Sales&and&Finance:&Partnering&for&Profit& through&TPM€¦ ·...
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Sales and Finance: Partnering for Profit through TPM Mark Kemmerer Director of Customer Finance Del Monte Foods, Inc. [email protected] PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
Transcript of Sales&and&Finance:&Partnering&for&Profit& through&TPM€¦ ·...
Sales and Finance: Partnering for Profit through TPM Mark Kemmerer
Director of Customer Finance Del Monte Foods, Inc.
[email protected] PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
Partnering for Profit
• CFO is obligated to protect the company’s interests • TPM is the conduit for Trade management • Sales/Customer Finance team can be the bridge – Add significant value to Trade planning and analysis – Trade ROI unlocks Trade efficiency opportuniTes
• Cross-‐funcTonal CollaboraTon is the key
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
Why invest in TPM?
• “SoW” benefits: – Record promoTon plans & se[le deducTons – Provide a tool for Sales planning – Visibility to full-‐year Trade spend & key metrics – Enable be[er-‐informed trade-‐off decisions – Single, unified Sales forecast for IBP / S&OP
• The BIG benefit: – Improve the return on Trade investment
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
Why does a CFO care about TPM? • #1 Priority: Create value for stakeholders • In CPG, Trade is the largest cost, aWer COGS – A few percentage points = big profit impact
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
What does a CFO want from TPM?
• Compliance – Adherence to policy – Governance: Fair trade – Sales alignment to profit strategy
• Accuracy – ExcepTon reporTng – Transparency of trade deals
• Performance Improvement – Increase Trade ROI
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
How does a CFO protect the company’s financial interests?
• Old School: Iron-‐Fisted policy enforcement • Real World: CollaboraTon
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
How does a CFO protect the company’s financial interests?
• Old School: Iron-‐Fisted policy enforcement • Real World: CollaboraTon
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
Sales/Customer Finance: Ambassadors of Profit
• Financial partner with Field Sales and Customer MarkeTng to support the delivery of business objecTves
• Evaluate the business through a financial lens and discuss implicaTons of trade-‐off decisions
• Communicate financial state of the Sales forecast through the organizaTon
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
Sales/Customer Finance: Adding value through TPM
• Planning – Help Sales develop an annual plan that meets targets for profit & Trade spend
– Confirm that promoTons are: • Within guidelines • Based on sound assumpTons
– Enable rapid adaptaTon as business condiTons evolve • Decision Leadership & Support – Reinforce financial implicaTons – Translate Sales expectaTons into “HQ-‐speak” – Partner cross-‐funcTonally to drive be[er decisions
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
PromoHon Planning & Analysis: A Case for Streamlining
• According to POI, the vast majority of CPG’s believe that the enTre process of creaTng a promoTonal plan from budgeTng to planning to execuTon to se[lement to post event analyTcs takes a burdensome amount of Tme.
Source: Promo+on Op+miza+on Ins+tute 2015 Research
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
RelaHonship with Sales
• Customer Finance is your partner for financial evaluaTon of the business (Plans, ROI’s, NaTonal Agreements, OpportuniTes)
• We will help you review expected and actual results and provide guidance through the monthly review process
• Leverage Customer Finance in business discussions that have financial implicaTons
• Customer Finance leads the financial aspects of planning in partnership with the Customer MarkeTng organizaTon
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
Adding greater value: Closing the loop with ROI analysis
• How do we maximize the return on our Trade investment?
• ImparTal “third party” conducts analysis – Company’s best interests at heart
• Plalorm-‐agnosTc: TPM / TPO / ROI / Excel • It’s more about process and mindset, than technology
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
What is Trade ROI?
• At a promoTon level, it answers the quesTon: – “How do our financial results compare vs. our expected results without this promoTon?”
• Formula: Incremental Profit Incremental Spend
• Incremental Profit: – Gross Incremental Sales $ -‐ COGS – Incremental Spend
• Incremental Spend: – Total PromoTonal Cost + Incremental EDLP Spend
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
Change Management
Systems & Tools Plan & Analyze Trade Promotions
Manage Profitability & ROI
Ownership/Accountability
Flexibility/Adaptability
Dedication
Commitment
Positive Attitude
80%
20%
The Human Element
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
How can Sales maximize the value of Trade ROI?
