Managing Sales Programs: Customer Rebates, Billbacks, Trade Promotions, Broker Commissions and Royalties Luke Miller, Design Manager June 26, 2013 1
Managing Sales Programs Agenda 1. Cargill Background 2. SAP Project Background 3. Business Challenge 4. Evaluation Criteria 5. Vistex Implementation Landscape 6. Vistex Implementation Functionality 7. Future Vistex Plans 8. Lessons Learned 9. Return On Investment 10. Q&A 2
Cargill Background Founded in 1865, Grain Warehousing Privately Held FY12 Revenue = $133.9 Billion 142,000 Employees in 65 Countries Primarily B2B 75 Business Units in Four Major Segments Agricultural Financial Food Industrial 3
SAP Project Background SAP Project (Tartan) Launched in 2008 Enabler of Corporate Strategy A Global Journey to: Transform key business processes Improve how we capture and maintain critical business information Integrate software and infrastructure solutions 4
Business Challenge Scalability Global Business Units Diverse Product Lines Multiple Sales Channels Legacy Sales Programs Inconsistent Terminology Different Sales Approach and Styles Varied Accrual and Settlement Processes Locally Developed Systems Spreadsheet Administration 5
Evaluation Criteria Strong Preference for SAP Partner Global Scalability Accurate Balance Sheet Accruals Embedded Application Master Data Usage No Interfaces or Integrations Analytical Data Foundation 6
Evaluation Criteria - Continued Sales Program Types Rebates Billbacks Trade Promotions Commissions/Incentives Royalties Sales Program Partners Customers / End Customers Salespeople / Brokers Buying Groups 3 rd Party Administrators 7
Evaluation Criteria - Continued Sales Program Methods Transactional Composite / Thresholds Incremental Inclusive Sales Program Characteristics Per Case Per Pound (variable weight) Percent of Price Percent of Net Invoice 8
Evaluation Criteria - Continued Inclusion and Exclusion Factors Material Material Group Material Brand Customer Customer Types Billing Document Types Sales Program Settlement Customer Check Customer Deduction Vendor Check 9
Vistex Implementation Landscape Vistex 6.0A, Upgrading to 6.0D ECC 6.0 with Catch Weight SAP Receivables Management (FSCM) TM 8.0 Transportation Management Triple Point CSL Trading and Commodity 10
Vistex Implementation - Functional Rebates Customer Buying Group Billbacks Customer, End Customer Trade Promotion Commissions/Incentives Brokers Royalty 11
Functional Example - 1 of 4 Pay Customer Rebate and Broker 1 Based on Invoice Broker 1 Cargill Food Distributor Cargill Invoices 12
Functional Example - 2 of 4 Pay Customer Rebate and Broker 1 Based on Invoice Pay Pricing Claim Based on Billback Broker 1 Cargill Food Distributor Restaurants Cargill Invoices Billbacks Distributor Invoices 13
Functional Example - 3 of 4 Pay Customer Rebate and Broker 1 Based on Invoice Pay Pricing Claim Based on Billback Pay Broker 2, and Adjust Broker 1 Based on Billback Broker 1 Cargill Food Distributor Restaurants Broker 2 Cargill Invoices Billbacks Distributor Invoices 14
Functional Example - 4 of 4 Quarterly Sales Program; Paid Monthly - Expected Accrual vs. Payout Threshold Level Rate 1-10,000 $0.10 10,001-20,000 $0.12 20,001-30,000 $0.15 > 30,000 $0.20 Invoice Cumulative Incremental Incremental Inclusive Inclusive Period Volume Volume Calculation Rebate Calculation Rebate Invoice 1 2,500 2,500 2,500 x $0.10 $250 2,500 x $0.10 $250 Invoice 2 2,000 4,500 2,000 x $0.10 $200 2,000 x $0.10 $200 Invoice 3 3,000 7,500 3,000 x $0.10 $300 3,000 x $0.10 $300 Month 1 7,500 $750 $750 Invoice 4 1,000 8,500 1,000 x $0.10 $100 1,000 x $0.10 $100 Invoice 5 1,500 10,000 1,500 x $0.10 $150 1,500 x $0.10 $150 Invoice 6 5,500 15,500 5,500 x $0.12 $660 10,000 x $0.02 5,500 x $0.12 $860 Month 2 8,000 $910 $1,110 Invoice 7 2,500 18,000 2,500 x $0.12 $300 2,500 x $0.12 $300 Invoice 8 2,000 20,000 2,000 x $0.12 $240 2,000 x $0.12 $240 Invoice 9 5,000 25,000 5,000 x $0.15 $750 20,000 x $0.03 5,000 x $0.15 $1,350 Month 3 9,500 $1,290 $1,890 Quarter 25,000 $2,950 $3,750 15
Future Vistex Plans Continue Implementation, Build Critical Mass Agreement Approval Workflow Process Internal Salesperson Commissions Integration with AR Customer Deductions Profitability Analytics Upgrade to 6.0D In Process 16
Lessons Learned Vistex Expertise is Crucial Limited Pool of Non-Vistex Consultants Implement Less Complex BU s First Utilize Vistex Training Before Global Design One Design Team Agreement to Settlement Resource Planning for Upgrades 17
Lessons Learned - Continued Pre-Deploy Activities May Take Time to Gather Agreements Spend Time Analyzing Legacy Agreements Don t Underestimate Conversion Complexity Manually Create Agreements As Needed Use Vistex Voice Resource Attend Vistas 18
Return On Investment Adherence to Accounting Policies Agreement Documentation Retroactive Agreement Accountability Eliminate Spreadsheet Tracking Accurate Accruals Include Credit Memos and Returns Standardized Process Provides Basis for Analytics 19
Q&A What Are Your Questions? 20
Nourishing ideas. Nourishing people. TM 21