trevor barrett, manager premier foods uk confidential

Trevor Barrett, Manager – Premier Foods UK

Premier Foods “Optimization for Growth”

Enabling Focus on the Customer

Confidential

© 2013 SAP AG. All rights reserved. 2 Confidential

In This Session …

Following the

implementation of Trade

Promotion Management

(TPM) within Premier

Foods, this session

provides an insight into:

Our Approach to Trade

Promotion Optimization

Our business requirements

Our POC framework and

results


What We’ll Cover …

Premier Foods – Our

History

Trade Promotion

Optimization approach

POC - Framework

Wrap-up


Premier Foods

Our History

Click here

http://www.youtube.com/watch?v=DgtwM5pQXtY


Our History and Power Brands

With origins in the canned food industry, Premier Foods has continually expanded and

acquired new brands to become the UK’s largest food producer

In March 2007 Premier Foods completed the £1.2 billion acquisition of RHM along with

many of the UK’s best known food brands including Hovis, Sharwoods, Cadbury Cakes,

Bisto and Mr Kipling

Top 5 Customers – Tesco/Sainsbury/Morrisons/Asda/Co-Op

Gravy/Stock Deserts Sauce’s Soup’s

Cake Bread Sauce’s


Technology & Trade Promotions

SAP & Premier?

Premier Foods has been using core SAP in parts of it’s business since 2008

The Hovis Division had no SAP platform

Hovis – a perfect test bed for SAP TPM integrated with the SAP Orders to Cash

implementation

Hovis & Trade Promotions

Hovis (Bread) accounts for c £500m of Premier’s total turnover

Fresh products delivered daily (Product range is bread and other bakery e.g muffins)

Mainland GB and Northern Ireland operation

20+ manufacturing/ distribution sites across the UK

The Supply Chain operates 24x7 – most deliveries occurring overnight before 11am

8500 deliveries per day = 8500 invoices

Order cycles are short, typically within 24/48hrs of order receipt.

Approximately 60% of Hovis volume is sold “on promotion”, therefore

including SAP TPM integrated with SAP Order To Cash solution was key...


Premier – Our Business Unit Structure

Premier Foods

Cake Deserts

Grocery Desert/Source/Meal

Hovis Bread

Ambient Business

TPM Live




History

Trade Promotion


POC - Framework

Wrap-up


TPO Approach

Emerging business needs:

Improved Promotional planning (horizon

view)

Promotional Modeling capability (what if)

Collaborative execution (functional control)

Collaborative Margin Growth (focused

investment)

Logical next step ;

Build on TPM Capability

Validate SAP Trade Promotion Optimisation

Business Requirement

Focus on promotional scheduling

Validate what If“/Modeling capability

Understand optimization capabilities

Validate work flow approval

Usability based on

Simplified Screen orientation

Clear transactional ownership

Quality / acceptable outputs


TPO Approach

TPO Considerations ;

Numerous Optimisation tools

Hosted vs Internal capability (Technical)

Internal Capability (Resource)

Tactical opportunity

Strategic fit

Project scope ;

POC Validation

Data structure validation

Business Capability build

Trade Promotion modelling

Output validation

Fit For Purpose




History

Trade Promotion


POC - Framework

Wrap-up


Current Status

“Completing the Jigsaw”

Today 2013

Inconsistent behaviours

• Incorrect base data

• Disparate knowledge & insights

• Systems internally financially driven

• External data not readily available

• Create consistent behaviours

• Improve use of insights in forecasting

• Collate knowledge into 1 place

• Create robust base dataset

• Missing cannibalisation, Retailer impact , systemisation of modelling

• Simple user interface

• Usable by sales force

• Benefits from existing data set (i.e. retailer profitability)

No picture to follow, pieces scattered around &

some missing

Provide the picture, more of the pieces, still scattered around

System “enabler” required

Objective

“ to optimise the ROI from

promotional spend, to be

achieved through;

the right behaviours

with in the appropriate process

underpinned by a best in class

modelling, planning and

evaluation system

capability”


1

Promotional

Evaluation

Single ,

Robust Data

Set EPOS & IRI Data @

SKU

Volume Split - Base/

Event

Cannibalisation

Post Promo Dip

Competitor Activity

Scope of the 2013 Challenge

Scenario

Modelling

Retailer ‘lens’

Plan Versions

Aggregations

Guidelines &

Rules

Alerts

Views aligned

to role

1

Time

2 … 18

2

3

4

5

NAM View RGM View


Business Requirement

1

2

Plan

RGM – Planning Activity


Demonstration Planning Cycle

1

2

Plan

Plan

RGM - Promotion

Modeling




1

2

3

Plan

Plan

Plan RGM - Promotion

“What If” Scenarios

RGM - Promotion

Modeling




1

2

3 4

Plan

Plan

Plan

Plan

RGM - Promotion


RGM - Promotion

Modeling

NAM – Review

& Release




1

2 5

3 4

Plan

Plan

Plan

Plan

Review

RGM - Promotion


All Stakeholders -

Evaluation

RGM - Promotion

Modeling

NAM – Review

& Release


Do

(TAMMS/TPM)


Trade Promotion Planning Cycle

1

2 5

3 4

Plan

Plan

Plan

Plan

Review

RGM - Promotion


All Stakeholders -

Evaluation

RGM - Promotion

Modeling

NAM – Review

& Release


Do

(TAMMS/TPM)


Step 1 RGM – Planning Activity

Requirements

18 months rolling timeframe

Run what if scenarios changing the following variables :

– promotional mechanic, MSSP, Retailer funding

Holds live calendars in both internal & retailer years

Demonstration Steps ;

RGM reviews a Promotion Plan Agreement for a 12 month

period for Tesco UK in the marketing calendar

RGM uses pre-assessment dashboard to start to model some

scenario options by tweaking the Promo Mechanics, MSSP,

Retailer Funding etc

RGM Creates promotions from the list of prepared scenarios,

and adds them to the Agreement.

