POI Certified Collaborative Marketer™
Speaker: Richard Mayers
Advanced Account Planning
Mars Chocolate NA
© 2012 Oracle Corporation – Proprietary and Confidential
In the typical Retailer / Vendor relationship
there are no big winners
Sources: Consumer Goods Technology/AMR Research/AT&T, “2008 Sales and Marketing Report,” June 2008; Oracle Insight Analysis.
Lack of Collaboration
For The Retailer For The Vendor/Supplier
• Vendor fails to supply sufficient inventory in
the right locations to support business plan and
product promotions
• Slow moving inventory taking up valuable
space
• Decreased customer satisfaction
• Out of Stock encourages shoppers to shop at competitors’ stores
• Direct loss of store loyalty
• Operational costs are increased through
personnel looking for OOS items in back room,
providing “rain checks” to shoppers, unplanned
restocking, etc.
• Lack of visibility to retail inventory and point of
sale information
• Poor store execution – 59% of merchandising
campaigns executed in intended fashion
• Planogram compliance at 30% in NA and EU
•OOS encourages trial of competitor products
impacting brand loyalty – Second Moment of
Truth
• OOS increases overall costs of the relationship with the retailer
•Exposed on risk of retail inventory = Price Protection
© 2012 Oracle Corporation – Proprietary and Confidential
What is Demand Sensing?
• Demand Sensing is the
translation of downstream
data with minimal latency to
understand what is being
sold, who is buying the
product, and the impact of
demand-shaping programs.1
1AMR Research (Gartner), March, 2007© 2010 Oracle Corporation – Proprietary and Confidential
© 2012 Oracle Corporation – Proprietary and Confidential
Benefits from Joint Value Partnership
Advanced collaboration tools enable a symbiotic relationship to be formed between the Retailer & OEM Vendor
Benefits received by BOTH partners include:
• Profitable Revenue Growth
• Inventory Reduction
• Asset Optimization
© 2012 Oracle Corporation – Proprietary and Confidential
• Category and Space Planning
• Demand Management
• Trade Promotion Management
ALIGNED PRIORITIES
• Jointly managed store and SKU-
level merchandise plans
• Optimized promotion and
merchandising decisions
• Total supply chain logistics and
transportation cost reduction
• Item and price data synchronized
to reduce deductions
• Transportation & Logistics
• Retail Execution
• Vendor Managed Inventory
Traditional view of relationship
RetailerManufacturer
RetailerManufacturer
Sh
are
d
Emerging relationship
Retail facing applications
Joint Value Partnership
The Challenge
•Do More with Less
– Increase GSV & Profit Growth
– Increase Market Share
– Maintain or Reduce Trade Spend
Shift effort: Gathering to Analyzing
Improve Collaboration: Field & Office = Execution
Earlier Visibility: Plans & Gaps = Fast decisions
Integrated tools: Better Adoption = Efficiency
Modeling in Field: Better Forecasting = Smaller NQC; Lower Inventories; Higher service levels
How the Right Tools can Help
Previous Mars Environment Used Siebel for Planning & Trade Management
Modified it for a Promoted/Non Promoted model
No integration of IRI data; No “What-if”
McKinsey tool for Pre/Post Evaluation & ROI metrics
Spreadsheets/In-house Tool for Total Volume Tracking
Indirect Volume process tied to company shipments for small set of indirect customers
Manual collection of Year End Estimates & promotional impacts
Why the Planning Initiative?
