SAP Trade Management Solution has come a long way with another SAP Trade management 4.0 Feature pack 05 (TMAC 4.0 FP 05). It is beneficial for customers using an older version of SAP Trade Management and those planning for a new implementation. The critical focus areas are reducing the trade spend, funding allocation of companies to match the historic spend level, customer planning, and predictive analytics systems capabilities. It consists of SAP Advanced Analytics for Trade management, SAP Customer Business Planning (SAP CBP), and SAP Trade Promotion Planning and management (SAP TPM).
SAP Advanced Analytics for Trade Management:
Allows optimization of promotions and business plans known as TPO and provides post-event analytics and reporting. It helps Sales Management to analyze the impact of trade promotions and schedule the trade promotions. It also enables Account Executives to better decide on promotional activities with visibility into total demand and sales volume forecast.
SAP Customer Business Planning:
Because it’s integrated with SAP BW and S/4 HANA System, it closes the gaps in the sales process. It enables account managers to plan sales and efficiently understand and identify a beneficial account plan to offer the best promotions. Companies in the Consumer Goods Industry would benefit the most from this capability.
SAP Trade Promotion Planning and management: SAP TPM leverages real-time visibility to actual consumer demand to assess promotion effectiveness, quickly simulate available options to make fast course corrections, and predict and optimize future promotions.
In today’s globally networked organizations, SAP Trade Promotion Management (TPM) is vital for all organizations working with multi-level retailers to promote their products. SAP TPM helps with the entire cycle of planning, reporting, executing, and analyzing trade spends. The consumers with the best-in-class products at the most cost-effective price points become highly competitive; Trade promotions are often the most effective formats in building brand awareness, customer loyalty, and improving sales. By establishing systems with completely integrated value chain processes, SAP TPM can streamline the company’s trade promotions.
Many customers face such challenges as high promotion costs, delayed information, inaccurate forecasting of sales volume, unable to plan remote field sales, and a lack of integration. SAP TPM enables companies to manage their trade promotion processes with an integrated approach providing accurate promotion forecast and analysis on key performance indicators such as trade expenditures, ROI, and profit.
Trade promotions are quickly planned and executed by following a few key steps.
The initial step is to define the sales goals of the organization as well as the client’s targets and real-time monitoring of the activities and settling them periodically to achieve sales results. Next, customer promotions are created by defining the promotion goals, such as revenue uplift and validity dates. Then the products need to be selected from the assortment trade spends to be added to the promotion, which determines the incurred promotion cost, and the promotion must be associated with the fund’s plan. A collection of budgets is available for promotion activities at a given point in time. To easily manage the budget and accurate tracking of expenses, funds can be created for a specific purpose in SAP TPM. Budgets can be adapted as per the need using various budget operations such as transfer, blockade, update, etc. Promotion is then executed as a next step, and a sales order is created in SAP ERP. Promotion execution, KPIs, and overall plans will be monitored. Finally, analyze the promotion activities by Controlling data by settling promotions, accruals, and claims.
SAP TPM Benefits
Increased Promotion ROI– Better forecasting of trade promotions and volumes helps plan the right promotions to realize better ROI.
Efficiency and forecasting accuracy– Controls out-of-stock situations using a fact-based volume forecast, and supply chain visibility improves cost savings.
Process visibility– Supply Chain visibility and other processes give a big picture avoiding entangled issues.
Standardization of Processes- The process is standardized across the enterprise with the end-to-end integration, which also provides the opportunity to automate the process, thus freeing up the resources.
Continuous Process Improvement- Continuous monitoring and improvement will provide standardization and process automation.
Proactive decision making– Sensing the customer demand and predicting the promotion performance will make proactive decision-making possible.
Developing consumer insights– Opportunities could be missed if the product is not available at the right time, hence it helps in developing consumer insights to plan and schedule the promotions.
Shorter implementation cycles– From an IT point of view, the implementation cycles are shorter due to the reduction in planning functions and objects which will result in future savings.
The SAP TPM solution can also be enhanced with analytical and optimization tools using machine learning techniques to improve processes and prepare effective forecasts continuously.