1. BI in FMCG Industry - Raj Basu

2. Major changes in FMCG industry
Indian Consumer changes
Larger disposable income
Middle class segment bulging
Greater global exposure
Greater appetite & demand for global products
Differentiated product & service requirements
FMCG space dynamics
Explosion of products
Explosion of markets (Kirana & Organized Retail)
Rush of new players
Global players bringing process and intelligence maturity
Increasing competition
Supply chain bottlenecks
Impact on FMCG strategy & operations
Increasing Flexibility
Outsourced Contract Manufacturing
Demand driven supply chain
Improving Customer service
Retail outlet segmentation
Customized Retail service
Supply Chain segmentation
Greater Organizational Alignment
EPM, Divisional Scorecards
Integrated Sales & operations planning
Greater Customer focus
Demand analysis
Product charateristics

3. EPM/BI needs of the FMCG Industry
Rapid EPM adoption for Org Alignment & strategy management
Balanced Scorecards (Strategy Maps, Business Scorecards)
Budgeting, Planning & Consolidation systems
Operational performance management
Financial Analytics for greater ROCE
Working Capital Optimization (C2C Cycle)
Debtor Analytics
Payables Analytics
Inventory Optimization
Treasury Cash Analysis
Customer Analytics
Trade Promotion Analytics
WD Profitability
Outlet performance
Channel Analysis
Integrated Consumer Demand & market performance visibility
Supply Chain Analytics
Supply Chain Performance Management
Product Cost & profitability analysis
Operational Planning efficiency
Inventory visibility & optimization
Supply Network efficiency
Spend Analytics
Operations Analytics
Plant Performance Management
MES Analytics

4. Key BI Trends in the FMCG industry
Major Indian FMCG players are making rapid strides in enabling Business & Competitive intelligence as a key differentiator
Most of the large FMCG companies are centralizing BI as a shared service on a common platform across it’s businesses and brands with a razor like focus on getting Best-In-Class service
Most of them are already deep into state of art Business Intelligence
ability to check on an outlet consumption pattern on a handheld before meeting the owner
ability to analyze secondary sales based promotions rather than primary uptake
ability to provide outlet based actionables rather than market level inputs like OOS, poor AVF scores etc
Global players are even further ahead
Trade Promotion Analytics, Segmentation based promos, supply chain bottleneck alerts, route optimization and advanced forecasting and predictive demand models

5. Strategy Communication
EPM Objectives
FMCG majors are interested in implementing a Performance Management (PM) program across the enterprise, in order to align goals and strategies with operational objectives, plans and responsibilities within the organization.
Key
Business
Benefits
Organizational
Alignment
Strategy
Communication
Effective Model To
Measure Performance
Identify Capability
Development Needs
Develop Superior
Consumer Insight
Adopt New Technology For
Manufacturing Flexibility
HR Effectiveness
Process Efficiency
Customer Satisfaction
Objective
Initiatives
Financial Performance
Measures
Business
Performance
Incr Share
Holder value
Sustained
Profitable growth
Accelerate
Organic Growth
Improve
Productivity
Vision
Strategic
Objective
Functional
Objectives
Unit
Individual
Level 0 : Corporate
Level 1 : Business
Functions
Level 2 : Units
Strategy Communication
Closed Loop - Feedback

6. Classic Balanced Scorecard Framework
Perspective
Key Imperatives
Key Questions
Vision &
Strategy
Effect
Results
Financial
“Profitability”
“Return on Capital Employed”
To Satisfy our shareholder, what
financial objectives must
we accomplish
Customer
“Consumer Satisfaction”
“Market Share”
To achieve our financial goals, what
customer needs, must we satisfy
Internal
Process
“Efficiency”
To satisfy our customers, what
internal business processes, must
we excel in
Cause
Action
To achieve & maintain our competitive
position, how must the organization
the Organization learn & improve
Learning
& Growth
“Knowledge”
“Innovation”
Balanced Scorecard incorporates a double loop feedback around both internal business processes and external outcomes