• Lack of true sales planning capability:
Not a planning tool, simply place to capture data
Tedious & difficult input reduces value added time
Limited data visibility & ease of aggregation
Validity & quality of data in doubt
Multiple requests to field for „routine‟ information/data
• Low Sales adoption led to using center of excellence for
doing data inputs
• Economy & Cost of Goods pressures driving need for
more Efficiency & Accuracy in Customer Promotions
Bringing it All together
Implement DSR (Demand Signal Repository) to:
Bring together Warehouse withdrawals, IRI & shipment data
Harmonize consumption based data with shipment data
Integrate with Category Leadership & Others
Inclusion of POS Data in planning, forecasting & evaluating
Provide robust data for reporting
Join 2 Oracle Products to deliver 1 powerful planning toolSiebel used for CRM, Payments & Deductions
Build on existing SAP integration & for Discounts
Use Analytics expanded for greater reporting
Demantra used for Modeling; Planning & Simulation
Integration of Sales Force ROI Capabilities
Retirement of Spreadsheet Bridges, Brand Plans & Period Calls
The Need for adding a DSR
Planning needs data variety for best learning & variety
needs harmonization
DSR projects need coupled with Bigger efforts for funds
If you build it they will come & TCO Savings will happen
Make Rules; Expect inaccuracy; Be consistent
Planning; Forecasting; Analyzing bring on feelings of
exactness but are directional at best
Start small; Estimate data validation then double it
You see the Faucet but invest in the plumping meaning
Reporting looks cool but the foundation makes it work ry
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The shape of Planning: Today and Tomorrow
Systematic roll up of data across
hierarchies; between packs &
brands
Spread Sheet tracked plans &
estimates aggregated through
submission process
Field generated forecast
based on manual analysis
System (Modeled) generated
base & incremental forecast
Disparate & manual ways of
customer planning
Connected promotional & total
volume plans
ROI analysis performed for a
limited number of customersSystem generated pre & post
event ROI for all funded
accounts
Previous State Target State
Prior State Planning at MarsBudgets are provided to over 300 accounts Promotion planning in detail for 60+ accounts Events captured for 50+ additional accounts ROI is measured for 30+ accounts (50 in 2011)
Manually process support all remaining Chocolate & Frozen accounts
Pain pointsNo consistent approach to planningLagging visibility to aggregate plansManual process to role data upNo real time view of progress to planLimited visibility to many account specific
events
Target State Planning at Mars• Full planning capability for all budgeted
accounts• Aggregation of data – pack & brand• Real time view into planning gaps,
changes & year-end estimates• Goal - Improve Sales EffectivenessImprove collaboration with front officeMore Effective use of trade fundsIncreased customer forecasting accuracySingle way of planning across MarsEqual access to trade funds analysisGreater number of Accounts Planning
Organizational Changes NeededChanges to Ways of Working:
• Larger role for help desk support - field & brokers
• Demantra/Siebel Administrator role driving usability
• Modeling & assumption support for creating base
• Expanded liaison role with Demand Planning
• Increased emphasis on reporting & training
Benefits
Ensure timeliness of planning
Closer Collaboration with
Demand
Increased user acceptance
Improve accuracy of sales
inputs
Analytics
Manager
Development
ManagerSales Operations
Lead
Siebel / Demantra
Administrator &
Support Line Analyst
(2)
Customer
Demand Planner
(5)
Demantra Data
Integration
Analyst
(new)
Analytics Analyst Sales Application &
Reporting Support
Quota Analyst
Change Management
& Communications
Manager
Siebel / Demantra Trainer
Functional Expert
Sales Lead
More then Half of Mars Top Customers are indirect
including: Target; Wal-mart; Sam‟s & K-mart
Military purchasing process fits indirect buying model
Specialty Markets Growing in Importance
Small Outlet has Large important indirect customers
like: 7-Eleven; Exxon Mobil; Raceway
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Planning Indirect a constant @ Mars
Data available from: McClane; C&S; Eby
Brown; Core-Mark; Hackney; Vistar &
others
Basic Questions to Ask when
considering Indirect Customer
1. Where do you manage the bulge
2. Do you tie to your shipment forecast
3. Who is accountable for what
4. How do you handle the disparate time frames?
5. How low do you go & get value?
6. Can you afford the data? Can you afford to Clean it?
7. How do you align promoted timing between retailers
& resellers?
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Managing
the Volume Plans & Accountability
• Warehouse Withdrawal Data Drives Retailer Planning
Fed into modeling to generate base & incremental
Provided as actual shipments for accuracy & ROI
Lagged when debiting the reseller shipments
Indirect Customer planning separate from
operational plan
Indirect Customer plans used to discuss reseller
impacts on operational plan
Reseller teams accountable for supply efficiencies;
ordering & all other volume including promotions17
Managing the inputs to Demand• Mars uses Source of Supply Processes for Planning
Volume stays with the retailer for planning
Volume added to the reseller for Demand
Volume shifted by stored lag
Exceptions captured through S&OP discussions
Extensive Reseller Reporting providing visibility to
manage customers operating efficiencies
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Key Learning Along the way
1. Withdrawal data exists for those who ask
2. Withdrawal data requires cleansing & dedicated
resources to make it work
3. All indirect planning has an inventory bulge & Sales
always wants the credit when it is in their favor
4. You have to disconnect indirect planning from the
operational model but connect it to the impact
discussions
5. There is a point of diminishing returns
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