Tim Hays Dr. Berg
Animal Health International, Inc. Comerit Inc.
© Copyright 2013
Wellesley Information Services, Inc.
All rights reserved.

What We’ll Cover …
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Introduction to Animal Health International
Animal Health International goes to HANA
Animal Health International’s vision for Customer and Inventory
Stratification on HANA
Defining KPIs
Identifying Data
Designing the Solution
Wrap-Up
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Animal Health International
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Animal Health International, headquartered in Greeley, Colorado, is the premier animal health company and a leading distributor of production and companion animal health products
85 locations; Over 500 sales representatives
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Animal Health International
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80,000 Customers
Large and Small Animal Veterinarians, Producers and Retailers
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Companion Animal, Equine, Beef, Dairy, Poultry and Swine
85,000 SKUs sourced from over 2,000 Manufacturers
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Pharmaceuticals, vaccines, diagnostics, equipment, software, pet foods, devices and other animal health supplies
Call Centers, Distribution Centers, Retail Stores, Mobile Stores
(Trucks), B2B E-Commerce
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What We’ll Cover …





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Introduction to Animal Health International
Animal Health International goes to HANA
Animal Health International’s vision for Customer and Inventory
Stratification on HANA
Defining KPIs
Identifying Data
Designing the Solution
Wrap-Up
4

2013 Infrastructure before HANA
 2013 Landscape before SAP HANA
• SAP ERP 6.0 EhP6
• SAP BW 7.3
• Virtualized on HP-UX, DB2 v9.7
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Next generation SAP Real-time Data Platform
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Installation of SAP Hana
 June 2013 – Go-Life with BW 7.30 on Hana
 Actual migration of environment took 5 weeks
 Prepping the BW on DB2 system took 3 month
 Rolled out SAP HANA Studio and Data services
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BW 7.3 on HANA Landscape
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Reducing the layers and complexity
Application Services
Planning
Real-time Replication
Structured
OLTP
UI Development tools
Predictive/Statistical
Batch ETL/ELT
Unstructured
OLAP
SAP HANA
Row/Column store
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What We’ll Cover …







Introduction to Animal Health International
Animal Health International goes to HANA
Animal Health International’s vision for Customer and Inventory
Stratification on HANA
Defining KPIs
Identifying Data
Designing the Solution
Wrap-Up
10

AHI’s Stratification Vision
Customer Stratification:
Method of stratifying customers into key groups to improve process and relationships.
Example: Silver, Gold, Platinum customer status (hotel, airline industry)
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AHI’s Stratification Vision
Common Practice
1.
No defined customer stratification
2.
Customer groups based on market type or product line
3.
Top customers based on revenue or gross profit
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AHI’s Stratification Vision (cont.)
Good Practice
Based on more than one factor
1.
Volume [sales $] based
2.
Gross margin
3.
Business potential
4.
Includes lagging and leading indicators
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AHI’s Stratification Vision (cont.)
Best Practice
Based on many factors
1.
Business potential
2.
Profitability
3.
Customer loyalty
4.
Cost to serve
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AHI’s Stratification Vision (cont.)
The vision is defined by the questions being asked
CEO
How can I increase Profit Company wide ?
Sales rep.
Which
Customer should I pursue?
Sales manager
Which
Customers are most profitable?
Plant manager
How much should I purchase?
When?
Marketing manager
How can I increase brand loyalty?
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AHI’s Stratification Vision on HANA
Why Hana ?
1.
The first time we are able to analyze the necessary data volume needed for stratification (e.g. 700.000 records daily for stock data married up with Copa data)
2.
Gives us the flexibility to have near real-time reporting if necessary
3.
Reduced reporting response time by over
30 % allowing us to include larger user community
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What We’ll Cover …







Introduction to Animal Health International
Animal Health International goes to HANA
Animal Health International’s vision for Customer and Inventory
Stratification on HANA
Defining KPIs
Identifying Data
Designing the Solution
Wrap-Up
17

Lagging and Leading Indicators
Important indicators
You decide which ones are most important to you and concentrate on those
Buying
Power
Customer
Loyalty
Cost to
Serve
Customer
Rebates
Profitability
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Customer Ranking define your ranking criteria
Status
Elite Customer
Premium Customer B
Core Customer C
Base Customer
Casual Customer
D
E
Rank % of Customers
A 8%
20%
44%
20%
8%
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What We’ll Cover …

