Ace Hardware’s commitment to the SAP solution portfolio has been paying off for the 4,100-store cooperative since the initial implementation in 2007. Initially, “we transitioned to SAP for the efficiencies, flexibility and controls we believed an integrated system would bring to Ace’s supply chain,” noted Rick Williams, Director, Business Relationship for Ace. “From an IT perspective, we have much more visibility into the flow and status of retailers’ orders.” With the old system, he noted, “we had to closely monitor our order processing system every evening, responding to crises and issues. That has almost gone away completely.”

Beginning with the selection of mySAP™ ERP and the SAP® for Retail in 2006, Ace has seen incremental success with the solutions through the present and expects to continue reaping the benefits into the future. “Now we have much greater insight into our inbound shipments, vendor performance and distribution processes that we never had before,” said Williams. “Our SAP audits are so clean now we can probably shift our attention to other areas.”

While some retailers experienced increased sales during the 2011 holiday season, Sears Holdings Corp. is closing up to 120 Sears and Kmart locations due to lackluster sales. In total, income during the eight-week period before Christmas was down 5.2%, while year-to-date purchase fell 2.6%.

In a statement released on Dec. 27, 2011, Sears Holdings Corp. revealed that the company’s yearly earnings were expected to be less than half of its 2010 income of $933 million. Lower sales, increased margin pressure and high expense rates were all causes of the company’s downfall, according to Lou D’Ambrosio, CEO of Sears Holdings Corp.

Constant replenishment, disparate forecasting systems and cumbersome data volumes challenge even the best retailers to accurately predict customer demand in order to optimize inventory. Retailers also need to maximize inventory and improve customer service, while synchronizing consumer demand with global suppliers. Though all types and sizes of retailers need to optimize inventory in order to create more efficient supply chains, the largest merchants, supporting thousands of locations around the globe, are particularly challenged to manage complex inventory logistics.

Best Buy, for example, was struggling to produce a consistent, predictable supply of inventory. The $50 billion multinational retailer, maintaining 4,000 locations and 15,000 SKUs, was looking for better ways to balance safety stock while improving service levels. As a lower velocity retailer, Best Buy was operating a legacy system with one replenishment method that did not counterweigh store demand and product category with store presentation, safety stock, warehouse supply and lead times.