Customized software protects against CPG promotion losses
By Joy LePree, contributing editor -- Manufacturing Business Technology, 6/1/2004 6:00:00 AM
With the successful history of the meatless Boca Burger venture on his résumé, Steven Spiegel figured he had the complex world of consumer packaged goods (CPG) figured out. So, after guiding Boca's sale to Kraft Foods, Spiegel joined another venture aimed at the frozen-foods aisle. However, when the new company, Chicago-based Forkless Gourmet, launched its line of "bun meal" entrees, Spiegel, as VP and CFO, faced a different challenge.
The small company—just 14 people—was selling 11 types of meals to various specialty food outlets around the country, each with its own pricing and promotions policies. This presented Forkless Gourmet with a huge matrix of pricing, promotion, and deduction programs that its sales force was unable to manage on field PCs.
"We needed a fully integrated solution that would allow us to provide outstanding customer service, keep headcount low, and minimize the financial risks of deductions," says Spiegel. "And finding one for a company of this size wasn't easy."
At Boca Burger, Spiegel used CRM software from SYSPRO. While he researched other alternatives, he selected SYSPRO again on the condition that the vendor provide a new CPG solution. In response, SYSPRO delivered a Trade Promotion Management System (TPMS).
"TPMS lets suppliers like Forkless Gourmet establish pricing and set promotion rules based on their own needs," says Joey Benadretti, a SYSPRO VP. "Suppliers may identify qualified promotions, automatically recalculate prices, track accrued promotions, and match them with deduction codes.
"Such functions are essential to small manufacturers," Benadretti continues. "If not managed properly, promotions and deductions can result in significant write-offs. In an effort to gain shelf space and grow sales, manufacturers and suppliers often allow promotional deductions without approvals, which can be costly and time-consuming to manage. TPMS provides controls that halt discount abuses."
To keep track of the company's different pricing options, the promotion management database feeds into the manufacturer's ERP system. A change made in the TPMS module automatically updates other modules in real time, allowing salespeople to present the right promotions to customers.
"This speeds customer service and cuts costs by eliminating paperwork such as price lists," says Spiegel. "More important, the promotional database saves us from becoming victims of deductions by determining whether a promotional deduction was valid. The deductions management module permits swift identification and handling of deductions. This is huge because if a deduction ages more than 90 days, it's rarely rectified."
Pricing flexibility was important too, Spiegel adds. "Other solutions offer contractual pricing, but that didn't work for us," he says. "We needed a solution that would dynamically price itself as the order was entered."
Forkless Gourmet prices on a combination of weight, mass, or volume; and national or regional distribution. TPMS automatically prices orders, which, concludes Spiegel, "ensures customers get the price they are entitled to, expedites service, and increases invoice accuracy."
Filling the gaps in S&OP
01/31/2009
Featured Company
Most Recent Resources
- FICO™ Xpress Optimization Suite Schedules Big Profits For Clients
- Strategic Pricing: Three Steps to Higher Profit Margins
- Driving Innovation Through Lean Product Development Practices
- Demand Planning Maturity Model Strategies for Demand-Driven...
- Simulation-Driven Product Development:Will Form Finally Follow...
