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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