IT5 S2 SAP Distribution Solution

SAP Distribution Management solution

Retail IBU May 2012

Strictly Confidential

Distribution Management system - Expectations • Support Growth through More Stores, Better Stores, Better Service • One repeatable scalable model • Enable sustained leadership thru General trade and Modern Trade

Perfect Execution

Next Generation DMS Retailer

Better insights

Information Command & Control

Perfect Instructions

Retail Execution

Perfect Execution Higher Quality Feedback

Orders Stocks …

How will SAPDMS deliver benefits? Less out of stock at outlet

CPG Principal Processes

Better service to outlets

Distributor Stock Management Distributor Order Generation(CRS) Distributor Order Fulfillment (Primary sales) Trade Promotions Invoicing from CPG company PO and Payments in DMS

Standardized Distributor Processes Integrated with CPG Principal processes Distributor Processes PO and Payments in DMS Outlet Servicing ( Secondary Sales) Claims Processing Standard Reporting Com munication Connectivity IT System Capabilities Financial m anagement capabilities Damage and shortage goods handling

Superior & Consistent execution

Flexible business Model allowing Rapid expansion, Merging, opening Closing of distributors etc

Less wastage for CPG Company Stock Efficiency at distributor & CPG company Better productivity of distributor & salesman Better coverage

Minimize information losses during changeovers …and legacy systems may not be robust enough to handle demands of the business

Technology for hosted DMS – Own Distributor ‘s / shared dealer network Cloud Hosting

Distributor

CPG Company Processes

Good connectivity

Mandatory Operational link

SAP ECC APO CRM TPM

Mandatory Strategy links

Business Planning Systems

S A P P I

CPG Distributor Management system Processes

Distributor Poor connectivity

SAP Retail on ECC6.0 Claims/ Incentive management Sybase unwired platform Non Exclusive Distributor

SAP PI

Third Party DMS

Data Warehouse

Offline Inbound

A Day in the Life Of….. CPG Company

SO Data syn

Assortment Management

Master Data

Sales Pricing

Data syn to HHT

Master data syn via Pricat

Sales Order

Requirements Planning Reporting

Promotions

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Allocation

Inventory Management

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SAP Distribution Management solution - Key enablers 1.

Master Data Management Design suits the requirements of FMCG Distribution business. Integration Frame work available (Principal, Distributor, Retailer- Pricat tools). Ease of maintenance thru reference data and mass maintenance tools. Terminology suits the Distribution business store or Distribution centre instead of plant, and article instead of material. • Article categories like Single, Generic, Sales set,Prepack, are suited to meet distributors requirements to manage SKU’s to suit the needs of retailers • • • •

2.

3.

Assortment and Listing •

Assortment management helps manage the product or product range relevant for different sets of distributors. Reference assortments makes it easy to maintain

•

Listing enables easy on boarding of new distributors , Extend article ( Material) master views for the new distributors .

Pricing • Retail pricing engine suits the requirement of managing pricing calculation • Ref pricing at Dist chain makes it easy to maintain prices • Price lists, site specific / Dist chain are easy to manage and deploy

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SAP Retail Distribution Management solution - Key enablers 4.

Allocation for new products and Consumer promotions. •

5.

6.

Key Account Management – Category management •

Multiple hierarchies/ Version management/ Define Category goals evaluate their performance in BW.

•

Use the layout module to create model shelving plans for modern trade and evaluate the compliance. Create competitor articles in the system to use them in the shelving plan. Standard SOA packages available to integrate Layout modules to Space management tools to deploy planograms.

Promotion management •

7.

Bonus buys definition makes it easy to model special kind of promotions

SAP Retail store / In store Merchandise and Inventory Management •

8.

Allocation tool available as part of the Retail fits the requirement of Allocating stocks for new products, consumer promotions to customer, customer groups, Salesmen.

