годуколичество магазинов превысит 140 Общая площадь магазинов – в 2014 годудостигнет 170 000 м2. Средняя площадьмагазина составляет 1 200 м2

Modis: SAP Fashionworks Project

REASONS FOR CHANGE System cannot satisfy business needs in 2012 System not scalable for growth in establishedstrategic plans– Reached threshold in terms of integration– No real reporting capabilities– Not maintainable or upgradeable Platform technologically old

WHY BIRCHMAN Long experience in Fashion RetailClass-A references in the industryReference visits with Fashionworks solutionHigh quality consultants (experienced)7 Weeks assessment on MODIS business processesImplementation plan for standard scalableSAP Retail Fashion solution

BIRCHMAN INTRODUCTIONINDUSTRIESSERVICESPublicAdministration 4%Transportation &logistics 15%Industry18%Retail & FashionBanking &Insurance 16%25%Managed Services30%Consulting20% Application Managementand Operations. Technical Operations andInfrastructure. Business strategy. IT Strategy. Architecture.SolutionDelivery 50%Services &telco 10%Health 12% Business processes andsystems environment. Systems Developmentand Integration.EMPLOYEESGEOGRAPHICAL PRESENCE130UKLondon / GlasgowAustraliaSydney / Perth / BrisbanePortugalLisbonSpainMadrid / BarcelonaCosta RicaSaint JoseSouth AfricaJohannesburgChileSantiagoUnited Arab EmiratesDubaiDominican Rep.Santo Domingo160210290350420450 100Fashion&RetailRussiaMoscow2007 2008 2009 2010 2011 2012 2013

BIRCHMAN FASHIONWORKS

BIRCHMAN INTRODUCTION

Project Goals – Solid Foundation for Future Growth Efficient business processes – eliminate a lot of manual workImproved (new) POS system seamlessly integrated with ERPImproved (automated) integration with WMS systemsImproved FI/CO/FM closing and reportingNew BI (BW) for management and other reporting and analysesReliable and scalable IT infrastructureSolid internal IT-SAP-POS team builtSolid external consultants willing to cooperate long-termOrganization ready to accept further SCM/Retail improvements

MODIS SYSTEMS LANDSCAPE – KEY COMPONENTSSAP and BW end users – 400 WPOM portal 200 – Total 600 POS terminals – 800 ELO, OtherPOS Servers in Stores - 129ProcessIntegrationPOS DMMAPMODISDWsolutionCentralPOSSAP ERPSAP StorageQlikView

SAP Fashionworks for Modis - what is implemented/builtKey modules implemented:1) SAP Retail – ERP solution using Birchman Fashionworks methodology/bestpractice2) SAP Process Integration (PI) as integration hub for all applications3) Business Warehouse as Modis data warehouse platform with Bex front end4) POS DM central application/repository for sales (POS) data5) Integration of POS DM with SAP Retail6) SAP Landscape (dev, q&a, prod) with 10 running instances

SAP Fashionworks for Modis – key business processesBusiness processes:1) Masted Data management – standard and extended tools (WMDM portal)2) Purchasing with WPOM portal for vendor operations3) Import logistics (with HUB, no HUB) with SAP transport/shipment module4) Distribution center operations with integration with external logistics operators(ShareLand) and transport organizations5) Distribution and Replenishment6) In store SAP operations (goods, cash)7) POS integration into new SAP infrastructure8) Finance (General Ledger, Payment)9) Controlling (new cost center hierarchy, new processes with interlan orders)

SAP Fashionworks for Modis – key business processesKey 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 stepsNext project activities immediate:1.Finish migration until mid of May (with finance/controlling first monthreporting from new system)2.Migrate to new UKM POS (promotions, other improvements)3.Category Management calculation of CPI, SPI, DP and other reportingThe following projects – extend functionality of new solution:1) MAP implementation2) Replace Bex and QlikView with SAP Business Objects front end3) Implement CO-PA (profitability analysis)4) Implement CRM5) Upgrade of virtual infrastructure and backup system

