•The Foundation for the Demand-Driven

Enterprise Understand, Predict, Proactively Manage

•JDE Users Group – November 16, 2006

Clete Johanning
Industry Business Unit – Application Sales

1
 Demand Management
Sales & Operations Planning
Trade Promotion Management

2
 Demantra’s End-to-End Solution

Plan for Demand Understand Demand

Real-Time
Real-Time Sales
Sales and
and Operations
Operations Planning
Planning

Retail Planning
Trade
Trade Promotion
Promotion Demand & Store
Management
Management Management Replenishment

Business
Business Process
Process Platform
Platform

Shape Demand Respond to Demand

3
 Demantra’s Key Customer Segments
Consumer Packaged Goods Medical Devices Consumer Durables

Quick Serve Restaurants Media & Entertainment

4
Demand Management

5
 Demand Management
• Statistical Forecasting
• Bayesian-Markov Mixed Model Programming
• Causal forecasting
• ‘Out of box’ accuracy to the half-hourly bucket
• Store level forecasting based on POS data
• Support for Multiple Demand Streams
• Consensus Forecasting
• High-volume Forecasting
• Workflow, Alerts, and Exceptions
• Multi-dimensional analysis, reports, and graphs
• Flexible OLAP Worksheets

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 Demand Management Differentiators
• Manage at any level of time, product and location aggregation
• New Product Introduction
• Supports product lifecycle management
• Chaining capabilities to existing products
• Shape Modeling
• Use comparable products demand shapes as input
• Generate composite new shape and align to actual demand
• Attribute Based Forecasting
• Analyze demand for a group of combined attributes
• Uses business rules for product level modeling
• Assumption Planning
• Supports qualitative forecasting
• Current and past assumptions are modeled

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 Advanced Demand Modeling Technology
Bayesian – Markov Modeling
“They
“They say
say no
no two
two economists
economists everever agree,
agree, so
so Chrysler
Chrysler tries
tries averaging
averaging
their
their opinions”
opinions” -- Wall
Wall Street
Street Journal
Journal

• We find the Models that will produce the best forecast for the historical data.
• We identify the best combination out of many models - each contributes forecast
characteristics to the overall combined model.
• We give each selected model its weight according to the extent each one of them explains
the data.
• We create a “hybrid weighted average model” ranked by an objective criterion – Success.
• Does not rely solely on history - incorporates external information and Causal Factors.

The solution…. is designed to be "complex on the inside, so that it is simple on the

outside”. This means it needs less tuning and less experienced demand planners will find it
easier to work with than many solutions. – ARC, June 2006

“From an isolated process to a full Demantra RT S&OP - within six weeks of going live
our ‘A-items’ improved 45% in accuracy.” – Sagi Srinivas, Johnson & Johnson MD&D

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 Powerful Analytics
Promotions
Yield Maximum Accuracy

Estimator’s Models
Promotion Events

Seasonality Optimal
Introduction
Multiple Causal Factors

Seasonality of
History

Products
Causal Analysis
Effect of
Bayesian Weather on
Bayesian Trend
Predictive
Promotion
Estimator Combined Model
Effectiveness
Model
POS

Baseline

Promo Lift

Cyclical Patterns Cannibalization

Shipments

Outlier Detection

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 Powerful Analytics
Promotions
Yield Maximum Accuracy

Estimator’s Models

Optimal
Introduction
Multiple Causal Factors

Seasonality of
History

Products

Effect of
Bayesian Weather on
Bayesian Predictive
Promotion
Estimator Combined Model
Effectiveness
Model
POS

Baseline

Promo Lift

Cannibalization
Shipments

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 Bayesian-Markov Modeling
Mean Absolute Percentage Error
vs. Best Fit Approaches

SKU
Source: Demantra CPG customer

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 Measure Performance
Forecast Accuracy

MAPEWMAPE
– Mean
MPE–Absolute Percent
-Weighted
Forecast Bias Error
MAPE
Demantra Customers are weighting by accuracy volume, revenue inventory cost
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 Real-time Sales &
Operations Planning

Overview

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 Collaborative Real-Time
Sales & Operations Planning
Inputs
Across Functions Outputs

Marketing
Strategic Plans Profitability
Sales Finance
Promotional &
Service Levels
Volume Plans
Consensus
Demand Plans Inventory Levels

Promotion
Capacity Plans Product
Executive Develop- Effectiveness
PhaseIn/Phase ment
Out Products Manufacturing Plan Accuracy

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 Collaborative Real-Time
Sales & Operations Planning
Inputs
Across Functions Outputs

Marketing
Strategic Plans Profitability
Sales Finance
Promotional &
Service Levels
Volume Plans
Exceptions Alerts
Consensus
Demand Plans Inventory Levels

Promotion
Capacity Plans Product
Executive Develop- Effectiveness
PhaseIn/Phase ment
Out Products Manufacturing Plan Accuracy

In-Flight Real-time
Actual Promotional Consumption
Shipments Execution Data
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 RT S&OP Collaborative Process

• Collaborative Process Enablers

• Develop Baseline Forecast
• Develop Consensus Plan
• Introduce New Products
• Manage Promotions
• Manage Replenishment
• Measure Performance

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 RT S&OP Collaborative Process

• Collaborative Process Enablers

• Develop Baseline Forecast
• Develop Consensus Plan
• Introduce New Products
• Manage Promotions
• Manage Replenishment
• Measure Performance

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 Collaborative Portal

Integrated,
Configurable KPI’s

Advanced
Worksheet tools

Real-time Alerts,
Exceptions &
Workflow
messages

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 Collaborative Worksheets
Online Notes and Audit
Trail with digital
signature

Business Hierarchy
features ease of
navigation

Comprehensive
data series
available out-of-the
box

Integrated
charting is
selectable on-
the-fly

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 RT S&OP Collaborative Process

• Collaborative Process Enablers

• Develop Baseline Forecast
• Develop Consensus Plan
• Introduce New Products
• Manage Promotions
• Manage Replenishment
• Measure Performance

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Develop Baseline Forecast
Statistical Forecasting

On approval,
system will
Alert all
participants

Current date, past

& future are color
coded for Planner
reference adjustments can
be entered,
copy/pasted, or
View the updated by the
statistical plan system
at any level of
aggregation

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 RT S&OP Collaborative Process

• Collaborative Process Enablers

• Develop Baseline Forecast
• Develop Consensus Plan
• Introduce New Products
• Manage Promotions
• Manage Replenishment
• Measure Performance

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Develop Consensus Plan
Inputs display from
entire collaboration
group – Finance,
Marketing,
Operations, etc.

