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Significance of SAP Trade Management
Introduction:
Hi, my name is Narendra, and I am Certified SAP HANA Consultant, currently working as a Managing Consultant for TekLink Software Pvt Ltd – An HGS Company with primary Skills on BW4HANA, S4HANA and SAP Trade Management.
Significance of SAP Trade Management in Simple Terminology:
SAP Trade Management (SAP TM) is like a digital assistant for businesses that helps them to Plan, Execute and Analyse Trade Related Activities.
SAP Trade Management (SAP TM) is a comprehensive tool that covers everything from promoting products and collaborating with partners to manage funds and analyze the success of campaigns.
Let’s break it down with an example:
- Promotion Planning- Assume XYZ Company, launching a new snack product named ‘Masala Potato Chips’. SAP TM helps you Plan how to Promote it – May be through discounts, Advertisements, or any special displays in stores.
- Collaboration with Partners – SAP TM lets XYZ Company to closely work with Partner (like Retailers/Distributors/Wholesalers) to create Joint Plans. In simple, it’s like sitting down with Retailers/Wholesalers to figure out how both (XYZ Company and Retailers/wholesalers) can make the product launch successful.
- Budget/Funds Management- As specified in the Promotion Planning when XYZ company offering discounts or running ads, they need money for that. SAP TM helps you to manage your budget, making surely you spend wisely on Promotions to get the best results.
- Data Analysis – After the Promotion is executed, XYZ company wants to know how well it worked. SAP TM gives you tools to analyse data – like how many Snacks were sold during the Promotion. This helps XYZ company to take Smarter decisions for the future. SAP Trade Management provides some Standard Key Performance Indicators (KPIs) which are used to analyse Data.
Standard KPIs : Below are the list of Standard KPIs provided by SAP. Based on the user requirements new KPIs can be included or existing KPIs are excluded.
| KPIs used in SAP Trade Promotions | |
| Sell-In Total | Promo Discounts (ON) |
| Sell-In Promo | Promo Discount (%) |
| Sell-In Non-Promo | Promo Discount (pU) |
| Sell-Out Total | On Invoice Total |
| Sell-Out Promo | Slotting Fee (OFF) |
| Sell-Out Non-Promo | Slotting Fee Rebate (%) |
| Sell-In Total | Slotting Fee Rebate (pU) |
| Sell-In Base | Slotting Fee Rebates (Fixed) |
| Sell-In Uplift | Promo Rebates (OFF) |
| Sell-Out Total | Promo Rebate (%) |
| Sell-Out Base | Promo Rebate (pU) |
| Sell-Out Uplift | Promo Rebate (Fixed) |
| List Price | Off Invoice Total |
| Gross Sales Value | Promo Investment Total |
| Promoted RSP (per CU) | |
| KPIs used in Customer Business Planning | ||
| PY Base Volume | Sell-In Promo | Slotting Fee Rebate (%) |
| Store Open/Close (%) | Sell-In Non-Promo | Slotting Fee Rebate (pU) |
| Store Open/Close Volume Change | Sell-In Non-Promo (Editable) | Slotting Fee Rebates (Fixed) |
| Distribution (%) | Sell-Out Total | Promo Rebates (OFF) |
| Distribution Volume Change | Sell-Out Promo | Promo Rebate (%) |
| Base Volume Sub-Total | Sell-Out Non-Promo | Promo Rebate (pU) |
| PY Retail Price | Sell-Out Non-Promo (Editable) | Promo Rebate (Fixed) |
| Retail Price Increase (%) | Sell-In Total | Off Invoice Total |
| Every Day RSP Volume Change | Sell-In Base | Net Net Invoice Value (pU) |
| Category (%) | Sell-In Uplift | Net Net Invoice Value Total |
| Category Volume Change | Sell-Out Total | Base Investment Total |
| Advertising & Promotion (%) | Sell-Out Base | Promo Investment Total |
| Adv. & Promo Volume Change | Sell-Out Uplift | Cost of Goods Sold |
| Other Drivers (%) | List Price | Internal Profit (pU) |
| Other Volume Change | Gross Sales Value | Internal Profit Total |
| Innovation Baseline | Slotting Fee (ON) | Internal Profit (%) |
| Sell-In Base Volume | Slotting Fee Discount (%) | Return on Investment (%) |
| PY Base Volume Change (%) | Slotting Fee Discount (pU) | Retailer Shelf Price (per CU) |
| Sell-In Uplift Volume | Promo Discounts (ON) | Promoted RSP (per CU) |
| PY Uplift Volume | Promo Discount (%) | Regular RSP (per CU) |
| PY Uplift Volume Change (%) | Promo Discount (pU) | Customer Profit (pU) |
| Sell-Out Total Volume | On Invoice Total | Customer Profit Total |
| PY Sell-Out Total Vol | Net Invoice Value (pU) | Customer Profit (%) |
| PY Sell-Out Total Change (%) | Net Invoice Value Total | Customer ROI % |
| Sell-In Total | Slotting Fee (OFF) | |
In my next Blog, will take you through each KPIs with an example….
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