Easy to use interface for the distributor users

Standard ECC6.0 functions – Lean WMS, Physical inventory, Consignment, Advanced returns management ( Customer Vendor) are available

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Coverage Management

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© SAP 2010 / Page 8

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Site Master Site Classification

Store

Distribution Centre (HQ) Store

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© SAP 2010 / Page 9

Store Distributor Branch

Van Sales

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Grouping of Customers

Modern Retail Modern Retail

Store Store Drug Pharmacy

Store Drug Pharmacy

Modern Retail

Drug Pharmacy Drug Pharmacy

Store Store

© SAP 2010 / Page 10

Modern Retail

Store

Assigning and extending customers to different distributors and branches

customer K customer B

customer H

customer A customer F

customer J

customer G

customer D

customer C customer I customer E customer L

Swastik

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CG Marketing

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PJP CDR Permanent Journey Plan

PJP Delivery Permanent Journey Plan

Sending zone

Receiving zone

Route

Zone (Warehouse)

Zone1

Route1

Zone (Warehouse)

Zone2

Route2

Zone (Warehouse)

Zone3

Route3

Zone (Warehouse)

Zone4

Route4

The warehouse (site master) and the customer (customer master) will have zone codes assigned to it. The zones will be used to determine the route the delivery shipments will take to deliver the stocks to the customers

Van sales – Van as a storage location of the site customers that are covered by salesmen and outlets covered by Vans are mutually exclusive Based on the running rate of the outlet, for the outlets to be visited the goods are loaded from the warehouse into the trucks Once the visits to all the outlets are over the van returns to the warehouse where are all the orders are entered into the system Stocks that could not be sold during the visits are unloaded from the van and are either moved to the ‘sales’ storage location or the ‘damaged’ storage location

Site Sales

Damaged

Loss

Van

Site

WM active VAN 1

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Scrap

VAN 2

VAN 3

Storage location Storage bin Strictly Confidential

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Allocation – New product Launch, Promotions - PUSH Purchase Order Allocation Table

Distributor

Art

Salesman

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© SAP 2010 / Page 15

Salesman

Principal

Art

Art

Salesman

Branch

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Allocation Strategies

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Pricing Structures

Pricing Hierarchy: Company Regional Grouping Zone Store

Validity Date Triggered Customer Specific Prices Layered in discounts or surcharges

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© SAP 2010 / Page 17

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Price Methods & Rules

Price Methods: Quantity based BOGO – Buy One Get One % Off Scaled Retail Pricing Coupons

Rules Based Pricing/ Promotion Family /Spread Family Pricing Competitive Pricing Planned Margin Rounding

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© SAP 2010 / Page 18

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Closed Loop Process Portal provides capability to have Principal create Contracts

Workflow based Approvals

Create Contract Analyze Balances against Marketing Activities

Approve Contract

Analyze Profitability

Set Claim Terms

Reconcile and Settle

Record Marketing Event

Record Marketing Event in SAP

Inbound Response

Send Claim to P&G

Send Claim to Principal electronically

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Calculate Claim

Real-time Tracking of Claims

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SUP Connecting to SAP Applications

Create Eclipse

SAP Distribution Management solution

Consume heterogeneous mobile devices

SAP CRM Marketing SAP Loyalty/Couponing

SAP mPayment SAP Web Channel Non SAP SAP HANA for Analytics Segmentation etc. Precision Retailing

BlackBerry

Sybase Unwired Platform

Mobile business objects

iPhone iPad

Container applications

Windows Native applications

Windows Mobile

Management console

Control Device and server management and security

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User Interface for Distributor staff

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In-Store Merchandise and Inventory Management – Guided Procedure Reduce Total Cost of Ownership and Increase Customer Focus Business benefits: It guides the user throughout the business processes, such as Store Order or Cycle Counting, back and forth in simple steps that makes the solution easy to learn and to train.

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Distribution Customer using SAP Distributor Management Solution

Challenges: • Master data migration. • Change management and training Goals: • Increase customer service • Improve Sales team productivity • Drive volume & margin with greater up sell Benefits: • Online tracking of the distributor fill rates • Effective promotions • Better turnaround of Claims • Single source of truth

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Thank You!

Contact information: Bharani Krishnan Trade Industries mailto: [email protected]

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