7. Decision-making challenges at ITC Businesses
Business Performance Mgmt – Executive, Functional, Unit Level Scorecards
Employee Performance Mgmt – Personal Scorecards
Organizational Alignment
Fact Based Decision-Making / Actionable Intelligence
Tactical
Operational
Targeted Promotions & variable pricing
Outlet Segment specific service packages
Profitability based supply routes
Demand driven inventory management
Exception based operations at the Factories
Stock optimization across supply chain nodes
Fast tracking complaints from High Value Cust
Personnel workload mgmt across stores
Performance Visibility
Analytical Capability
Promotion & marketing impact tracking
Supply Chain bottlenecks
SKU velocity
Logistics impact on operating margins
Store Allocation efficiency
Reservation Pipeline vs Forecast
360 deg Customer Views
360 deg Supplier views
Cost variance tracking
Order-To-Fulfillment, Cash –To-Cash,
Procure-To-Pay cycle times
Outlet Service Route Optimization
Outlet Segmentation
Analytical Forecasting
Six Sigma Analytics
Price Elasticity Analysis
BCG Portfolio Analysis
Human Productivity Analysis
Loyalty Analytics
Impact of Food FG Warehouse location on Food Categories operating margins
Impact of Leaf stock at ILTD on price elasticity at ITD
Impact of potato sourcing bottlenecks on Bingo Freshness
Integrated Analysis across value chains

8. EPM driven BI at a US Food Distribution Major
Strategic
Goals
Strategic
Metrics/Scorecards
Demand
Initiatives
Sourcing
Initiatives
Supply Chain
Initiatives
Customer
Initiatives
Some Analysis Areas
Some Analysis Areas
Some Analysis Areas
Some Analysis Areas
General Analysis
Sales Force Effectiveness
Trade Promotion
Effectiveness
Marketing Effectiveness
Market Analysis
Spend Analysis
Supplier Performance
Analysis
Item & Brand Analysis
Bid Analysis
Competitive Analysis
Delivery Effectiveness
SKU rationalization
Effectiveness
Backhaul Effectiveness
Carrier Performance
Analysis
General Analysis
Segmentation Analysis
Contract Compliance
Business Review Analysis
Customer Profitability
Analysis
Business Functions - Functional Metrics, Reports, Alerts, Scorecards, What-If Analysis, Guided Analysis
IT Functions - Dashboards, BI Tools, Databases, ETL, Data Models, Metadata

9. A single BI System should support the EPM Model
Performance Management Model
A common data set populates
the entire model enabling :-
Scalability
EPM, Data, BI Model
System Performance
Integration
data linkages
business rules
BI Layer (Business logic, number crunching, metric/report generation )
Outlet Sales, Invoices, Purchase Orders
Inventory, Transport Orders, Stock Tr Orders,
Salary Advice, re-distribution Costs
Data Warehouse
(Data Storage)
Business Plan, Forecast, A/R, A/P,
Visual Merch Audit, Production Plans,
Market Research, Production Jobs
Data Extraction, Cleansing, Staging,
Transformation & Loading
ETL Layer
Source Systems
Sales Force
& CRM
SAP
Visual Audits
WD System
Excels
PLM
HRMS

10. Some benefits of integrated modeling for FMCG
Impact of raw material shortage on retail offtake
Analysis of a request for a short runner on
Factory productivity vis-à-vis customer service
Correlate/factor-in market demand (IMRB) into AE performance
Decision on extending Promotions based on raw material availability
Analyze impact of sales strategies/norms on Market standing
Analyze synergy opportunities like sharing warehouses, transportation sharing
and backhauling, reverse logistics etc across categories

11. Typical BI Transformation Roadmap
Major Organization Transformations…..
Brand Management Transformation
Process Improvement Transformation
Supply Chain Transformation
…Need a Performance Mgmt & BI Transformation to empower & measure effect of transformation !!
BI Transformation Roadmap
EPM & BI
Workshops
Define
Performance Mgmt
Model
Define
BI Strategy
Create
BI Governance
Model BI
Implementation BI
Change Mgmt
BI Value Mgmt
Framework
Metrics Models
Scorecards
Alerts
Linkages/Alignments
Analysis Flows
Dashboard Designs
Biz Case/ Info Needs
Get Mgmt Buy-In
Awareness Creation
Appreciation of Best
Practices
Intent Generation
Technology Drivers
App Architecture
Data Architecture
Platform Selection
Vendor Selection
Initiatives
Roadmap
Effort Estimation
Identify Sponsor
Create Steering Comm
Create Execution Comm
Comm to all stakeholders
Set expectations/Time
Create Project Plan
Business Requirements
System Requirements
Design
Development
Testing
Deployment
Training
Communication
Biz Process Changes
Expectation Mgmt
Usage Monitoring
BI Support Processes
Risk mgmt
KPO
Customer Service
Business Impact
BI Perf Mgmt
BI RoI
BI Enhancements

