SAP TPM drives greater ROI on trade spend for Hovis
The implementation of SAP TPM is enabling Hovis to achieve a better return on promotional investment, allocate promotional spend in the right place for the right reasons, integrate and co-ordinate sales forecasts and proactively predict performance, ultimately driving up to 2% extra return on trade spend.
Premier Foods, the UK's largest producer of food goods, with brands such as Hovis, Branston, Sharwoods and Ambrosia, recently transformed the Group's structure from a large number of small businesses to three strategic divisions: Grocery, Hovis and Chilled.
Trade Promotions Management was implemented in two phases for the Hovis business unit. The first phase involved replacing an offline promotion planning tool with SAP TPM to plan and approve short term promotions without integration into any sales and distribution backend. The second phase covered the integration of short term promotions and Long Term Trade Agreements from SAP TPM into SAP ECC SD, as well as FSCM Dispute and CRM Claims Management. This allows Hovis an integrated SAP-based end to end processing of trade promotions from planning, execution to settlement.
The business challenge
Premier Foods had SAP in place for all core processes, including Forecasting, Order Processing, Manufacturing, and Logistics & Finance for the Grocery & Cake business units. However, it didn't have an SAP solution for the Hovis business unit. In addition there was a gap, particularly around trade promotions management, for all business units. A legacy in-house system managed promotion approval workflow only but, as it was not integrated; Premier Foods wanted to develop the TPM project at Hovis with a view to eventually rolling it out across the rest of the business.
Giving the Hovis business unit enhanced system functionality and integration of processes with SAP CRM Trade Promotions Management:
- Supports a greater range of promotion types
- Not just short-term promotions, but long-term agreements and trade discounts
- Offers 'off-invoice' discounts as well as retrospective rebates via integration to SAP ECC (ERP central component) rebate agreements.
- Incorporates the maintenance of base prices into SAP CRM
- Customer/product prices are maintained in SAP CRM and transferred to SAP ECC for order processing.
- Enhanced Planning functionality for promotions
- Use of SAP BPS Planning Layouts in promotions is used to manage key figure values and calculations (amounts and quantities). This also integrates with APO Demand Planning system.
- Providing a suite of deductions processes and integrated SAP CRM claims management
- Price and delivery deductions supported in SAP FSCM Dispute Management and enhanced by bespoke workflow solution for approvals
- Creation of claims in SAP FSCM and integrated to SAP CRM claims management for commercial deductions
- A very efficient 'auto-cash' solution, which allows speedy reconciliation of customer payments for a huge quantity of invoices, which integrates with Claims and Dispute deductions, replacing a previous time-consuming manual system.
- Replacement of the existing promotion management system, multiple spreadsheets and a high level of manual entry
- Integrated planning based on common shared data, from account manager through to the supply chain
- A system controlled approval/workflow process, ensuring that promotions approvals are made by the correct people via proactive notification and actioned in a timely manner
- Enhanced business reporting and visibility to aid decision making, for example ROI calculations
- An auto-cash process, enabling significant time savings, from weeks to hours.
"The implementation of SAP TPM at Hovis has given us increased system functionality", says Darren Sloan, Project Manager, Premier Foods. "The project was about enabling. For instance, we needed an invoicing solution in order to reduce headcount, close one of our finance offices and move the responsibility to a service centre in Manchester. The existing claims process was manual. Because bread has a short shelf-life, it gets shipped directly to the stores and on average Hovis raises some 50,000-60,000 invoices per week. If a price is incorrect there could be vast quantities of queries. SAP TPM has given us workflow control, efficiency, formal approval mechanisms and accountability."
"Having these back-end processes in place has enabled us to optimise our finance processes to have to have better pricing control, a reduction in customer claims, and greater visibility. The granularity that SAP TPM has given us enables people to make better decisions," said Darren.
Why Bluefin Solutions?
"Bluefin Solutions is well known for its expertise in the SAP BI and SAP CRM space, so was the obvious partner of choice for the implementation of SAP TPM at Hovis. We have an excellent working relationship with Bluefin and the consultants have integrated extremely well into the team", says Darren.
"Premier Foods has no capability within the SAP CRM space so getting the right partner was essential, especially as this was an important project and a prelude to a bigger roll-out across the rest of the business". Bluefin Solutions demonstrated an impressive understanding of our business and so I had the utmost confidence they would deliver the right technical solution to meet our business objectives."