Apparel & Footwear Roadmap Update

Apparel & Footwear Industry Ecosystem

CGD1

Sub-Contractors

Government (i.e. Customs)

Catalog

Mill/Trim Vendor

Apparel/Footwear Company

Retailer

Consumer

Full Package Manufacturer

Distribution

Internet

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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Slide 2 CGD1 Change Pictures where appropriate

Celeste Donahoe; 26/5/2004

SAP AFS Background

Enterprise Management Product Development Pre-season Forecasting In Season Supply Chain Execution Post Season

SAP AFS for Manufacturers

Budget New Styles Sales Managers Sales Orders Allocation Run Delivery Invoice

Collab. Planning

Consensus Forecast

MRP Planning

Purchase Reqs

Purchase Orders

Factory Activity

Logistics Activity

Close Out Inventory

Sales Reps

Planned Orders Inventory

Production Orders

Factory Activity

Logistics Activity

CO-PA FI/CO BW

MM-MD PP-MD

SOP Flexible Planning

SD

Sourcing MM/WM Supplier Management Subcontracting SD = Sales & Distribution Sourcing WM = Warehouse Management AFS Supplier Workplace

Production Production Planing Subcontracting Shop Floor Control

Retail

CO-PA = Costing / Profitability Analysis FI/CO = Financials BW = Business Warehouse

3

MM = Materials Management MD = Master Data PP = Production Planning SOP = Sales & Ops Planning

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar

SAP AFS Customers Status Q4 / 2005

Adidas (Germany)

Alpargatas Group
(Brazil)

Ambro Holdings (New Zealand)

And 1 (United States)

Artisana (Italy)

Arvind Mills (India)

Asics (Japan)

Atateks (Turkeu)

(Canada Bauer Nike Hockey )

Bejing Li-Ning (China)

Benetton (Italy)

Boyner Holdings (Turkey)

Brioni (Italy)

Bruno Magli (United States)

Burberry (United Kingdom)

Calida (China)

Calzados G iovania (Mexico)

Camper (Spain)

Cole Haan (United States)

Courtaulds Clothing (Sri Lanka)

Crystal Group (Hong Kong)

CSP Intl (Italy)

Cutter and Buck (United States)

DPortenis (Mexico)

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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SAP AFS Customers Status Q4 / 2005

DeRigo (Italy)

Dolfuss, Mieg & Cie (France)

Ecco

(Denmark)

Embry Group (China)

Esquire (Korea)

Eurodress (Germany)

Fashion Box (Italy)

Fila

(Italy)

Fornari

(Italy)

Foschini (South Africa)

Fossil (United States)

G & A Jewelry (United Kingdom)

G & K Services (United States)

Global Brands (United Statees)

Head Tyrolia (Austria)

Hugo Boss (Germany)

Hwa Seung Vina (Vietnam)

Imagemark (United States)

Industrias Piagui (Mexico)

5

Induyco

(Spain)

Jones Apparel Group (United States)

Justin Brands (United States)

Koos of Course (United States)

Kwintet (Denmark)

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar

SAP AFS Customers Status Q4 / 2005

Levi Strauss (United States)

Limited Brands (United States)

Lucia (Germany)

Madura Garments (India)

Marcolin (Italy)

Marui (Japan)

Marzotto (Italy)

MAS Holdings (Sri Lanka)

Mascot (Denmark)

Mast Industries (United States)

Muratacho (Japan)

Napapijri (Italy)

Natural Textiles (India)

Nike (United States)

Oakley (United States)

OP Profashion (Czech Republic)

Pantaloons (India)

Peerless Clothing (Canada))

Pentland (United Kingdom)

Playcorp (Australia)

Prada (Italy)

Preca Brummel (Italy)

QVC (United States)

Reebok (United States)

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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SAP AFS Customers Status Q4 / 2005

Riddell Bell (United States)

Rusty (Australia)

Saez Merino (Spain)

Salamander (Germany)

Samsonite (United States)

Schiesser (Germany)

Scott Sports (China)

Shanghai Three Guns (China)

Sports Supply Group (United States)

Stonefashion (Netherlands)

Superior Uniform (United States)

Swiss Army (United States)

Tainan Enterprise (Taiwan

Tommy Hilfiger (Netherlands)

Triumph (Germany)

Uhlsport (Germany)

Under Armour (United States)

VF Corporation (United States)

Burton Snowboards

KSwiss

Marchon Eyewear

Charly group mexico

Mexico

Warnaco (United States)