12. BI Program Change Mgmt Challenges & Strategy
An effective Change Management strategy for BI Program starts at the Kickoff and ends at satisfactory system adoption and positive customer feedback. However, Change Management is an ongoing process and is part and parcel of an effective BI Governance Model. bringing people on board, convincing them of the value, goading them to use it the right way, measuring business improvements.
BI, being a non-critical business application needs cultural process changes to leverage the investment, which makes it even more challenging and critical aspect of achieving success
Key Questions for Change Mgmt Planning
What will change ?
Why will it change ?
How will it change ?
Who will change it ?
Change
Change is enabled through 4 key change perspectives
People Participation
Processes
Systems
Culture
Business Driven Program
Showcase Business Benefits
Keep business in loop during
change in scope
Embed in biz processes like
sales review etc
Pre-empt business needs
Communicate effectively
Repeated Multi-media
training
Measure adoption, usage and
publish figures
Publish success stories
Business Sponsorship
Business Buy-In, Ownership
Identify Business Change
Agents
Remove Business IT gaps
Remove fear of Retrenchment
Create Senior Mgmt Champions to spread the message
Identify and Plan for process changes early on
Create effective communication channels and joint project plans with other process owners
Cultural and governance change needs to go along with process changes
Identify & Plan all system
changes early on
(Frontline systems may need to
have more checks and measure
to improve data quality)
Create effective communication channels and joint project plans with
other System owners
Communicate all system changes to the Organization

13. Enterprise BI Strategy for ITC
Business Intelligence Mission (SYSCO):
Provide a single view of timely, accurate, consistent & actionable information across the enterprise through a common user interface accessible anytime, anywhere to authorized users, thereby enabling fact based decision making.
BI Strategy
BI Vision
BI Needs/
Painpoints
BI Business Case
BI Budget
Execution Plan
Implementation
Roadmap
& Project Plan
Execution Model
(Inhouse/Outsource)
Vendor Selection
Architecture
(Data, System)
Tool Selection
Scope
Definition
BI Business Case
Unique Sales & Customer view
Unique Spend & vendor view
Supply chain wastes
Asset utilization gaps
Higher employee productivity
Greater IT ROI
Single Analysis Platform across biz areas
Excel intelligence democratization !
Service & Maintenance
Service Model
(Outsource,
Managed BI Svc)
Service
Quality
Management
Service
Vendor Selection
Service
Improvement
Governance Model
Organization
Alignment
Customer
Focus
Risk
Management
Value
Assessment

14. So What’s Driving Trade Promotions?
New product introductions.
In 2003, 33,700 new FMCG items in the US marketplace alone
up from about 32,000 in each of the previous two years.
Declining shelf space.
Median US store size has declined since its 1999 peak of 44,843 square feet, following nine consecutive annual rises.
Wider assortment range in both North American and European stores constrains shelf space yet more.
Private-label products.
Private-label products now account for between 15% and 20% of items sold in US supermarkets, 22% in Europe, and a staggering 42% in the UK.
Result - large and rising trade promotion spend
10 FMCG firms interviewed by Forrester planned 2003/4 trade promotions at 16% gross revenues
It all adds up to more than $100 Billion per year
Based on 2003 revenues, the 50 largest FMCG manufacturers.
It’s the single largest element of expense for FMCGs, but the least well controlled. Typically CFOs use a complex tangle of spreadsheets and enterprise app extracts to track trade promotion dollars but have no way accurately to estimate in advance the impact of a planned promotion. CRM based approaches typically just rely on sales estimates of trade promotion impact, thus ensuring that trade promotion accruals and supply chain preparations are based only on guess work
No wonder senior execs get mauled by regulators and shareholders alike
Source : Forrester Research

