26 November 2009

Üstün Uçtum and Atilla Filizler co-founders of Axis Information Technologies discuss the importance of  an enterprise resource planning solution and the options available.

A key aspect of successful selling in the retail industry is having the right amount of stock at the right store. Even if a company has a particular item at another store or in one of its warehouses, in most cases if its not available to the customer in the store they are in, the sale is lost. To prevent this happening, companies employ product managers to keep an eye on the inventory levels in each store. Forecasting sales helps these product managers make decisions regarding the quantity of products each store should have in stock, but this is a complex task. And in the modern world, most retail stores have many items with short lifecycles, making inventory management even more difficult.

Companies are increasingly implementing enterprise resource planning (ERP) solutions to overcome these problems, but most of these implementations are done with traditional tools not designed specifically for the retail industry. Retail has its own special requirements, which traditional ERP tools cannot provide. Fashion retail systems, for example, must support a colour and size matrix, and a retail chain may have franchises in addition to its own stores that need managing.

Microsoft offers a number of solutions to cater for the specific needs of the retail industry. Retail Chain Manager for Microsoft Dynamics AX, for instance, equips retailers for success and increased profitability by helping them streamline business operations and better manage products, processes, transactions and business relationships. With the help of its category management capabilities, Dynamics AX allows you to manage groups of items to define promotions both for specific items and combinations of items. These categories can also be used for both supply and inventory-level management. In addition, Dynamics AX focuses on operation management, which includes moving goods through inbound deliveries, and managing warehouse functions, home and store deliveries, store logistics and sales.

The main benefit of using an ERP solution is the integration you get between different divisions (logistics, financials, sales, or purchasing) in the business. As Retail Chain Manager for Microsoft Dynamics AX is a vertical solution for the retail industry, it can be easily tailored to meet each retailer’s unique business needs by means of a wizard-based setup, department and assortment setup and advanced tools that support integration between existing systems. Retail Chain Manager smoothly integrates such processes as customer relationship management, financial management and human resources management with industry-specific technologies and databases to provide a comprehensive end-to-end retail solution. Thanks to its tight integration with other Microsoft products and technologies, such as Office and the Windows operating system, retailers can lower their IT costs and improve their return on investment by building on their existing infrastructures.

In retail companies, individual departments require different information about the products they deal with. For example, the accounting department requires different information about products to the marketing department. With Retail Chain Manager, items can be grouped accordingly, allowing different departments to extract the specific information they need.

Although all items are defined in the database, each store operates only with the range of items specifically assigned to it. If you are managing a number of stores and you want different clothing lines to appear in them at different times, for example, it is possible to use Retail Chain Manager to create multiple ranges and assign them to different stores. Users can also set replenishment rules for items within each line, including setting minimum and maximum quantities and specifying whether items are mandatory or optional. Because the specified range determines each store’s view of the item table, it serves as the basis for all further processes.

Dynamics AX’s supply chain management functionality provides retailers with an integrated system for planning, organising, executing and following up all supply chain flows, including all goods flows that commonly occur in centrally managed retail chains. The solution is built around the concept of a central organisation that sets item range and replenishment rules, thus guiding stores through each step of the stock management process.

Companies can use the solution to manage their supply chains smoothly and efficiently, while strengthening internal control of all procedures with closed-loop processes that are tightly integrated with inventory and financial management. The solution is relevant to both single stores, and franchise and multi-store retail chains, in addition to both types combined.

Replenishment proposals are based on range settings, actual stock levels, sales history and other variables that are used to generate planned store orders that can be managed either within the store or back office. A proposal can run at any time. It can be planned as part of a batch process or run on the spot to generate a proposal based on accurate, real-time data. For example, deliveries from central warehouses are often organised on a weekly basis. With Dynamics AX, users can organise deliveries from the central warehouses using a weekly schedule, which indicates one or more delivery days for an item group and sets the delivery order replenishment cycle.

Although Axis had many success stories with its own retail solution Axis Retail Suite, in many cases it implements Microsoft Retail Chain Manager because of its great out-of-the-box functionality. With the largest consultancy and development teams in Turkey, Axis combines its retail know-how with Dynamics AX technology to provide end-to-end solutions for the discerning retailer.

This article first appeared in the Retailspeak Partner Guide 2010

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