Wolverine (United States)

United States

United States

United States

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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Apparel and Footwear Recent Key Wins

Limited Brands

Piagui

Samsonite

Alpargatas (BR)

Underarmour

Giovanna

Burberry

Imagemark

ASICS

DPortenis

Prada
SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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Additional win data as March 2006

Americas 4thqtr 2005 Victorinix Swiss Army Brands Inc Bell Riddle Sports Supply, Burton Snowboards Jones Apparel Koos Jeanswear KSwiss Vera Bradley
SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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1st qtr 2006 Emyco Mexico Charly group Mexico Marchon Eyewear

Apparel & Footwear Industry Standard Processes

SAP is the De-facto Fashion Industry Standard
SCM/VMI Replenishment/ Netweaver/ ESA
l

CRM and/or Retail

Manufacturing and/or Warehouse Mgmt

227

Order to Cash, Global Sourcing, and/or Financials

1997

1999

2001

2003

2005

2006

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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AFS Evolution 1
AFS 2.5B AFS 1.0B
CRM Interaction Center Parallel ARun Category enhancements EAN/UPC Recycling NRF Code Support MM Order confirmations MM Shipping notifications MM ATP for Subcontracting AFS MRP cockpit AFS Stock/Requirements list enhancements PP Phantom assemblies BOM enhancements including engineering change management PP Missing Parts Assembly scrap and bundle qty SD UoM for sizes SD BOM correlation SD Multiple user contract release and call off AFS Online Store Quantity distribution profile Delivery Program (seasons) ARun customizing check tool Delivery Check tool Dynamic OTD date Parallel ARun for faster performance ARun preview (to future receipts) enhancements Release rule in sales order ARun for sales order storage location and batch Management Tool selection Over-delivery MTP/PTO Reallocation strategy enhancement

AFS 3.0B

AFS 5.0 ERP2004

First Customer Shipment AFS Release 1.0B Material Grid Sales Grid Purchasing Grid Category MRP Planning Purchasing Material Mgt FERT Generator Sales & Distribution ATP Size Pricing Value Added Services Allocation Run Mutil Store Order I Production

AFS Retail Interface Business Warehouse for AFS Mass Document Change IDOC enhancements IM Distributed system stock transfer Archiving enhancements SD/MM Distribution Profiles (size curve via SIS history) Basis Grid History & reporting SD Customer Master additional data SD Mass Customer change SD VAS Enhancements SD prepacks SD Assortments SD Multi-Store Order II SD Quantity Contracts and call offs Allocation Run (ARun) - Order Scheduling ARun - Management Tool Allocation Fill Up Allocation Preview ARun Reorganisation AFS Vendor Functions Transfer posting (1 & 2 step) Subcontracting Source Allocation Invoice Verification WM Planning horizons MRP List Inventory Valuation Costing Profitability Analysis

ISA R/3 Edition APO DP Reseller Portal AFS 5.0 ERP Development SCM 5.0 Development CRM 5.0 Development

1998
Early Early Adopters Adopters

2000
Controlled Controlled Sales Sales

2001
Launch Launch

2002
Roll Out Roll Out

2004

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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AFS 5.0 Footprint Scope

SD
Enter material ATP check MSO II + standard order support for ATP relevant VAS Auto ATP Substitutions (material, SKU, plant) Multiplant Support for MSO II Allocation Groups Pricing/Credit VAS Determination Order Scheduling Order Save

Allocation Run
Select orders and Stock Filter and Prioritize orders Allocate Allocation to Future Receipts Early Warning Report Hot Product Allocation Auto Substitutions Release Check Auto Rejections Performance Improvements Post Orders

ARun Optimizer
Customer Sales Reps Select orders Manage Orders Run Release Rule Manual rejections Re Do Allocation Private Stock Flagged Orders Substitute materials, SKUs, Plants Branch to VA02/03 VAS support Post changes

Mass Document Change (SD)

Select orders Specify changes Add new items and SKUs Update order

MM
Integration with Future Receipts Subcontracting Enhancements Use of standard transactions

ATP Reschedule (SD)

Select materials Specify sort Keep old confirmations Performance Improvements Update orders

PP
Integration with Future Receipts

Material Size Grids and Stock Categories now Defined in Classification SKU Level Integration with SCM:DP, SNP, RR SKU Level Integration with CRM: eCommerce, Mobile Sales, Call Center
SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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Roadmap mySAP for Apparel and Footwear

