Trade Promotion Management at PepsiCo
Weidong Song
SAP Solution Architect
PepsiCo, North America
]
[ You Already Know Us
Real Experience. Real Advantage.
2
[ The PepsiCo “One Up” Vision
Unleashing the power of information
to realize PepsiCo’s full growth potential
and “one up” the competition
Real Experience. Real Advantage.
3
[ Our North American Journey
RELEASE 1
RELEASE 3
RELEASE 5
RELEASE 7
Indirect
Procurement
Mfg & Logistics
Financials
ESM
Financial
Planning
Order to Cash
R1
2006
R2
2007
R3
RELEASE 2
RELEASE 4
Order to Cash
Integrated
Supply Chain
Planning
Real Experience. Real Advantage.
2008
R4
R5
2009
RELEASE 6
Trade - Funds,
Promotions & Claims
Financial Planning
Order to Cash
ESM Upgrade
R6
2010
RELEASE 9
Payroll
HR Enabling
4
[ Trade Spending Basics
Tradedowntime
Spending is fundamental
toimproving
the CPG
• Near-zero
• Managing and
• Business
intelligence
learnings
off-shore build
industry,
and
you see it every
dayquality
and development
• Fully integrated supply chain
• Single instance with only two
planning solution
PepsiCo
promote
our
company
codes spend billions to
• Business
integration
with
• Centralized
data management tools
creative governance models
products
and technologies
• Regression testing automation to
• Rapid supply chain field deployments
improve release management
The
execution
of
this
spend
involves
• Large legacy footprint integration
with no business disruption
incredible
attention
atcontrols
the and
event,
• Call
center capabilities
with CRM – to detail
• Improving
security
ESM
functionality and market level
with new SAP GRC capabilities
customer,
• Large BPS footprint and
• New industry standards in trade
implementation
promotions management
Accurate
information
about
trade
• Workflow
capabilities
best practices
• Multiple
major releases while
promotions
is a base requirement
• Phased
and big bang deployments
enabling a permanent COE
Real Experience. Real Advantage.
5
[ Trade Management –
A New Industry Standard
PEPSICO BUSINESS REQUIREMENTS
• Enhanced insights for
planning, provide basis for
optimization
• Improved trade accruals
• Improved budget
management
• Integrated claims based
settlement process
• Integrated analysis
and reporting
Real Experience. Real Advantage.
Customer Planning
& Forecasting
SAP BPS
Trade Funds Management
CRM – TFM*
Trade Promotion
Management
CRM – TPM
Trade Claims
Management
CRM – TCM
Billing, Pricing &
Financial Integration
SAP – ECC
Trade Analytics
SAP – BI
6
[ Enhanced insights for planning
Funds
Planning
Event
Planning
PRE-Event Analysis
POST-Event Analysis
Claims
Settlement
Real Experience. Real Advantage.
Event
Execution
7
[ Improved Trade Accruals
Utilize different accrual methodologies to ensure an appropriate trade accrual
Volume Based
Order
Invoice
Date Based
Sales Curved
Variable trade spends for indirect
ship customers & Fixed trade
spends are accrued on the
planned start date of the
promotion
Annual agreements (e.g.
growth payments) are
accrued periodically and are
smoothed over the
planned/forecasted sales
curve
Deliveries
Accrual
Variable trade spends for direct
ship customers are accrued as
deliveries occur
Event Level Accruals
Real Experience. Real Advantage.
8
[ Improve Budget Management
Manage Funds: Set the Budget
Create
Funds Plans and
Trade Funds
Develop
Fund Budgets
Adjust Fund
Budgets
Approve Funds
Automated
Manual
Close Funds
Fund
Budget:
$ _____
Reserved:
$ _____
Remaining
$ _____ (calculated)
Create
Fund Usage
Accrue
Settle
Balance
Fund Usages
Consume the Budget
Real Experience. Real Advantage.
9
[ Trade Claim Management Process Flow
ECC Financials
ECC A/R
G/L and CO-PA
Accruals/Expens
e
End to end cycle completes with settlement auto-clearing
deduction and closing Dispute Case.
Receivable
s
Deduction is
generated from
short payment.
CRM Claims Management
Claim Submission
Document (CSD)
• Financial
transactions are
recognized first in the
TFM ‘checkbook’ and
then in ECC
Financials.
• CSDs are copies of selected case
data; ensures linkage maintained with
ECC financials.
• CSRs capture trade promotion details
and fund availability.
Dispute Case
• TFM checkbook
reflects all settlements
as part of complete
fund usage picture
• Worksheet is the analytical tool for
CRM Pricing & Billing
performance validation.
Claim Settlement
Request (CSR)
• Dispute cases
created to clear
and track
deductions
• Analysts
identify trade
related
deductions
CRM Trade Funds
Management
Post
Validation Worksheet
Real Experience. Real Advantage.
Billing generates the
translation of the CRM
settlements into ECC financial
documents.
TFM
"Checkbook"
Expensed
Accrual Balance
$XXX
($XXX)
10
[ Benefits of Integration
Sales
Finance
• perform sales and
trade analytics
Sales
• plan and execute
effective customer
trade plans
BPS/ BI
Trade
Claims
Controlle
r Team
CFS
Trade
Management
Trade
Funds
Trade
Promotions
SAP ECC
• accurately report
income and related
expenses
Demand
Planning
• effectively manage
future inventory levels/
production schedules
Business
Units
Real Experience. Real Advantage.
• generate timely,
accurate trade
reimbursement to
customers
• achieve profitable
sales growth in all
planned markets
11
[ Provide Basis for Optimization
Trade Promotion Optimization (TPO) helps develop strategies that drive profit and growth
Strategic
TPO/TPE
Text
• Text
• Text
• Text
Operational
TPM
• Promotional mix analysis
• Evaluate Trade Promotion Effectiveness
• Regular and Promoted Sales Decomposition
• Predictive Forecast: baseline, uplift, etc
• What if modeling
• In Store Execution
• Link to forecasting
• Manage Trade Settlement
• Create Demand Signal
• Track trade promotion attributes
• Capture actual results
• Plan and execute Individual promotions
• Integration with marketing plans
TPM provides a foundation, it captures and tracks appropriate data
Real Experience. Real Advantage.
12
[ Transformed to Future….
TPE/TPO
• Powerful Trade
Analytics and
Forecast
• Trade
optimization
Real Experience. Real Advantage.
HANA
• Trade Planning
• Faster, Real-time
Analytics
• High speed Volume
decomposition,
simulation, prediction
Data Driven
Intelligence
• More third-party
retail, distribution
data analysis
• with HANA, TPO
•Demand Signal
Management
13
Thank You and
Good Luck with Your TPM Journey
Weidong Song
PepsiCo, North America
Weidong.song@pepsico.com
]