DSD Option for Allocation

[Former Member]

Hi,

We are a retailer in a whole sale company with no Retail owned DC's. We are looking at options to allocate - Cross docking vs DSD. Can you share some expereinces on DSD option? That seems to work welll for our situation. just wondering what others have done.

Thanks for your time.

Subha

[Former Member]

Hi Subha,

Allocation Process for your Company can be mapped as a two-step process. In the first step the Wholesale company - HO (WC) carries out quantity planning for the local DCs(or warehouses). In the second step, the local DCs( or warehouses) run allocation for their respective stores.

Following may be the process steps in this senario:

a. Allocation is run by WC - Generation of Purchase Orders by local DCs(or warehouse) against WC.

b. Outbound Deliveries generated based on the above purchase orders

c. Goods Issue posted at the WC

d. On receipt of goods at local DCs(or warehouse), goods receipt posted against the Purchase Orders generated.

e. Stock updated at the local DCs(or warehouse).

f. As part of second step, Allocation is run by local DCs(or warehouse), for distribution to stores. The above process is repeated for the same.

DSD

Direct Store delivery is an exception to the normal supply chain process wherein the stores raise their requirements to the WC; however the delivery of goods happens directly from vendor bypassing the normal supply chain flow. The vendor however invoices the WC. The WC in turn bills its divisions/stores.

Following may be the process steps in this DSD senario:

a. Store raises purchase order to WC

b. WC raises third party Purchase order to the Vendor. The delivery address in the order is that of the stores.

c. Vendor delivers goods to the store, sends shipping notification to the WC confirming the delivery of goods.

d. The shipping notification in the inbound process creates an inbound delivery.

e. A statistical goods receipt is posted at the WC - no update in stock carried out.

f. Goods receipt posted at stores u2013 stock is updated

g. Vendor invoices the WC.

h. WC bills the stores u2013 creation of sales order based on the purchase order and then a billing document.

Hope it help.

Regards,

Anirban Roy

[Former Member]

Thanks Anirban.

We in Retail do not have a DC. We use Whole sale DC which directly ships our product to the store. In the current legacy world, we have set up logical warehouses in Retail to which we write our Po's to reserve and then when products are available, we allcoate from the logical warehouse to the store. The product is sent to the store directly from our wholesale and/or vendors. Our Wholesale and/or vendor invoices us by store.

We are trying to figure out how best to replicate this in SAP Retail. Is VDC an option for us? There seems to be an over head of creating STO's, turning to PO's and also the invoice to be again matched up with VDC Invoice.

[Former Member]

hi!

for DSD variant - why not just create PO order "Supplier to store"?

In that variant any case there would be a lot of documents (both paper & electronical), so from economic point of view it would be more effective to replenish stores via DC. Please, consider Ehp4 functionality for DSD - very user frienldy interface for managing sources of supply & prices for relatoinships between stores & suppliers (also load from excel).

for Allocation via DC - i recommend to use allocation table for push scenario (both variants - allocate existing stock to stores and with procurement new stock) and collective purchase order for pull scenario.

While using wholesaler's DC there is question about stock quata on DC for retail business. it could be usefull to create logical storage location on DC for that purpose.

[Former Member]

Thanks, Mikhail.

We are planning on creating virtual DC's to be able to allocate using Allocation table. Is the general practice to use PO's. We have some recomemndations on using STO's and posting Dleiveries and billing documents for STO instead of PO, receipts and Invoices. Has anyone done that?