1998

2000

2001

2002

2003

2004

2005

2006

2007

2008

AFS Releases AFS 1.0

R/3 3.1I

AFS 2.5
R/3 4.5B

AFS 3.0
R/3 4.6C

AFS 3.0 R/3 4.6c

AFS 5.0 ERP 2004 / ECC 5.0

Netweaver

AFS Release Basis tbd

Netweaver

e-Commerce R/3 ISA 3.1 R/3 Edition BW CRM IC APO DP Reseller Portal

E-commerce R/3 ISA 4.0 R/3 Edition

MDMe

MDM Matrix Product

SCM Supply Network Planning (SNP) SCM Store Replenishment (RR) SCM Seasonal Demand Planning (DP) CRM E-commerce (Internet Sales) CRM Field Sales / Mobile Sales CRM Order Management (Call Center)

PLM cProjects cFolders SCEM DMS

mySAP Business Suite

Available

Planned Development for style/size (note planned dates and/or content may change)

AFS release number in bold, R/3 basis in normal type AFS 5.0 Apparel & Footwear, AFS 04. General Availability July 25 SAP AG 2005, is on ramp-up Dec Roadmap Update August 2005, Peter Akbar 2005
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Apparel & Footwear Appendix AFS SAP Retail AFS Planning Solutions

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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Apparel & Footwear: Who WAS Doing What in 2001?

VERTICAL SILOS Factory Factory VERTICAL SILOS Store Store

Fashion/Apparel CPG Company

Design, develop, manufacture/ source and sell goods to B2B wholesale customer(Retailers)

Apparel and Footwear Co with Wholesale & Retail Channels

Design, develop, source and sell goods to B2B wholesale customers and to consumers through own retail channels

Vertical Fashion Retailer

Design, develop, source and sell goods to consumers through own retail channels (B2C)

Oreton
French Connection

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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Apparel & Footwear: 2005 Everyone is doing Everything!

Verticalization Factory Factory Verticalization

Fashion/Apparel CPG Company

Design, develop, manufacture/ source and sell goods to B2B wholesale customer(Retailers)

Apparel and Footwear Co with Wholesale & Retail Channels

Design, develop, source and sell goods to B2B wholesale customers and to consumers through own retail channels

Vertical Fashion Retailer

Store Store

Design, develop, source and sell goods to consumers through own retail channels (B2C)

Oreton

French Connection

French Connection

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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SAPs Fashion Solution Landscape

SCM RR Customers Stores
VMI Orders / VMI

SCM DP
Collaborative Forecasting

SCM SNP
Supply Planning

Merchandising Forecast & & Assortment Replenishment Planning (MAP) (F&R)

Store Planning

Vendors / Factories

Production / Purchasing

AFS 5.0 ECC 5.0

Consolidated Financials Human Resources Corporate Services Integration via Business Intelligence SAP Netweaver

Store Operations

Own Stores

Retail ECC 5.0

Products
IS-AFS Landscape

Customer Orders

Local Purchase Orders

IS-Retail Landscape

MDMe

PLM

CRM B2B / B2C

POS Data Management

Store Management

GTS

Business Intelligence(BW) SAP Netweaver

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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AFS to Retail Master Data Integration

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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AFS to Retail Process Flow

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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Demand Planning (DP)

Seasonal Demand Planning

Supply Network Planning Responsive Replenishment (SNP) (VMI)

Supply Chain Event Management

Supply Chain Planning for Apparel and Footwear DEMAND PLANNING

Planning Planning Horizon Level Planning Horizon

APO DP Strategic 0 3 Years Style/Group APO DP 0 1 Year DP Collaboration

AFS PIR

MRP Tactical

Purch. Req

Purchase Order Operational

0 12 Months Style/Color/Size Purch. Req 0 16 Weeks Responsive Replenishment (VMI) AFS MRP Purchase Order

SUPPLY NETWORK PLANNING

SNP

Weekly Daily Sub-Daily Sales Order Delivery

VMI/ CPFR

SCEM

Supply Chain Event Management

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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Apparel & Footwear Processes and Solutions

Strategic Planning Supply Chain Planning Time-to-Market Sourcing & Procurement Supply Chain Execution
Strategic Planning Marketing Planning Assortment/Range Planning (MAP)*

BW
Production Planning / MRP AFS ERP

Demand Planning (DP)

Supply Planning (SNP) Vendor Managed Inventory (RR)