15. Closed Loop Process BEGINS with Analyzing Performance and Opportunities in the Business
Analyze Performance
- During and end
of promotions 1 2 3
Analyze Opportunities for Brands and Markets
Plan, Simulate and Evaluate Scenarios
FINANCE
SALES
MARKET INSIGHTS
OPERATIONS
TRADE MANAGEMENT
BRAND / CATEGORY
MANAGEMENT
Execute Deals 7
Collaborate and Approve New Plans 4
Negotiate &
Sell in Deals 6
Generate new Promotions Plan/Forecast 5
Analytics
Operational
Linking Insight and Performance Management with Decision Support

16. Source: Brandweek November 25, 2002/Cannondale Study
Despite such large spends, not many manufacturers have succeeded in measuring promotion effectiveness
Only 7% of Manufacturers say that they are highly effective at evaluating promotion productivity.
Of all investments, promotional spending is the highest whilst knowledge about their return and effectiveness is the lowest.
For promotions, the driver is what was done the previous year
Most promotions are NOT evaluated in an objective and systematic fashion
There are no management KPI’s to measure the business.
“Half of all promotional expenditure is wasted …... the problem is nobody knows which half!”
William H. Lever, Chairman, Unilever Corporation
Source: Brandweek November 25, 2002/Cannondale Study

17. Substantial Opportunity for Manufacturers
Research suggests that FMCG manufacturers can achieve up to a 40% increase
in return on sales through improved trade promotion management.
80-90% of promotions are not profitable for manufacturers
Consumers are unaware of 51% of items
bought on sale
Only 50% of manufacturers measure event
profitability
“Redeploy Inefficient Spending”
“Manage Promotion Driven Costs”
1.5%
2.5%
Potential Manufacturer Value Chain Improvement
(as a Percent of Sales)
.4-.6%
.2-.3%
.2-.4%
.3-.6%
Up to 2.5%
.1-.2%
.2-.3%
0-.1%
10.0%
Percent of Sales
ROS
Manufac-turing Labor
Freight
Fixed COGS
Salesforce
Distribu-tion labor
Inventory Carrying Cost
Diverting and All Other
Source: Accenture Industry Experience and Trade Promotion Study

18. Some typical Trade Promotion Effectiveness KPIs
Process Steps
KPI
Description
Type of KPI
Source of Information
Role Impacted
Measure the efficiency of the entire supply network to ensure that product is available on the shelf at all times during the promotion
Shelf Availability
% of time that product is available on shelf in the correct shelf during the total time of the promotion
Operational
Retailer Inventory System by SKU by shelf location
Brand Manager
Account Manager
Supply Chain Planner
Retail Buyer/Merchandiser
Measure the profitability of each promotion for the entire lifecycle
Promotion ROI
Incremental Revenue less campaign costs, creative costs,
Tactical/Strategic
Manufacturer Sales & Costing systems
VP - Marketing
Measure the lift in sales volume due to the promotion
Sales Lift%
% increase in base demand post promotion
Tactical
Retailer POS systems
Demand Planner
Measure the extent of cannibalization due to promotion on other SKUs/Stores
Sales Drop %
% drop in base demand of non-promoted SKUs in promoted Stores and promoted SKUs in non-promoted Stores
Retailer POS Systems
Measure the extent of Forward Buy by Stores/Accounts
Store/Account Volume
Mismatch between POS sales volume and Store/Account Buy volume during promo period
Manufacturer Sales systems

19. Trade Promotion Analytics – Hierarchy of Needs
Operational
Tactical
Strategic A N L Y T I C S
Demand Management
TP Scenario Planning
What will happen
What is happening
Why did it happen
What happened
Inventory Management
Customer Behaviour Analysis
Ensure shelf availability
Measurement of Sales KPIs – Store level, SKU level, Lift%, Drop%
Determine and analyse Causals
Evaluate Promotions Effectiveness
Determine Order Status
Determine Promotion Costs
Measure promotion impact on sales volumes
Evaluate Store/Account Profitability