• Planning – Ensure baselines are reasonable – Separate EDLP/EDLC events from PromoTonal events – Use Pre-‐Event ROI to confirm profitability and accuracy of plans
• During & AOer Events – Manage ExecuTon to align with Plans – Make Liability Adjustments ASAP – Adjust event dates to align with execuTon – Adjust balance of year plans based on event performance
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
Trade ROI ExpectaHons -‐ Sales
• Leverage results to make informed decisions and build beRer plans
• Improve ROI from one event to the next • Eliminate lower ROI events
• Leverage results across the organizaTon to make trade-‐off decisions
• What’s an average range of ROI results? What should I expect? • What’s working and not working across customers?
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
Making Trade Efficiency “Real” for Sales Teams
• If EBITDA is coming in on target… • A 5% improvement in Trade Efficiency can yield • A $XX MM increase in EBITDA, which could mean • 50% more Bonus!!
[VALUE]%
[VALUE]%
Trade Spending Bonus
50% More Bonus!
EBITDA
$XX Million
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
Bringing it all together: Partnering for Profit
• Cross-‐funcTonal CollaboraTon is CriTcal! – Sales, Customer MarkeTng, BU/MarkeTng, Sales OperaTons, Demand Planning….
• Monthly: Business Review – Bring cross-‐funcTonal partners together to discuss customer-‐level business performance
– Insights feed into IBP/S&OP cycle • Quarterly: Key Account Business Review – Broader, cross-‐funcTonal review of business drivers and insights that shape financial forecasts and AOP
• Annually: In-‐Market Sales Planning – Full-‐year trade planning at the customer level
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
• Monthly cross-‐funcTonal reviews enabled the company to adopt a single Sales forecast.
• Business trends • Event performance • Forecast accuracy
Customer Business Reviews
Consumer Products L7 -‐ Financial Insights and Analysis• •
• •
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$ as '000
List $ Spend GRAT List $Fund vs. Spend GRAT List $ Spend GRAT List $
Spend to Fund GRAT List $ Spend GRAT List $ Spend GRAT List $ Spend GRAT List $ Spend GRAT
# Consumer Products_L7 47,292$ 9,147$ 14,272$ (2,532)$ 86$ (1,980)$ (1,396)$ 64$ (1,032)$ 95 99 88 104 103 101 83 73 83 107 107 104 74 -‐ -‐ # VEGETABLE SBU_L5 14,797$ 4,032$ 5,121$ (2,641)$ (465)$ (1,557)$ (416)$ 165$ (427)$ 85 113 77 100 120 91 95 146 75 101 118 92 65 -‐ -‐ # COS FRUIT SBU_L5 12,765$ 2,173$ 3,198$ 239$ 150$ (683)$ 294$ 128$ (158)$ 102 94 82 107 94 96 43 25 58 122 109 106 76 -‐ -‐ # TOMATO SBU_L5 8,342$ 1,684$ 3,342$ (842)$ 345$ 37$ (849)$ (207)$ (317)$ 91 83 101 102 88 110 50 65 39 108 91 120 86 -‐ -‐ # PRODUCE SBU_L5 10,907$ 1,192$ 2,402$ 550$ 33$ 137$ (426)$ (23)$ (129)$ 105 97 106 107 94 123 200 77 1,262 97 98 104 73 -‐ -‐ # College Inn_L5 482$ 66$ 210$ 162$ 23$ 86$ 0$ 1$ (1)$ 151 74 170 178 147 192 40 51 37 192 155 210 100 -‐ -‐
Atlas Updated: August 5, 2013
F14 vs Quota -‐ Fruit spend index is 94, is this plan completed or do we have some opportunity to go after additional events?
Customer X Review for August F14 Cycle (Atlas as of 8/5/13)
BOY F14 vs BOY F13 F15 Proj. vs F14 Proj.F14 Projection F14 Proj. vs Quota F14 Proj MTM Change F14 Index to Quota/Fund F14 Proj. vs F13 Proj. YTD F14 vs YTD F13
F14 vs F13 Proj -‐ Current plan snapshot shows that we are growing topline by +4% over last year with bottom line of +1%.
F14 YTD vs Last Year -‐ Core Fruit is down as we are lapping a few weeks of Features that are not repeated in F14, In Tomato Hunts is more aggressive this year featuring a couple of weeks at $1.00 avg promo price
F14 vs Quota -‐ Current plan snapshot shows that we are off by about $2.5M with the largest gap coming from Veg $2.5M. The Veg plan this year has some added complexities as the customer has asked for different funding for price sensitive divisions. Is this plan still work in progress?
