trade promotion optimization preparing for the...

Trade Promotion Optimization Preparing for the Future

Agenda

• Accenture CAS TPO – Preparing for the future – Understanding the market – Dimensions of TPO Success

– Optimizing promotions and account plans

– The journey continues • Dr.Oetker UK / Ireland – Starting the TPO journey

– Company information

– Base situation & requirements

– Solution & project – Learnings & outlook

2

Accenture CAS TPO

Preparing for the future

Understanding the market

4

While companies have made progress with TPO efforts, they often do not realize anticipated benefits. […] Companies that successfully implemented TPO spend less time and fewer resources gathering data and make better use of trade funds due to greater visibility to ROI*

Lost sales due to forecast

accuracy

Inefficient trade spend

Ineffective trade spend

Disconnected processes

Lack of retailer collaboration

Risk adverse manufacturers

Resource scarcity

Industry challenges

*Promotion Optimization Institute / Accenture (2011): Charting your course to Trade Promotion Optimization, page 4.

Dimensions of TPO Success

5

Analyze sales data

6

Chris, Business Analyst

I need to analyze sales data to get

insights for modeling.

Monitor model accuracy

7

Chris, Business Analyst

83,5%

88,8%

95,6%

91,2%

I need to monitor model accuracy to

change or tune models if required.

Optimize promotion

8

Predicted uplifts

Optimize account plans

Predicted uplifts

Cannibalization

Dr. Oetker UK / Ireland

Starting the TPO journey

Dr. Oetker

CRYSTAL BALL ACCENTURE CAS TPO/TPM

@ DR.OETKER UK

Dr. Oetker

1 Company Information

2 Base Situation & Requirements

3 Solution & Project

4 Learnings & Outlook

May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 12

Topics

Dr. Oetker


The food division in the Oetker group

Food

Beer and Non-Alcoholic

Beverages

Sparkling Wine, Wine and Spirits

Shipping

Other Interests

Banking

Dr. Oetker


International presence

Dr. Oetker


Product lines (in Germany)

Dr. Oetker


Dr. Oetker (UK) Ltd. - Overview

Dr. Oetker


Topics





Dr. Oetker


Base Situation & Requirements

two old forecasting systems

two different processes

no automated interface to Demand Mm

excessive manual work

no system updates, old features

system performance problems

growing frustrations at users

does not meet today’s requirements

internal

High promotional share (up to 85%)~20 different mechanics

Promotions have high impact on profitability (average net price)

Seasonality and Events are becoming key to the Retailers

Highest IT investments in retail in new generation of forecasting systems

external

Dr. Oetker


External Challenges: Variety of Customer Activity

Seasonal events

Competitors

Call to action

Promotions on End Recipe cards Promotions on Shelf

Fixture Challenges Changes to our plan?

Dr. Oetker


Topics





Dr. Oetker


Joint Planning Approach (Closed Loop)

Dr. Oetker


Business Planning Detail

Base Data Baseline Plan Promotion Plan

Maintain standard data customer prices and long term discounts

Check automatic prediction and

amend if required

Add/maintain promotions and review

Financial View

Review account plans and full year finishing position against targets

Dr. Oetker


Business Planning - 1 Base Data

● Planning Customer hierarchy

● Products & Productgroups

● Prices & Conditions ● Historic Sales &

Promotion data

Dr. Oetker


Business Planning - 2 Baseline Planning

● Predicted Baseline(weekly update)

● manual adaptions incl. mass changes

● new products startup

● change comments

● Scenario Planning

Dr. Oetker


Baseline Prediction Detail

● based on shipment data

● historic invoicing data from SAP ERP / BW

● regular sales & promotional sales

● predict future with trend

Dr. Oetker


Business Planning – 3 Promotion Planning

● different types and tactics

● volume uplift

● calculations also on promo level

● easy Promotion evaluation

Dr. Oetker


Trade Promotion Portal Detail

● graphical overview

● full business plan handling

● different types and tactics

● variable filtering, assortment view, account view

Dr. Oetker


Business Planning – 4 Financial Details● calculation of

relevant figures

● real-time calculation

● different levels: Product, Prod.Group, Total

● full year view (actuals + plan)

Dr. Oetker


The project – some figures

Dr. Oetker


Topics





Dr. Oetker


User feedback

We are delighted by the possibilities for analysing and monitoring

our actual sales situation.

System is easy to use. Data canbe entered fast, compared to our

old solutions!

Dr. Oetker


Effects (now with running system, only rough excerpt)

Sales

Real-time information

Continuous alignment to Account Strategies

Greater visibility of financial impact of

decisions

Central point of truth

Management

Enables smoother Budget & Estimates

process

Allows target monitoring & corrective action

Combines actual and forecast data to give a

full year picture.

Supply Chain

Improved Promotion Management

More reliablevolume information

Allows up to date data to be used in any ad hoc

work.

Dr. Oetker


Learnings & Outlook

● available Business Personal is key

● “It is never finished” - It is a constant change and improvement work.

● Clean Planning Structures& Data quality

● Building trust for automatic prediction

TPOOptimize planned promotions and full promotion programs as further improvement

External data Integrate available external data, as EPOS, Nielsen, IRI to improve prediction results and reporting

trade promotion optimization preparing for the...

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