20. TPM Applications – Key Interfaces
Customer Master Data
Store Promo Adoption
POS
Inventory
Channel Spends
ERP
Product Master Data
Price Master Data
Consumer Off-take
Customer Analytics
Sales Performance
@ Brand-Account level
SCM
Stock-Out data
Historical Sales
Trend
Operational
Application
Consumer Billing Price
CRM
Store level forecasts
Base Demand
Planogram Compliance
Sales Returns
Forecast Accuracy
Order Backlog
Market/Cateogry/Channel Outlook
SYNDICATE
DATA
Inventory Availability
Analytical
Application
Retailer Panel Data
Retailer Invoice data
Consumer Panel Data
Total cost of promotion
Retailer Promo penetration data
Exception Alerts
Optimisation
Reports
What-If Analysis
Causal Analysis
Retailer
Applications
FMCG TPM
Application
Third Party
Data
FMCG Enterprise Applications
TPM Analytics

21. Thanks !

22. Evolution of BI Increasing Maturity
BI Affordable, Democratized, Mobilized
B1 2.0
Pervasive BI
(Business Planning, Collaboration)
Increasing Maturity
Data –> Insight, Alerts, Root Cause Analysis
Static Reports -> On-The-Spot Answers
MIS/EIS
Reports
BI –> EPM/CPM
1990
BI -> Greater Integration
Business Intelligence -> Intelligent Business
(Exception based Mgmt, predictive analytics etc)
1995
2000
2005
2015

23. Evolution of BI Increasing Maturity BI 2.0 Excel Excel Excel What-If
Analysis
Collaborative BI
Text
Intelligence
Desktop
OLAP
Reports
OLAP
Reports
EPM
CPM
Predictive
Analytics
Increasing Maturity
Static Mgmt
Reports
Expensive
Data
Integration
Web based
OLAP
Reports
Dashboards
Scorecards
Alerts
Analysis Trails
Exception
Based
Management
Mainframes
Data
Silos
Integrated
Data
Repositories
Packaged
ERP BI
Real Time
Analytics
1990
1995
2000
2005
2015

24. Unilever Akili
Unilever Global Network : Connects all regional business units and its customers under one global data pool
Unilever Akili : Working together with the business to fulfill consumer whishes better, faster and cheaper
Global Intelligence Framework
Supply Chain Intelligence
Consumer, Shopper & Trade Analytics
Market Trends &
Consumer
Segmentation
Trade
Dynamics, promotion
management
Network
Planning &
Optimization
Competitive
Intelligence
Supply Chain & Demand Planning
Global Manufacturing
Integrated Sourcing Hubs
Regional
Supply
Chain
Dispersed R&D
Category & Channel Marketing
Collaborative Shopper Value Creation
Regional Category Support
Demand
Planning
Distribution
Structure
Channel
Strategy
Category
Development
By country
Country
Specific
Brand
Activation
Plans
Enablers
Common Identification Standards
Single Platform – all regions
Global Data Synchronization
Standardized Processes & Systems
Integrators
Common Business Performance Models
Collaborative Planning
Global
Registry
Global Information
Service Center
Data Pool

25. Nestle – GLOBE (Global Business Excellence)
Implementation of harmonized Nestle Business Excellence Best Practices – All Regions
Managing Data as corporate assets – Implementation of single data standard – All Regions
Implementation of standardized information system & technology – all regions
GLOBE - Objectives
Key Initiatives
Marketing
Effectiveness
Portfolio
Enhancement
Strategic
Partner
Supply Chain
Demand Planning
Manage risks to targets
Global Sourcing
Effective hedging
Working capital optimization
SKU optimization
Customer profiling & categorization
Consumer & shopper behavior
Trade dynamics & channel intelligence
Micro Marketing intelligence specific to regional needs
Drive operational channel marketing programs
By Geography, Category & by Product groups
Help to optimize product offerings
Identify new opportunity for growth of existing products in the global portfolio
Help in M&A
Identify Cash Flow issues
Currency risks
Aid in investment opportunities
Business
Benefits
Effective decision
making
Enables Shared Services
& reduces cost of operations
Speed to share & Implement
new best practices

