Charting Your Course Successful Navigation

Transcription

1 Charting Your Course Successful Navigation Ken Dickman Partner, Accenture Gary Singer Partner, Accenture

2 Survey Background Over 60 CPG manufacturers and retailers Nearly 80 individual survey respondents Food/beverage, retail, and wholesale organizations Focus on importance, usage, and impact of TPO 2

3 Executive Summary The industry is evolving quickly with large companies taking the lead All companies can build capabilities & deliver value Benefits to be realized are substantial Full benefits takes a holistic approach (people, process, technology) The key is just getting started!!! 3

4 Key Trends in the Industry Moving from TPM to TPO Barriers are Coming Down Solutions are Emerging Companies are Taking Action Size Makes a Difference 4

5 Moving from TPM to TPO Self-Reported TPM/TPO Maturity Levels Transaction Management 15% 19% 65% Funds Allocation 4% 38% 58% Post-Event Evaluation 15% 58% 27% Collaborative Planning 15% 67% 17% Pre-Event Simulation, Predictive and Optimization Analytics 25% 62% 13% No or Low Capabilities Average Capabilities Above Average Industry Leading Capabilities Source: 2011 POI/Accenture Charting Your Course to TPO Survey 5

6 Moving from TPM to TPO Value Next Generation Trade Promotion (Advanced Optimization & Collaboration) Advanced Pre & Post Analysis National Geography Retailer Market Channel Cluster Trade Promotion Optimization (& Integrated Foundation) Joint Retailer/Manufacturer Collaboration Customer-Specific Promotion Calendars Pre-Event Simulation / Optimization Trade Promotion Management Post-Event Analysis Shopper Marketing / Individualized Promotions Online Marketing Integration Standard Closed Loop Promotion Process National Promotion Calendars Standalone Trade Planning System (Non-Integrated) Common Trade Productivity Metrics Basic Tracking & Reporting Integrated Trade Planning & Analysis Overall Revenue Management (Promoted and Everyday Pricing) Supply Chain Integration Capabilities Source: Accenture Industry Experience 6

7 Moving from TPM to TPO Types of TPO Performed by Companies 80% 65% 65% 54% 5% Post-event incremental profit/roi Post-event incremental revenue Pre-event what-if simulation Pre-event optimization Other Source: 2011 POI/Accenture Charting Your Course to TPO Survey 7

8 Barriers are Coming Down Percent of Respondents Ranking Barrier in Top 3 Trading partners are not ready or willing to move to this level Lack of clarity on success levels and best in class practices Not a top priority for the organization Legacy systems not capable of integrating data across the organization Lack of budget to invest in TPO platforms Inability to hire/retain sufficient personnel (with right skills/expertise) 40% 32% 24% 21% 16% 15% Source: 2011 POI/Accenture Charting Your Course to TPO Survey 8

9 Solutions are Emerging (Representative Vendors) 9

10 Companies are Taking Action 52% 24% 24% Piloting TPO Implementing TPO Already Implemented TPO Source: 2011 POI/Accenture Charting Your Course to TPO Survey 10

11 Size Makes a Difference Large Cos. (>$2 Billion) Small Cos. (<$2 Billion) Analyzing incremental profit/roi 85% 78% Performing what-if simulation 67% 44% Focusing on category results 44% 33% Studying competitor impacts 19% 11% Trying to be a trading partner 63% 56% Implementing integrated solution 30% 11% Using retailer POS data in TPO 70% 33% Source: 2011 POI/Accenture Charting Your Course to TPO Survey 11

12 Recommended TPO Capability Development Approach Business Transformation Plan, Scope & Pilot Business Processes Solution Delivery Scorecard & Metrics Organization Design Change Mgmt. & User Adoption Support & Measurement Data Modeling Application Prep Application Usage Program Management Source: Accenture Industry Experience 12

13 Mobilizing for Success Address TPO with a business transformation approach not tool implementation Attain proactive senior executive sponsorship and support Identify the respected champions for helping drive new capabilities and behaviors into the organization Understand your capability gaps and develop a plan to close those that are relevant to your company Pick your analytics tool(s) and begin pilots Set objectives for trade promotion productivity and track and measure progress Source: Accenture Industry Experience 13

14 Benefits to be Achieved Quantitative Qualitative $ 14

15 Quantitative Benefits Benefits Seen from TPO Implementation Increase in Profitability 54% Decrease in Time Spent 32% Better Promotional Forecast Accuracy 28% Increase in Revenue 28% % Achieving Specific Benefit Source: 2011 POI/Accenture Charting Your Course to TPO Survey 15

16 Quantitative Benefits TPO Implementation Benefits by Company Size Increase in Profitability 43% 68% Decrease in Time Spent Better Promotional Forecast Accuracy Increase in Revenue 29% 43% 36% 29% 39% 14% % Companies Achieving Benefit Companies larger than $2 billion Companies smaller than $2 billion Source: 2011 POI/Accenture Charting Your Course to TPO Survey 16

17 Results Achieved by TPO Maturity Level 100% Increase in Profitability 67% Increase in Revenue 13% 13% Non TPO/ TPM Source: 2011 POI/Accenture Charting Your Course to TPO Survey 60% 30% 30% 30% Piloting/ Implementing TPO 67% 67% Fully Implemented TPO Decrease in Time Spent Better Promotional Forecast Accuracy 17

18 Qualitative Benefits Less time and resources gathering data (more time for planning and analysis) Better use of trade funds due to greater visibility to ROI More spend against promotion sensitive products/categories Sharing of data and analysis between manufacturer-retailer trading partners Less complex promotion programs Greater consistency in using data/tools 18

19 Case Study Example (CPG Manufacturer) Built econometric models to predict lifts Developed proxy/ surrogate coefficients Modified promotion analysis processes Supported Sales for training/adoption Forecast Error Inventory Position Return on Sales 50% 30% 2-4% 19

20 Companies are Taking Action Company Examples Multi-Division Food Company Multi-Division Food Company Global Food and Beverage Company Consumer Products Company Global Food and Beverage Company Leading CPG Manufacturer & Retailer TPO Pilots or Initiatives Advanced TPO (Forward Buy, Cannibalization, etc.) Pre-Event What-If Simulation Analysis Promotion Optimization (e.g., Fund Allocation) Integrated Demand-Supply Forecasting TPO Localization (e.g., Shopper Analytics) Manufacturer-Retailer Collaboration U.S. Food Company Marketing Mix Modeling 20

21 The TPO bar is being raised higher Conclusion (Getting Started) Companies need to evolve their skills There are plenty ways to get support Trading partner collaboration is a good place to start!!! 21