Modis: Applications and Infrastruture Landscape

Modis applications and virtual infrastructure landscapeApplications landscapeDatawarehouse Landscape(SAP BW)POSDMSAP Retail ERP LandscapeDEVAPP1PRODDB CITESTDEVHANA Ph2APP2TESTBI (BO)ServerPOS LandscapeCRMMAPPI ServerPRODPOS SrvHANA Phase 1New POS1COther VirtualServers –Exchange, AD,File/Print,SharePoint.)Core IT Infrastructure in M1 datacenterVMware vSphere Virtual infrastructure with centralized management and monitoringCore networking (SAN/LAN Switches)Compute resources (5 hosts/servers)H1ExistingProject in progressH2H3H4H5HANAAppliancesVMware SRM (DR extension)Disk storage resourcesHP 3PARHP EVAD2DBackupDisaster Recovery Datacenter forCore Business Services(applications)

Application and Process View

Modis: SAP MAP Implementation Challenge

Demand planning – structure and requirementsBoard of directorsTOP-DOWN s Budget at Sales org., distributionchannel, brand and countryBreakdown atdivision, agent,customer andproduct classCalculate forecastfrom actual salesSales BudgetForecastStrategic PlanningBreakdown atstore, division andproduct classPlan quantities atSKU level perstore clusterSalesAgentPurchaseManagerEvaluate global demand (wholesale andretail) and release quantities to createpurchase ingMerchandisePlanningBreakdown at division,product class andprod. groupRetailManagerOptionsPlanningPlan number ofoptions per storeclusterCapsule DefinitionDecide capsuleconfigurationand deliv. datesFashionworks has a Merchandise and Assortment Plan solution for the Retail Fashion business that has evolved to amore flexible environment, SAP IP, conserving its integration quality with the transactional system.Retail ProductManagerDesign, sales andpurch.

Planning for retail overview – real time requirementsStore PlanningAssortment PlanningMerchandise PlanningCapacity PlanningPre SeasonPLANNINGStrategic PlanningOTBEnd of seasonPurchasingIn SeasonUpdate OTBPromotionsMarkdown planning.Replenishment

Store replenishment – real time and reliable forecastForecast flow Manual selection Automatic system selectionModelInitialization Specify model parametersDefine Forecastmodel Stock withdrawn from thewarehouse Enter manually or interface Reference materialconsumption Alternative historical data(AHD)Creatinghistorical dataCreate forecastvalues Calculated by the system Enter manually

SAP NetWeaver BW - New Architectural ParadigmSAP NetWeaver BWData ModelingDBMSAnalytical / PlanningEngineData ManagementSAP NetWeaver BWData ModelingHANAAnalytical / PlanningEngineRelational DatabaseData ManagementData StorageData Storage

SAP HANA Platform for Real Time Business

Modis „Big Data“data volume (dw no compression)RETAIL co. - POS - volume oftransactionsVolume of salesAvg sale amtAvg no of items2.500.000.000 25 3No of receipts/invoices100.000.000No of recpt lines300.000.000data warehouse 5 years recpt history500.000.000recpt lines 5 yearNo of SKU% of new SKU per year25.00040%10.000SKU total65.000no of SKU/dayno of trans/sec (12 hours working day)peryearperyear1.500.000.000no of new SKUno of recpts/day (300 working days)8 peritem333.333dimension keys:storedatetimeskuttpayment typeconsumer typerepeating cust.sku groupsku typesku numbersku design/colorstore regionuomdiscount rd currency val88888total bytesExpected value (bytes)1.000.00096 1001008no of stores400no of billed customers per store per day833fact table size (bytes)?!fact table size (GB)150.000.000.0 B00150 GB

Big Data Bundles for Retail from SAP3rd party,open sourceanalytic toolsBusinessObjectsBI SuiteSAP PredictiveAnalysisSAP VisualIntelligenceR, SAS, SPSS, etc.SAP real time data platformOpen APIs and anagementAnalytics EDWDataManagementMobile DataManagementInformation Management & Real-Time Data MovementCommon LandscapeEnvironmentCommon Design &ModellingEnvironmentFederated Access

The Future of Modis: HANA HadoopEnriching Retail POS with Customer Product Interest

(every day low price - каждый день низкие цены): . QlikView ELO , Other MODIS SYSTEMS LANDSCAPE t KEY COMPONENTS Servers . Server PI Server Other Virtual Servers t Exchange , AD , File / Print , HANA Phase 1 1 C SharePoint .) HANA P h 2 POSDM CRM