The following documentation maps a typical process flow for Merchandise and Assortment Planning, in simplified form.

The example scenario is based on Best Practice Scenario 1_SAP that is delivered with the SAP System. You can use the example scenario to create similar scenarios by copying the complete scenario and tailoring it to match your requirements (use the 1_SAP for modeling possible scenarios for your company ONLY as the SAP example scenario can be changed at all times).

You can use Merchandise and Assortment Planning in your company as follows:

1. Begin the planning process by stating your Objectives as defined by management. For example, sales are to increase by 5% over the next two years. Five new stores are also to be opened.
2. Initially, you want to implement your strategies as values according to Season, Purchasing Organization, Distribution Chain in Objective planning. You can plan your key figures using Objective planning, for example, sales, shrinkage, markdowns, and returns. You want to see gross revenue and calculated sales as the result. You want to compare your planning data with your actual data, at a later date.
3. You want to use the results from your Objective planning in the detailed Merchandise planning and Store planning. To do this, the objective planning data is broken down according to levels (Merchandise Category or Store), to be used in more detailed planning processes. You can use the same key figures for your planning at these levels as for objective planning, and then calculate gross margin. As merchandise planning and store planning can influence existing objective planning, you should compare the gross margin that is calculated in the different planning steps.

After planning the gross margin, use merchandise planning and store planning to calculate stock. Although you can only plan your stock on a value basis in store planning, you can plan your stock on a quantity basis in stock planning. You can use the average retail key figure (average price at merchandise category level) to convert stock calculated on a value basis into stock calculated on a quantity basis. You can use the following key figures when running stock planning: opening balance (stock), additional purchases, sales, returns, and initial budget. You can also calculate the range of coverage, load transfer, and GMROI. You should also compare your planning data with your actual data at this stage.

4. You can run an external space management program directly from your planning scenario, in the planning step for space management.
5. You can improve your stock planning on a quantity base at price band level in merchandise planning by using price band planning. You can also use this function to compare the price bands with your planning and actual data.
6. The stores that you have grouped according to sales are included in store group planning. You can use store group planning to run planning using price bands, store groups, assortment levels, assortment width, and assortment depth to determine the total number of articles (assortment width * assortment depth). The number of articles (total number of articles in each store group and assortment level) in the price bands should match the additional purchases for the price bands. You can compare the results of price band planning and store group planning and then adjust your key figures accordingly.
7. The results of the store group planning are included in assortment planning. To do this, the data from store group planning is broken down for detailed planning at article level. You use the same key figures for this as in store group planning. Running assortments planning can strongly influence previous data generated in store group planning. This allows you to compare planning data from the two planning steps.

When planning is complete, planning data exists at every planning level in the planning hierarchy. The data that has been generated can be used in reporting and other applications, for example:

• Reporting

• Promotions and allocation tables

• You can use the results of your store group planning as the basis for creating allocation tables and promotions. You can use planning interfaces to send selected data to the relevant application when creating promotions and allocation tables.