MTM change: List $ decline = ($1.4M) -‐ mostly due to volume actualization in July. No corresponding change in spend
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ConsumerProducts_L7
VEGETABLE SBU_L5 COS FRUIT SBU_L5 TOMATO SBU_L5 PRODUCE SBU_L5 College Inn_L5
F14 Projected Index to QuotaList $
Spend toFund
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Consumer Products_L7 VEGETABLE SBU_L5 COS FRUIT SBU_L5 TOMATO SBU_L5 PRODUCE SBU_L5 College Inn_L5
F14 Projected Index vs. F13List $
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PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
Customer Bus. Review – Closeup 1
Consumer Products L7 -‐ Financial Insights and Analysis• •
• •
•
$ as '000
List $ Spend GRAT List $Fund vs. Spend GRAT List $ Spend GRAT List $
Spend to Fund GRAT List $ Spend GRAT List $ Spend GRAT List $ Spend GRAT List $ Spend GRAT
# Consumer Products_L7 47,292$ 9,147$ 14,272$ (2,532)$ 86$ (1,980)$ (1,396)$ 64$ (1,032)$ 95 99 88 104 103 101 83 73 83 107 107 104 74 -‐ -‐ # VEGETABLE SBU_L5 14,797$ 4,032$ 5,121$ (2,641)$ (465)$ (1,557)$ (416)$ 165$ (427)$ 85 113 77 100 120 91 95 146 75 101 118 92 65 -‐ -‐ # COS FRUIT SBU_L5 12,765$ 2,173$ 3,198$ 239$ 150$ (683)$ 294$ 128$ (158)$ 102 94 82 107 94 96 43 25 58 122 109 106 76 -‐ -‐ # TOMATO SBU_L5 8,342$ 1,684$ 3,342$ (842)$ 345$ 37$ (849)$ (207)$ (317)$ 91 83 101 102 88 110 50 65 39 108 91 120 86 -‐ -‐ # PRODUCE SBU_L5 10,907$ 1,192$ 2,402$ 550$ 33$ 137$ (426)$ (23)$ (129)$ 105 97 106 107 94 123 200 77 1,262 97 98 104 73 -‐ -‐ # College Inn_L5 482$ 66$ 210$ 162$ 23$ 86$ 0$ 1$ (1)$ 151 74 170 178 147 192 40 51 37 192 155 210 100 -‐ -‐
Atlas Updated: August 5, 2013
F14 vs Quota -‐ Fruit spend index is 94, is this plan completed or do we have some opportunity to go after additional events?
Customer X Review for August F14 Cycle (Atlas as of 8/5/13)
BOY F14 vs BOY F13 F15 Proj. vs F14 Proj.F14 Projection F14 Proj. vs Quota F14 Proj MTM Change F14 Index to Quota/Fund F14 Proj. vs F13 Proj. YTD F14 vs YTD F13
F14 vs F13 Proj -‐ Current plan snapshot shows that we are growing topline by +4% over last year with bottom line of +1%.
F14 YTD vs Last Year -‐ Core Fruit is down as we are lapping a few weeks of Features that are not repeated in F14, In Tomato Hunts is more aggressive this year featuring a couple of weeks at $1.00 avg promo price
F14 vs Quota -‐ Current plan snapshot shows that we are off by about $2.5M with the largest gap coming from Veg $2.5M. The Veg plan this year has some added complexities as the customer has asked for different funding for price sensitive divisions. Is this plan still work in progress?