SCM

Netweaver / ESA

New Product Development* New Product Introduction

PLM
Vendor Relationship Mgmt Operational Purchasing Global Sourcing (SNP) Foreign Trade Mgmt* Global Trade Services*

AFS ERP Inventory Management

Manufacturing Order Fulfillment Allocation (ARun) Warehouse Mgmt Transportation AFS ERP Sales Order Management Brand Mgmt Sales Force Mgmt Account Mgmt

SCM
Supply Chain Event Mgmt

GTS
SAP Retail Integration AFS to Retail Master Data Retail to AFS Ordering AFS Leading Financials

SCM
Catalog, e-Commerce & Call Center

AFS ERP

Sales & Marketing

21

* Not fully tested or Testing in Process

AFS ERP

CRM

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar

AFS Store Replenishment Example

Customer
Forecast / Promotion Collaboration
APO-DP Collaboration

XI
POS Store Inv Sales PO Nbrs Promo PO Ackment

Customer
Send POS / Store Inventory Sales PO Ackment

Forecast Collaboration

Sales History

Sales

Demand W Planning 16 Mid-long weeks Term

W Store Forecast

Order XI Generation

Sales Orders

Inventory Stock Future Receipts

BW
22

APO-DP

RR

RR

AFS

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar

Order Management

Allocation Run

Allocation against future receipts

ARun Optimizer

Delivery

Invoice

Allocation Run - ARun Create Orders

Order Entry

Allocate Stock
Allocation Run (Arun)
Select / Filter Prioritize/Sort Reservations to Stock Reservations to Future Receipts Release

ARun Management
ARun Optimizer
Management Tool Run Release Rule Manual rejection functionality Respread alloc.qty within an alloc.group Customer Service Area Private Stock Flagged Orders Branch to VA02/03 Substitute Materials Substitute Sizes VAS support

Deliver
Delivery Creation

ARun Stock Management

Move stock to own buffer Customer Service Rep (CSR) Move stock between CRSs

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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Order Management

Allocation Run

Allocation against future receipts

ARun Optimizer

Delivery

Invoice

Order Entry
Order Entry
Changes to order reflected in reservations

Allocate Stock
Allocation Run (Arun)
Reservations to Future receipts(FR) 2 Release checks Future MRP Status Season / Cancel date checks against FRs Not for all orders

Tracking
ARun Optimizer
See reservations See late orders Drill Down Delete reservations

Changes
Future Receipt / Order Change
Changes Reflected in reservations Reservations passed from PO to SN and back Safety window

Stock Decision
Goods Receipt
Keep stock reserved OR Free up stock for next Arun Sorting Rule

Deallocate orders in reverse priority sequence Logging deallocations

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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Benefits in using the SAP Apparel and Footwear Industry Solution

With the additional functionality provided by the SAP AFS Industry Solution, the following issues in a typical Apparel and Footwear company can addressed:

Optimizing service levels Streamlining operations for efficiency Excess/redundant inventory or Stock shortages/out of stock Poor on time delivery Inefficient logistics and distribution process Lack of demand visibility Allocating inventory to key customers Chargebacks

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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Benefits in using the SAP Apparel and Footwear Industry Solution

With the additional functionality provided by the SAP AFS Industry Solution, the following issues in a typical Apparel and Footwear company can addressed:

Inability to commit delivery at order time (ATP) Lack of visibility to consolidated spend across the enterprise Delivering real business value Handle large volumes of data Grid with style/ color/size At SKU level manage
inventory materials management purchasing forecasting production orders

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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The following Slide also gives a good overview of the additional AFS functionality versus Standard SAP.

IS AFS 5.0 (based on ERP 2004)

AFS Master Data Sales and Distribution

Material Grids

Categories

Material Master

Customer Master

Vendor Master

Bill of Materials

Pricing

Seasons

Value Added Services

Sales

Multi-Store Orders

ATP

Allocation Run

Delivery

Billing

BIW

Procurement
Purchase Purchase Order Requisition Confirmation

Warehouse Management
SOP PIR

MRP BOM Routing

Inventory Management WM

Invoice Verification

Planned Order

Markers Combined Production Production Orders Lots

Valuation/ Product Costing

Production

R/3 Standard functionality with AFS enhancements

SAP AG 2005, Page 1

AFS specific functionality

Grids and Categories

SAP AG 2005, Apparel & Footwear, AFS Roadmap Update August 2005, Peter Akbar
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