- Food & Beverage
- Company Type:
- Food Manufacturer
- Company Size:
- Job Functions:
- BI Strategy and Planning, BI Requirements Analysis, Custom Application Development
Challenge: How to develop sophisticated, realistic and justifiable B2B sales plans; how to effectively utilize sales, customer and product information to better measure, monitor, analyze predict and report on sales performance, trends, opportunities, and threats.
A Passion for Flavor
Our client is a $3 billion global leader in the manufacture, marketing and distribution of spices, seasonings and flavors to the entire food industry. Its customers range from retail outlets and food manufacturers to food service businesses. The company’s $1 billion industrial business supplies products to many of the world’s top food manufacturers and food service businesses from locations primarily in North America, Europe and the Asia/Pacific region.
While the company’s name may not be on the package or menu, its products add great taste to a wide range of packaged food including snacks, savory side dishes and cereals, as well as restaurant items that include sandwich sauces, chicken coatings and bread toppings.
The Industrial Group – Planning through Uncertainty
The company’s Industrial business provides flavors, seasonings, coatings, and condiments to many of the world’s top food manufacturers and food service businesses. Because of highly variable customer demand for its broad selection of products, Industrial’s sales executives found that developing realistic sales plans and then managing actual sales performance was a complicated task. This demand variability was caused by two main factors: first, Industrial’s customers had little visibility into their retail-level demand, and second the company often had little visibility into their customers’ plans – such as plans to introduce new products or retire old products that use the company’s flavors.
This environment made it challenging to develop a realistic bottom-up product sales plan that took account of product sales trends, customer order patterns, and product pricing factors for thousands of Industrial’s products.
Once the sales plan was developed and approved, the critical task shifted to being able to provide front-line sales people, back office sales analysts, and sales managers with a timely and accurate 360° view of sales across multiple dimensions. Without the right information at the right time in the hands of the right people, the Industrial group was challenged to:
- build realistic bottom-up sales forecasts based on actual customers’ product purchases over various time periods
- regularly monitor actual sales and then automatically and efficiently drill down to the root sources of unfavorable sales variances – by product, customer, etc
- track and report actual sales performance against various versions of plans/budgets
- analyze customer profitability and product profitability in conjunction with annual and opportunistic pricing decisions
- develop and regularly run sales simulations in support of “get well plans” and scenario planning options
More broadly, the lack of readily available sales information made it hard for front-line sales people to have a 360° view of the situation “at the front” – where actual purchase decisions are made. Further, it made it difficult for sales managers to understand, explain, assess, and address the root sources of unfavorable sales variance. Had these limitations continued, it would have put them in a weaker negotiation position with their customers, and made them more susceptible to competitive threats. Being creative and resourceful people, they did their best to overcome the limitations, but it was clear to all that better BI could materially increase their ability to meet company sales objectives.
The Sales Data Mart – Driving Sales Results
To respond to these needs, the company sought out a consulting partner with the expertise required to integrate key information required to drive revenues in support of sales and company goals. They selected DecisionPath to design, develop, and implement a custom Sales Data Mart that provides all the information and analytics needed by the sales management team to develop realistic, justifiable sales plans and then ensure that sales targets are met.
By having a realistic base sales plan based on accurate data, the sales force and sales management team were able to concentrate their efforts on the products and customers where there were unfavorable variances, quickly identifying root causes and then developing effective sales tactics to correct course. Further, having timely and readily-available information in the Sales Data Mart enabled the sales team to have the facts at their fingertips during customer calls and pricing negotiations, and it enabled sales managers to effectively communicate with upper management during regular sales reviews about the root causes of variances – thereby promoting more productive discussions about the prerequisites and tactical options for improved results.
Further, the information in the Sales Data Mart enabled the use of predictive models during discussions about tradeoffs between sales volumes and pricing actions, enabling managers to quantify the economic impact on gross margins of any decision to cut prices to achieve target volumes. Ultimately, the Sales Data Mart has been a key sales management tool – helping the Industrial group to grow the top line at a 5.85% compound annual growth rate over a three-year period – in a mature industry where 2% growth is typical.