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




Introduction to Animal Health International
Animal Health International goes to HANA
Animal Health International’s vision for Customer and Inventory
Stratification on HANA
Defining KPIs
Identifying Data
Designing the Solution
Wrap-Up
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SAP Data Sources
Initiate a data reconnaissance effort
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Data you have in ERP but not yet available in Data Warehouse
• Data ready to report on in Data warehouse (might need some remodeling)
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Data coming from entirely external data sources (in our case governmental websites containing Agriculture statistics)
SD
MM ERP Data
Government,
Social
3 rd
Party
CRM
BPC
COPA Financial
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Opportunity Data find data relevant to you
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Data Challenges
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Multiple sources of Internal data
More than one ERP system
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More than one CRM platform
Data is not collected congruently
Rebates, chargebacks, net-downs impact sales revenue and profitability calculations
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3 rd party data is hard to correlate
No common key between internal and external data
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Dataset is too large to process with available tools
85,000 products * 80,000 customers * 400 plants
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It Starts with the Data
Data
Analytics
Stratification
Views
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Stratification Views
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Inventory, Copa and external statistics data are the building blocks of AHI’s Stratification solution
Based on this data we have Customer ranking reports,
Inventory ranking reports, Sales Penetration reports and Profitability reports
Sales
Penetration view
Customer ranking view
Data
Inventory
COPA
External Statistics
Inventory
Ranking view
Profitability
View
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What We’ll Cover …







Introduction to Animal Health International
Animal Health International goes to HANA
Animal Health International’s vision for Customer and Inventory
Stratification on HANA
Defining KPIs
Identifying Data
Designing the Solution
Wrap-Up
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Example: AHI’s Inventory Stratification
Inventory Stratification:
Method of stratifying inventory (items/SKUs) into high and low performing groups.
Example: A B C D
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Inventory Stratification
Average Inventory
____________________________________
Gross Margin
Count of
Order Lines
Sales as % of Total Sales
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Inventory Ranking define your ranking criteria
Rank
A
B
C
D
% of Total
60%
20%
10%
10%
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Inventory Stratification
Stage Inventory snapshot data for amount and value on hand per plant
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Inventory Stratification (cont.)
COPA data staged
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Inventory Stratification (cont.)
Combine Inventory Snap Shot with COPA data
Inventory Stratification Reporting Level
COPA
Invoice level
Inventory
Snapshot
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Customer Stratification
Apply algorithms to basic data and populate Stratification staging DSO
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Inventory Stratification
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Inventory Stratification Demo Using HANA
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Business Adoption
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Education
Sessions for Business and IT
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Executive sponsorship
This cannot be an IT or Marketing project, it must have highlevel support
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Create a cross-functional project team
Marketing

IT

Sales
Tie to incentive programs
Make it a game
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Customer Stratification
HANA R – K Means
HANA R – Decision Trees
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What We’ll Cover …







Introduction to Animal Health International
Animal Health International goes to HANA
Animal Health International’s vision for Customer and Inventory
Stratification on HANA
Defining KPIs
Identifying Data
Designing the Solution
Wrap-Up
37

7 Key Points to Take Home
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Stratification is critical to understanding customer and inventory performance over time
Customer and inventory stratification methodology will require business adoption to be useful
Available data will determine starting point for ranking criteria
Acquiring quality data can be a challenge
Ranking customers and inventory with limited data set is better than no ranking at all
Stratification can be a big data problem requiring tools like HANA
Business adoption will require education and an implementation plan
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Where to Find More Information
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 www.naw.org/publications/pubs_item_view.php?pubs_itemid=145
Customer Stratification Overview
 http://id.tamu.edu/intensive-customer-stratification-program
Texas A&M University Education
 http://events.sap.com/sapphirenow/en/session/2371
Gray Bar utilizing HANA for Customer Stratification
 www.sap.com/asset/index.epx?id=aaff7f67-7400-490e-a800ad08f4f1eb09
SAP Customer Value Intelligence Overview
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Your Turn!
How to contact us:
Tim Hays
Tim.Hays@AnimalHealthInternational.com
Dr. Berg bberg@comerit.com
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Disclaimer
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