Beyond Greenfield: CeleRITE’s Innovative Approach for AFS to S/4 Fashion

The article discusses how SAP S/4 Fashion streamlines the fashion industry’s ERP needs by consolidating various business functions into a single platform to enhance agility, reduce costs, and optimize operations, while introducing CeleRITE as a selective migration approach for transitioning from SAP AFS to S/4HANA.

The fashion industry is dynamic and operates on a rapid cycle of seasons, collections, and styles, demanding agility and innovation from brands to stay ahead. This constant state of flux requires fashion businesses to be incredibly responsive and adaptable, leveraging technology to keep pace with market demands. SAP has always been a key player in providing ERP solutions tailored to the needs of the fashion industry. Recognizing the unique demands of fashion, SAP introduced SAP Apparel and Footwear (SAP AFS) in the late 1990s, which was built on top of R/3 and then ECC. AFS accommodated fashion-specific industry needs to handle style variants, seasonal collections, and ways to respond to the manufacturing nuances of Fashion, but it still relied on heavy customization to meet the individual fashion customer’s business objectives. Moreover, vertically integrated fashion businesses encountered substantial challenges by relying on multiple ERP systems such as SAP IS-Retail. These companies had to rely on SAP AFS for their manufacturing and wholesale divisions and on SAP Retail for their retail business, resulting in fragmented data and operational management. This approach often led to data silos, integration complexities, heightened IT infrastructure demands, and increased operational costs.

The introduction of SAP S/4 Fashion and Vertical Business marked a transformative shift by consolidating all functionalities into a single, integrated ERP platform. By unifying wholesale, retail, e-commerce, and manufacturing operations, SAP S/4 Fashion enhances data coherence, streamlines processes, reduces costs and enhances agility. Leveraging advanced analytics and machine learning in S/4 Fashion, brands can predict trends, optimize their inventory, and deliver personalized experiences that delight customers. The platform’s ability to integrate all aspects of the fashion business—from production to sales and customer service—ensures a seamless and efficient operation, ultimately driving growth, profitability, and agility to respond to market and consumer demands.

Why SAP S/4HANA Fashion for Intelligent Enterprises

The key drivers for adopting S/4HANA Fashion will vary from company to company. Most include business agility, digitization of stores, IoT, virtual reality, intelligent planning, sustainability, and seamless user experience. SAP S/4HANA provides a great opportunity for fashion businesses to run a unified platform for all channels. It offers a single global inventory, harmonized processes, and newer features like Advanced Available-to-Promise (aATP) and supply protection. These lead to reduced safety stock, fewer retail stock-outs, and increased profitability.

Below are some of the most important features that make S/4HANA for Fashion an essential tool for fashion and retail enterprises:

• Seasons and Theme Management: S/4HANA Fashion seamlessly categorizes products into seasons, collections, and themes, optimizing inventory management, seasonal reporting, and operational control, meeting market demands effectively.
• Flexible Purchasing Commitments: Adaptable purchasing approaches in S/4HANA Fashion aggregate commitments and defer decisions on product specifics until needed. This improves responsiveness to market changes and reduces inventory costs, through timely booking of manufacturing slots.
• Demand-Supply Alignment: Intelligent tools analyze demand patterns and match them with available supply, optimizing inventory levels and ensuring timely order fulfillment.
• Supply Protection Strategies: Robust strategies in S/4HANA Fashion reserve stock strategically, minimizing stockouts and maintaining high service levels during peak demand for your priority customers.
• Product Segmentation: Beyond traditional attributes such as style, color and size, S/4HANA Fashion supports segmentation based on origin and quality, enabling tailored inventory strategies to meet diverse market needs effectively.
• Integrated Manufacturing Capabilities: Seamless integration of manufacturing operations—from planning to production and sourcing—enhances efficiency, reduces costs, and improves overall supply chain performance.
• Enhanced Fiori Transactions: Specifically designed for Fashion allowing their large volumes of transactional and master data to be managed or changed quickly and efficiently with out of the box mass change and upload tools.

Getting to S/4 Fashion – Is Brownfield Really Not an Option for AFS Customers?

The transition to SAP S/4HANA Fashion is a significant undertaking, marked by the promise of advanced capabilities, streamlined processes, and a robust platform for innovation. Customers typically select from two main migration options: converting their existing system with the brownfield approach, which retains all current customizations and data, or opting for the greenfield approach, which starts the implementation process from scratch. However, due to significant underlying architectural disparities between AFS and S/4HANA, SAP will tell you that a brownfield migration is fundamentally impractical for fashion businesses. For a brownfield migration to work, the source and target systems must have compatible data models and tables. The architecture and the underlying data models of an AFS system differ from that of S/4HANA for Fashion. This is mainly because SAP did not build S/4 Fashion as an extension or an improvement of the AFS system. Instead, S/4 Fashion was built with S/4 Retail as the core; hence, its architecture is more closely aligned to retail. Consequently, fashion businesses on AFS generally view a greenfield implementation as the only viable path to S/4HANA Fashion.

However, at Applexus, we are able to offer AFS customers a whole new approach that enables them to selectively migrate to S/4HANA Fashion Vertical, without necessitating a greenfield approach.

SAP AFS to SAP S/4HANA Fashion Migration with CeleRITE’s Selective Transition Approach

Our comprehensive AI-powered platform, CeleRITE, is specifically designed to address the diverse needs of S/4HANA migration projects. Let’s explore the CeleRITE approach in detail to understand its implications and determine the optimal path for an AFS customer. For fashion brands transitioning from AFS to S/4 Fashion with CeleRITE, the process unfolds in three strategic steps:

• Lift & Shift: Initially, CeleRITE facilitates the migration of processes where the shift to S/4 Fashion involves minimal adjustments. The key difference between AFS and S/4 Fashion is the use of J tables in AFS which mostly impacts the fashion areas, especially the material grid and anything that references those material grids. However, there are still other areas that don’t use J tables, for instance finance – journal postings, GL, accounting practices, etc., remains untouched. CeleRITE can facilitate a direct lift and shift of these to S/4 Fashion.
• Enhance: Then there are some areas where mapping can be done between the elements in AFS and those in S/4 Fashion. For instance, the key characteristics of the material grid in AFS will map into the generic articles and variants in Material Masters in S/4 Fashion. Elements from the J tables can be mapped, enhanced, and moved to S/4 Fashion’s Generic and Variants tables, with CeleRITE leveraging Generative AI to streamline the process.
• Activate New S/4 Capabilities: Finally, CeleRITE, with our functional experts, identifies and activates new, industry-specific functionalities within S/4 Fashion using a fit-to-standard approach. This includes functionalities not available in AFS, such as flexible purchasing commitments, direct ship flexibility, and multi-level purchasing contracts, among many others. These strategic activations ensure S/4 Fashion operates at its full potential, to enhance supply chain management and operational agility. They potentially replace some custom developments from previous systems as part of the Selective Transition approach.

The migration to S/4HANA Fashion is not a one-size-fits-all approach. CeleRITE’s comprehensive toolset provides AFS customers with an alternative to the traditional Greenfield approach. With CeleRITE, AFS customers can address their specific needs and goals through a flexible, cost-effective, and less disruptive path to S/4HANA Fashion. CeleRITE also accommodates fashion customers who have developed their own solutions beyond what SAP originally provided. CeleRITE manages these custom codes, preserving your competitive advantage, investing in valuable assets, and maintaining a clean core. Additionally, the CeleRITE platform provides significant savings of up to 40% on migration costs and timelines. As companies continue to adopt and innovate with SAP S/4HANA, the future of fashion looks brighter and more dynamic than ever.