Customer Business Planning – Integration with Trade Promotion Planning & Management
Most of the CPG companies by now have one or the other Trade Promotion Management solution in place, with many of them choosing SAP’s integrated offering for Trade Promotion, Trade Funding and Trade Claims for its obvious advantages in terms of functionalities it offers and the End to End solution it provides. SAP, in 2016, came up with Customer Business Planning (CBP) that allowed companies to not just plan for their trade activities but to develop a complete sales plan that included trade as well as non-trade relevant volume and value planning. In order to this this, CBP is closely integrated with Trade Promotion Planning and Management (previously known as Trade Promotion Management).
My previous blog was focused on the data flow to and from CBP. In this blog, I’ll try to explain the integration between CBP and TPPM. It’s expected that you have a basic knowledge of SAP CRM and SAP Trade Management and the functionalities covered in them.
Customer Business Planning enables companies to create sales plan for their customers. It includes planning for the baselines and then planning trade related activities to enhance / improve the sales. This requires a close integration between CBP and TPPM, where baseline from CBP flows to TPPM and allows planning of uplifts and trade spends from TPPM flow to CBP so that they can be reflected on the overall plan. This integration is explained in detail in the subsequent sections.
Planning for baselines
Baseline is the volume that a company is able to sell without running any promotional activities. Customer business planning allows you to plan for your baselines. They can be entered manually or can be arrived at based on previous year’s volumes.
Creating Trade Promotions
After the baselines are planned, companies can plan their promotions on top of these baselines. To get the baselines from CBP to promotions, one has to create promotions from CBP.
To create promotions from CBP, you have to map your promotion types to either Detailed Promotions or Draft Promotions and do the relevant configurations in SPRO.
In CBP Plan, promotions can be created from following screens / tabs
You can create promotion from Calendar view by clicking on ‘Add Promotion’ button. This promotion is by default created for 7 days with starting date as today’s date. Dates can be changed after going into promotion
Profit & Loss
You can right click on any period (month or week, depending on the view you’ve selected) to create a promotion for that period. The dates can be changed after going into the promotion. If you select a specific product, then that product is automatically included in the promotion. If you want to add any other product then it has to be selected separately after going into promotion
You can right click on any period (month or week, depending on the view you’ve selected) to create a promotion for that period. The dates can be changed after going into the promotion. If you right click on the row for a specific product, then that product is automatically included in the promotion. If you want to add any other product then it has to be selected separately after going into promotion.
You can enter dates, products, spend types on this screen to create promotions quickly. However, you cannot enter values at individual product or week level and values entered will be applicable for all the products for all the weeks of the promotion.
Main objective of the business while running any promotional activity is to increase the sales volume. The additional volume over and above the baseline is called as Uplift volume. When you create a promotion from CBP, the baseline flows to the promotion. You can enter the anticipated uplift that’ll be generated due to that trade promotion. These uplifts will then flow back to CBP to give the total volume for that period.
Adding Trade Spends
In any promotional activity, you have to give some incentives to either your distributors, retailers or the end consumers in order to improve / increase your sales. These incentives are nothing but your trade spends. Trade spends can be either variable (dependent on the volume) or fixed (independent of the volume). Variable spend can be further divided into off-invoice (discounts given at the time of ordering itself) and rebates.
The trade spends are added into promotions and they flow to CBP. So when all the promotions are created, the CBP will show the total planned trade spends for that customer plan.
The Trade Spends are also linked to trade funds via fund usages in Promotion and are accrued based on the accrual profile selected.
When the actualization happens, the actual Volumes are updated in the CBP through shipment data coming from ECC via BI. The Actual Trade Spends are updated from the fund postings in CRM that are extracted to BI. The fund postings happen based on the accruals of the variable and fixed trade spends and are posted in the relevant period based on the accrual profile used. In CBP, you can see the actual volume and trade spends only for the past week and beyond and even though the current week has partially elapsed, it’ll still show the planned volumes and trade spends.
When read in conjunction with Customer Business Planning – Data Flow, this blog should help you in understanding the integration between customer business planning and trade promotion planning & management. You can apply this understanding while designing a new trade management solution or while upgrading your existing trade promotion management solution to include