MTM change: List $ decline = ($1.4M) -‐ mostly due to volume actualization in July. No corresponding change in spend
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105 99
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77 82
101 106
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ConsumerProducts_L7
VEGETABLE SBU_L5 COS FRUIT SBU_L5 TOMATO SBU_L5 PRODUCE SBU_L5 College Inn_L5
F14 Projected Index to QuotaList $
Spend toFund
GRAT
100 Index
104 100
107 102
107 103
120
94 88
94 101
91 96
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123
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Consumer Products_L7 VEGETABLE SBU_L5 COS FRUIT SBU_L5 TOMATO SBU_L5 PRODUCE SBU_L5 College Inn_L5
F14 Projected Index vs. F13List $
Spend
GRAT
100Index
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
Customer Bus. Review – Closeup 2
Consumer Products L7 -‐ Financial Insights and Analysis• •
• •
•
$ as '000
List $ Spend GRAT List $Fund vs. Spend GRAT List $ Spend GRAT List $
Spend to Fund GRAT List $ Spend GRAT List $ Spend GRAT List $ Spend GRAT List $ Spend GRAT
# Consumer Products_L7 47,292$ 9,147$ 14,272$ (2,532)$ 86$ (1,980)$ (1,396)$ 64$ (1,032)$ 95 99 88 104 103 101 83 73 83 107 107 104 74 -‐ -‐ # VEGETABLE SBU_L5 14,797$ 4,032$ 5,121$ (2,641)$ (465)$ (1,557)$ (416)$ 165$ (427)$ 85 113 77 100 120 91 95 146 75 101 118 92 65 -‐ -‐ # COS FRUIT SBU_L5 12,765$ 2,173$ 3,198$ 239$ 150$ (683)$ 294$ 128$ (158)$ 102 94 82 107 94 96 43 25 58 122 109 106 76 -‐ -‐ # TOMATO SBU_L5 8,342$ 1,684$ 3,342$ (842)$ 345$ 37$ (849)$ (207)$ (317)$ 91 83 101 102 88 110 50 65 39 108 91 120 86 -‐ -‐ # PRODUCE SBU_L5 10,907$ 1,192$ 2,402$ 550$ 33$ 137$ (426)$ (23)$ (129)$ 105 97 106 107 94 123 200 77 1,262 97 98 104 73 -‐ -‐ # College Inn_L5 482$ 66$ 210$ 162$ 23$ 86$ 0$ 1$ (1)$ 151 74 170 178 147 192 40 51 37 192 155 210 100 -‐ -‐
Atlas Updated: August 5, 2013
F14 vs Quota -‐ Fruit spend index is 94, is this plan completed or do we have some opportunity to go after additional events?
Customer X Review for August F14 Cycle (Atlas as of 8/5/13)
BOY F14 vs BOY F13 F15 Proj. vs F14 Proj.F14 Projection F14 Proj. vs Quota F14 Proj MTM Change F14 Index to Quota/Fund F14 Proj. vs F13 Proj. YTD F14 vs YTD F13
F14 vs F13 Proj -‐ Current plan snapshot shows that we are growing topline by +4% over last year with bottom line of +1%.
F14 YTD vs Last Year -‐ Core Fruit is down as we are lapping a few weeks of Features that are not repeated in F14, In Tomato Hunts is more aggressive this year featuring a couple of weeks at $1.00 avg promo price
F14 vs Quota -‐ Current plan snapshot shows that we are off by about $2.5M with the largest gap coming from Veg $2.5M. The Veg plan this year has some added complexities as the customer has asked for different funding for price sensitive divisions. Is this plan still work in progress?
MTM change: List $ decline = ($1.4M) -‐ mostly due to volume actualization in July. No corresponding change in spend
95
85
102
91
105 99
113
94
83
97
74
88
77 82
101 106
60
70
80
90
100
110
120
130
140
ConsumerProducts_L7
VEGETABLE SBU_L5 COS FRUIT SBU_L5 TOMATO SBU_L5 PRODUCE SBU_L5 College Inn_L5
F14 Projected Index to QuotaList $
Spend toFund
GRAT
100 Index
104 100
107 102
107 103
120
94 88
94 101
91 96
110
123
60
70
80
90
100
110
120
130
140
Consumer Products_L7 VEGETABLE SBU_L5 COS FRUIT SBU_L5 TOMATO SBU_L5 PRODUCE SBU_L5 College Inn_L5
F14 Projected Index vs. F13List $
Spend
GRAT
100Index
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
Partnering for Profit
• CFO is obligated to protect the company’s interests • TPM is the conduit for Trade management • Sales/Customer Finance team can be the bridge – Add significant value to Trade planning and analysis – Trade ROI unlocks Trade efficiency opportuniTes
• Cross-‐funcTonal CollaboraTon is the key
Sales and Finance: Partnering for Profit through TPM
Mark Kemmerer Director of Customer Finance
Del Monte Foods, Inc. [email protected]
PROMOTION OPTIMIZATION INSTITUTE | FALL SUMMIT 2015 | DALLAS TX
