Executing Omnichannel Order Fulfillment for Retail (5FZ)

Objectives

After completing this lesson, you will be able to:

  • Create a click-and-collect Sales Order, Process the Picking Request, and use the Hand Over Orders app

Omnichannel Order Fulfillment for Retail (5FZ)

All parties are involved in this unit. For every brick-and-mortar Retailer, Store Operations is at the heart of the enterprise. A wide range of processes ensures that merchandise is available for sales during opening hours, with excellent customer service. Specific apps are available to support the store manager, and the store associate roles. Note: The Store Operations apps require the user assignment to a specific store. Activities in the store include merchandising functions such as ordering and receiving goods, inventory management including physical inventory, and consumer/customer sales via point-of-sale systems (POS) and sales orders. Store connectivity comprises outbound and inbound message transfer between the retailer's central system(s) and the store's POS system. For example, the POS systems are regularly updated with article and price information so they are ready to handle sales transactions, and in turn, for example sales and goods receipt/movement data is transferred from the store to the central systems.

The 4 solution processes shown in the figure, Overview: Store Operations, are the starting point to cover the wide range of available applications for store operations. The solution process 5FY, covered in this lesson, explains how the ordering and receiving apps are used. Solution process, 5FW, mainly looks at the store manager role. The manager assigns the store associates to the store, determines the picking sequence for click-and-collect or click-and-reserve customer orders, and uses the My Store Overview app for the real-time monitoring of current store processes. The Look Up Retail Products and Print Labels apps, covered in solution process 3HQ, are essential in the daily work of store associates. To connect store sales and online commerce, solution process 5FZ for example introduces the click-and-collect scenario.

Each solution process represents a lesson in this unit, and can be completed individually.

This lesson covers the solution process Omnichannel Order Fulfillment for Retail (5FZ).

In the retail industry, specific terms differ from the standard terms used in other lines of business. The following terms are used synonymously in this document:

Standard Terms in Lines of BusinessSAP S/4HANA Cloud for Retail, Fashion, and Vertical Business
Material, ProductArticle
Material group, Product groupMerchandise category
Plant, LocationSite

Most retail store customers / consumers now shop online for a wide variety of items, from groceries, to clothing, and even furniture. Not always should the merchandise be shipped to the customer: To meet the demand for flexibility regarding the delivery options, the online order fulfillment process covers the scenarios for picking up merchandise in the selected store, instead of having it shipped.

The click-and-collect (online order fulfillment) business scenarios can be a better option for both the customer and the retailer:

  • For customers, click-and-collect eliminates the risk of missed deliveries, theft of delivered items, and unnecessary shipping charges. For those reasons, some customers may prefer click-and-collect fulfillment.
  • For retailers, click-and-collect is more cost effective than home delivery. Retailers can offer customers a wide range of retailer pick-up locations without having to invest in additional brick and mortar sites, vehicle maintenance and fuel, and so on. The retailer pick-up location can be in a store or designated collection points.

In SAP S/4HANA Cloud, a click-and-collect (pre-paid) business scenario involves following steps:

  1. A customer browses the online product catalog and chooses the option to collect the products at a store.
  2. When an order is placed, a sales order is created in the order management system (for example SAP Commerce) and saved in the SAP S/4HANA Cloud system. For creating the sales order directly in the SAP Retail system, we use the Create Sales Order - VA01 application, which can be accessed from the Manage Sales Orders (F1873) app, displayed in the figure above, Manage Sales Orders.
  3. When the sales order is saved in SAP S/4HANA Cloud system, two follow-on documents are generated: the store pickup order (system internal document, which connects the picking request(s) to the in-store fulfillment sales order), and the store picking request.
  4. In the store picking request, the system automatically generates the list of products that can be picked by store associates. These products are sorted and grouped to recommend a picking path that will save the most time, based on the merchandise category sort sequence which was defined in the Maintain Picking Sequence app beforehand (please refer to solution process My Store Management (5FW) for details on that app). Also, a maximum weight and volume (optionally) defined in configuration are considered, to reflect the picking container, such as a bag or box, which is used by the store associates to pick the products. The store associate uses the Process Picking Requests (F4643) app to pick products on the shop floor. A specific picking request can for example be searched for by sales order number, or by customer name. While picking the products, the store associate scans the GTIN printed on the products and places them in a picking container.
  5. While still using the Process Picking Requests app: Once the products are picked, the store associate places them in the handover area. To do so, the associate scans the handover shelf number to identify where exactly the products will be placed. With that, the status of the picking request is set to completed. Note: At this time, the outbound delivery document is generated in the system.
  6. After picking is complete, the orders are displayed in the Hand Over Orders app (F4639), and are ready to be picked up by the customers. The store associate determines the handover shelf number easily, searching by sales order number, customer name, or telephone number. When handover is complete, the system generates the billing document (payment already done via online order) and posts good issue.

There are several process variations: It's not always a click-and-collect process, but it could also be a click-and reserve process:

For some retailers, for example those in the fashion and footwear business, customers like to try items on before purchasing them. The online orders for which (pre-) payment is not made, fall under click-and-reserve scenario. The status of such orders is shown as Not Paid in Hand Over Orders app. In this case, a customer purchases the products and makes the payment at point-of-sale (POS), so by default settings, the sales order will be rejected in this process. However, alternatively it is possible to configure that also the click-and-reserve sales orders remain active.

For the pick up and hand over orders process, several configuration options are available. For example, for the store pickup orders, the click-and-collect shipping point is defined. Also, rejection reasons can be maintained, for example for short picking (if there is no, or not enough stock for an ordered item). Then, you set the number range, and optionally also the maximum weight and volume for the store picking requests. Furthermore, you can also decide, if a store should not use the placement in a handover bin scenario (for example if there is no dedicated space in the store to keep the pre-picked deliveries).

In the schema for the store pickup order, you set the cancellation period: It specifies the minimum number of days after which store pick up orders, that have not been handed over, can be canceled. The Hand Over Orders app shows the status of such orders as Order due for Cancellation. The store associates can then return these products to the store's shelves. In the schema for handover orders, you can determine, if a store associate must scan the picking request while removing the picking container from the handover shelf.

Summary

Tutorial: Execute Omnichannel Order Fulfillment for Retail

Watch the tutorials/simulations My Store Assignment - Pre-step, Stock Overview - Pre-step,  Post Goods Movement - Pre-step, Create Sales Orders - VA01, Process Picking Request, Hand Over Orders and Document Flow to learn more about the system-related activities.

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