26. Reebok – Global Business Intelligence
Sales &
Marketing
Analytics
Purchase
Analytics
Supply Chain
Analytics
Vendor
Analytics
Financial Analytics
mySAP portal
SAP BW
SAP R/3 - AFS
(Apparel & Footwear solution)
[NAM, Canada, Japan, Europe, Russia]
SAP R/3 - AFS
(Apparel & Footwear solution)
[NAM, Canada, Japan, Europe, Russia]
SAP R/3 - AFS
(Apparel & Footwear solution)
[NAM, Canada, Japan, Europe, Russia]
SAP R/3 - AFS
(Apparel & Footwear solution)
[NAM, Canada, Japan, Europe, Russia]
Enterprise Exchange Service
Sales Force
Customers
Logistics
Vendors
Forwarders
Customs
Financial
Institutions
Key Benefits
Consolidated picture of performance – By brand, By Geo, By Period
Fact based decision making – exception based Supply Chain management
Driving accountability across organization –metrics ownership from top to bottom
Better vendor control – vendor scorecarding
Improved sharing of best practices within organization – visibility across organization

27. Managed-BI Service Model for ITC
Client’s Client
Client Business Team
Client Partner
SLAs, Joint Planning, Escalations, Business requirements, Financials,
Change Management
ITCInfotech Client Management Team
BI Program Management
Business Analysts
BI Support
Security
Control
BI Application Portal (ITD, FBD, Hotels, LRBD)
Complexity Firewall
Managed Service Vendor Facilities
Knowledge Services
Business Analytics Services (Segmentation, Price Elasticity etc)
Business Optimization Services (Stock optimization, Route Opt)
Analytics Services
SME (SCM, CRMetc)
Analytics Experts
Quality Control
(Scorecards)
ITC Infotech Governance Measures
Reporting Services
Generate On–Demand reports, Alerts, Dashboards
Maintain ETL Reporting, Database applications
Architects
BI Engineers
ETL Engineers
DBA
Data Management Services
Master Data Management
Data Quality Management
Data Administrators
Data Analysts
Systems & Datacenter
Methodologies
& Processes
Infrastructure Services
Software Server Management
Hardware & network Management
Hardware Engineers
Network Engineers

28. Business-Analytics Scope of Integrated BI
Financial Analytics
Profitability Analysis
Financial Planning Accuracy
Working Capital Analysis
Brand Analytics
Category & Portfolio Analysis
Marketing Spend Effectiveness
Brand & Market Analysis
TM&D Performance Scorecard
Operational Analytics
Production & Planning Efficiency
Unit Level Scorecard & Automation
New Product Lifecycle Analysis
Vendor Scorecard
SCOR Measures
Customer Analytics
WD Profitability Analysis
Retail Outlet Analysis
Customer Service Effectiveness
Trade Marketing Analytics
Sales Analysis
Salesforce Analysis
Channel Analysis
Category Analysis
Trade Promotion Analysis
Workforce Analytics
Employee Attrition
Workforce Productivity
IR Effectiveness
Resource analysis

29. Business-Analytics Scope of Integrated BI
Distribution Performance
Supply Chain Planning efficiency
Supply Chain effectiveness
Supply Network efficiency
Warehouse Performance
S&OP Analysis
Forecasting Accuracy
Planning Adherence & efficiency
Variance Analysis
HR Performance
Recruitment Efficiency
HR Spend analysis
Working Environment Regulation Effectiveness
Payroll Efficiency
Project Performance Mgmt
Project Planning efficiency
Project Spend & vendor Analysis
Project Execution effectiveness
Project Risk Analysis
Corporate Sustainability Performance
Carbon footprint, variance & credit analysis
Sustainability Spend Analysis

30. Integrated EPM/BI Capability
Corp
Performance
TM&D
Perf
CBSC, Food,
PCB Perf
HR Perf
Brand Perf
Mgmt
Finance
Operations
Perf
HR Perf
Sales
Finance
Distribution
Emp Perf
Planning
Perf
Mkt Research
Perf
Portfolio
Perf
Procurement
Perf
R&D
Perf
Category
Perf
Promo Perf
Warehouse
Perf
Network
Eff
Dist
Perf
NPD
Perf
Plant
Perf
Workforce
Eff
Channel
Perf
Outlet Svc
Eff
Logistics
Perf
Branch
Perf
Emp
Eff WD
Perf
WSD
Perf
Route
Eff
Scheduling
Eff
Carrier
Eff AM
Perf AE
Perf