REEBOK’S SWEEPING GLOBAL SYSTEM
Byline: Kim Ann Zimmermann
ORLANDO, Fla. — Reebok International Ltd. will have an enterprise-wide retail system that integrates financial data and supply chain management functions installed by the first quarter of 1998.
Reebok will also begin testing another planning system to manage Reebok’s footwear and apparel wholesale operations, Reebok officials disclosed last week at a technology users-group conference here.
The company, based in Stoughton, Mass., plans to link the retail and wholesale systems through standard electronic data interchange. Both resource planning systems are provided by SAP AG, Walldorf, Germany, which sponsored the conference.
“While we are retailers, we are very focused on the wholesale side of the business, so we really needed a system that could meet our needs on both sides of the equation,” said Peter Burrows, Reebok’s vice president of management information systems and chief technology officer, during an interview.
Reebok is among the first U.S. retailers to install SAP Retail, a version of SAP’s enterprise-wide information system tailored for retailers.
Nash Finch Co., a Minneapolis-based grocery wholesaler and retailer, is also installing SAP Retail. SAP AG’s U.S. subsidiary, SAP America, is based in Wayne, Pa.
“We do business in 40 countries, so we were really looking for a system that would address the issues of global retailing,” Burrows said.
In 1993, Reebok committed $46 million to upgrading information systems, including this project, as well as improvements to the manufacturing, design and marketing systems. When he began researching the technology, Burrows found most enterprise systems for managing the supply chain, including SAP, did not address some of the basic needs of apparel and footwear retailers.
“We needed a system that could handle various sizes, colors and styles of products,” he said. “We needed a system that could handle those kinds of complex issues associated with retailing and it just wasn’t there.”
At that time, the firm decided to continue to operate with its existing legacy systems while monitoring ongoing development with the new technology. Legacy systems conduct data processing tasks in closed environments managed exclusively by information systems staff.
“We met again with SAP in August of 1995 and had a lot of subsequent discussion about our requirements and the requirements of the retail business.”
In February 1996, Reebok agreed to be one of the early U.S. adopters of SAP Retail. SAP Retail supply chain management system works in conjunction with SAP’s R/3 system for accounting and finance.
“We started installing the financial portion of the system in May of 1997 and we are live in our corporate offices and our North American operations,” Burrows said. This system includes general ledger, accounts payable and receivable and purchase order functions as well as asset management.
He said he plans to have all of the company’s 100 U.S. retail outlets live on the system in the first quarter of 1998.
Other functions of SAP Retail, including merchandise logistics, merchandise replenishment, promotions management and supply chain costing and accounting will be rolled out at that time.
In addition, the SAP system will interface with Reebok’s warehouse management system from Catalyst International, Milwaukee. “It was critical that our warehouse management system has a certified link to the SAP system,” Burrows said.
Ultimately, point-of-sale data will be fed into the system. Burrows said the company still faces some challenges in this area because POS systems vary by country. In addition, there are a variety of legacy systems, including modified packages and homegrown systems, that currently exist within the company.
The wholesale system, to be tested later this year, will address some of the issues that Reebok faces managing its wholesale supply chain.
“This will help us manage the flow of goods from our factories to the retail level, including our own stores,” he noted. “This system is more for managing things downstream from the retail operations,” he said.