RGM Reviews the promotions for the agreement in a

calendar view ;

– Show retailer time periods and premier time periods etc

Plan


Promotional Scheduling

Add calendar/scheduled promo’s View


Step 2 RGM – Promotion Modelling

Requirements

Volume split between base and promotional

Modeling functionality to include following capability;

– cannibalization

– post promotional dip

– impact of competitor activity

Need full P&L view for both internal (PF) and external (Retailer)

System intelligence on best mechanics/ frequency/ discount

levels


RGM Opens the agreement and can see the Baseline and the

spikes from the planned Promotional activity

RGM can see the volume decomposition – Seasonality, Holiday,

Price Lift, Mechanic Lift, Cannibalization, Pre/Post Dip

RGM Reviews and flips the views of P&L for Retailer and

Premier in the table, then sees graphics

RGM saves the agreement

Plan


Baseline /Promotional Spike

Add agreement baseline/spike view


Step 3 RGM – Promotion “What if” Scenario’s

Requirements

Hold multiple versions of plans

System intelligence on rogue entry of uplifts or redemption

rates.


RGM Copies the agreement and confirms status of Promotion

Plan Agreement (i.e. – a firm promotion)

RGM Reviews the promotions for the agreement in a calendar

view

RGM Update’s a promotion from the suggested scenario list ,

then ender's that promotion and use’s the Promotion

Optimization capability to model scenarios and review the

mechanics, frequency, discount levels etc

RGM goes into the planning layout amends/validates rogue

entry of uplift and redemption rates etc

RGM Save’s / Update’s Promotion and Agreement

Workflow alert to inform RGM of update (tbc)

Plan


What If/Promotion Modelling


Step 4 NAM – Review & Release

Requirements

System intelligence on clash of overlapping deals or read across issues

Hold multiple versions of plans

Holds live calendars in both internal & retailer years

Modeling functionality to include following capability;

– cannibalization, post promotional dip, impact of competitor activity

Need full P&L view for both internal (PF) and external (Retailer)

System intelligence on best mechanics/ frequency/ discount levels


NAM sees alert from RGM around promotion plan to review

NAM Uses the calendar view to compare in split view the plans suggested

by the RGM .

NAM reschedules a promotion by a number of weeks and saves

(Promotion Overlap Alert appears)

NAM - Review P&L impact.

NAM then opens one of the promotions and reviews the volumes plans,

make some amendments and re-forecasts the individual promotion

NAM Changes status and releases promotion

Plan


Work Flow Approval

Add alert/schedule update


Step 5 All Stakeholders - Evaluation

Requirements :

Fund management – (inclusion of targets) and

tracking against these.

Systemise post evaluation

Create categorisation of performance into ABCD

style for simple understanding

Reporting functionality to deliver Project Alphabet

designed reports

Delivers both internal and external view

Tracking vs KPI’s

Supports Project Alphabet Management Review

process

Review


Promotional Planning & Evaluation Roadmap

“Completing the Jigsaw”

Inconsistent behaviours

• Incorrect base data

• Disparate knowledge & insights

• Systems internally financially driven

• External data not readily available

• Create consistent behaviours

• Improve use of insights in forecasting

• Collate knowledge into 1 place

• Create robust base dataset

• Missing cannibalisation, Retailer impact , systemisation of modelling

• Simple user interface

• Usable by sales force

• Benefits from existing data set (i.e. retailer profitability)

No picture to follow, pieces scattered around &

some missing

Provide the picture, more of the pieces, still scattered around

• Sophisticated modelling which uses multiple data inputs to create internal and external view

• Integrated into business processes

• Fit for purpose according to user capability

• Flexible & immediate reporting

All the pieces in 1 box with a picture to follow

2012 2014 2013


Month 1

Activity & Timeline

Month 2 Month 3

POC Business Requirements

Data Modeling (Business Checkpoint)

Business Validation (UAT)

Final Preparation

Go Live

TPO – 12 Week Project Plan




History

Trade Promotion


POC - Framework

Wrap-up


Lessons Learned

Clarify what and why you “want” or “need TPO

Validate that your plan is “doable” — Not over aspirational

Determine your technical strategy and data availability

Consider your business capability

Map out the functional impact

Validate the data structure

Validate TPO outputs

“Smarter - Faster - Simpler”

Promotion Optimization Institute Spring 2013

Summit

Questions?

Trevor Barrett

[email protected]


Where to Find More Information

http://www.sap.com/uk/solutions/business-suite/crm/brochures/index.epx

http://www.sap.com/uk/solutions/rapid-deployment/crm/index.epx




trevor barrett, manager premier foods uk confidential

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