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
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 13
The food division in the Oetker group
Food
Beer and Non-Alcoholic
Beverages
Sparkling Wine, Wine and Spirits
Shipping
Other Interests
Banking
Dr. Oetker
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 14
International presence
Dr. Oetker
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 15
Product lines (in Germany)
Dr. Oetker
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 16
Dr. Oetker (UK) Ltd. - Overview
Dr. Oetker
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 17
Topics
1 Company Information
2 Base Situation & Requirements
3 Solution & Project
4 Learnings & Outlook
Dr. Oetker
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 18
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
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 19
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
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 20
Topics
1 Company Information
2 Base Situation & Requirements
3 Solution & Project
4 Learnings & Outlook
Dr. Oetker
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 21
Joint Planning Approach (Closed Loop)
Dr. Oetker
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 22
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
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 23
Business Planning - 1 Base Data
● Planning Customer hierarchy
● Products & Productgroups
● Prices & Conditions ● Historic Sales &
Promotion data
Dr. Oetker
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 24
Business Planning - 2 Baseline Planning
● Predicted Baseline(weekly update)
● manual adaptions incl. mass changes
● new products startup
● change comments
● Scenario Planning
Dr. Oetker
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 25
Baseline Prediction Detail
● based on shipment data
● historic invoicing data from SAP ERP / BW
● regular sales & promotional sales
● predict future with trend
Dr. Oetker
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 26
Business Planning – 3 Promotion Planning
● different types and tactics
● volume uplift
● calculations also on promo level
● easy Promotion evaluation
Dr. Oetker
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 27
Trade Promotion Portal Detail
● graphical overview
● full business plan handling
● different types and tactics
● variable filtering, assortment view, account view
Dr. Oetker
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 28
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
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 29
The project – some figures
Dr. Oetker
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 30
Topics
1 Company Information
2 Base Situation & Requirements
3 Solution & Project
4 Learnings & Outlook
Dr. Oetker
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 31
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
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 32
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
May.2015 / Accenture CAS TPO/TPM @ Dr.Oetker UK / Martin Kompan 33
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