Each S&OP
participant has a Integrated
configurable approval workflow
role-based view process

Review historical
accuracy for
each input

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 RT S&OP Collaborative Process

• Collaborative Process Enablers

• Develop Baseline Forecast
• Develop Consensus Plan
• Introduce New Products
• Manage Promotions
• Manage Replenishment
• Measure Performance

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 Introduce New Products

Run Aligns
simulation forecast
on-the-fly based on
Accurately
The system actual
forecast
automatically demand
demand for
Chain and detects the new
view outliers product
demand of
comparable
products

25
 RT S&OP Collaborative Process

• Collaborative Process Enablers

• Develop Baseline Forecast
• Develop Consensus Plan
• Introduce New Products
• Manage Promotions
• Manage Replenishment
• Measure Performance

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Manage Promotions

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 RT S&OP Collaborative Process

• Collaborative Process Enablers

• Develop Baseline Forecast
• Develop Consensus Plan
• Introduce New Products
• Manage Promotions
• Manage Replenishment
• Measure Performance

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 Manage Replenishments
View current View inventory
inventory, along projections
with min/max based on
levels safety-stock
policies

Adjust
policy
parameters
as needed

29
 RT S&OP Collaborative Process

• Collaborative Process Enablers

• Develop Baseline Forecast
• Develop Consensus Plan
• Introduce New Products
• Manage Promotions
• Manage Replenishment
• Measure Performance

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 Measure Performance
Integrated KPI’s

KPI Information may

be forwarded as
Alerts, Exceptions and
Workflow messages.

KPI Measures can

be in units or
KPI’s are fully currency, at any
configurable level of
from standard aggregation
templates

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Why Customers Buy Demantra for S&OP

• Gold Standard for Demand Driven Supply Network Vision

• Real-Time, Demand-Driven Planning Applications
• Most Sophisticated Planning Statistics - “out of the box”
• Integrated Analytics Platform
• Collaborative Planning Environment Driven By Workflow

• Technology - Scalability supports granular forecasting

• Shelf/Rack/Store/DMA/DC x sku/item x week/day/hour
• Automation and Scalability for Granular Demand Data Visibility
• Business Process Management with Exception Processing

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 Solution Comparison – EBS and E1

Demantra + Oracle
No

Manugistics
Weak

Oracle DP
Product Features Partial
Yes

SAP

i2
Demand management
Statistical forecasting
Multi-dimensional analysis and reporting
Consensus forecasting
High volume forecasting
Demand shaping (NPI, phase-outs, adjustments etc.)
Trade promotion planning and optimization
Promotion modeling to estimate volume lifts
Scenario analysis to evaluate promotional impact
Optimal promotional spend
Sales and operations planning
Alerts, workflows, and KPIs based automation
Revenue and margin analysis
Demand and supply matching

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 Vtech

VTech is a global provider of corded and cordless, telephones, electronic

learning products and contract manufacturing services
• Challenge
• Improve service levels and on-shelf availability with big box retailers in order to
increase revenues, while keeping inventory levels and minimizing logistics costs
• Strategy
• Implement a consumer driven planning process with retailers to reach a one-
number plan using POS data and retailer merchandising schedules
• Solution
• Real-time Sales & Operations planning
• Results
• Rapid time-to-benefit with implementation in 90 days
• Increased order fill rate from 55% to over 95%
• Increased inventory turns from 3x to 6x per year
• Reduced retail compliance fines by 85%
• Reduced logistics costs by 65%
• Reduced price protection claims by 40%

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Trade Promotion
Management

Overview

35
 Promotion Planning Process
Budget, Volume
Pre-Event Analytics
& Spending

Trade Promotion Management

Monitor & Report Post-Event Analytics

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 Screenshot

Trade Promotion Management

Define Trade
Funds including
fixed and variable
funding rates

View Fund Budget,

Allocation and
Balances

Monitor Sales vs
Quota

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 Screenshot

Trade Promotion Management

Cost/Benefit review of
Planned Promotions

Drill-down into an
individual promotional
event

View Cannibalization
across Brands &
Promotional Groups

Decompose lift to
identify components
such as Pantry Loading 38
 Screenshot

Trade Promotion Management

Report on Forecast vs
Plan

Receive early warning on

potential out-of-stock
Review Promotion
Calendar

Monitor base and

incremental volume

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 Screenshot

Trade Promotion Management

Compare Planned vs
Actual Results

Color coding highlights

when results are better
(green) or worse (red)
than planned
Drill-down into an
individual promotional
event

Decompose lift to
identify components 40
such as Cannibalization
 Decomposition of the Promotional Lift
Data Intelligence
Brand Category
Cannibalization Cannibalization

Pre/Post Pre/Post
Promo Promo
Effect Effect
Incremental
Brand Category
Growth Growth
Net
Competitive
Brand
Lift Competitive
Account
Switching Switching

Baseline Baseline Baseline

Manufacturer Retailer
Traditional Promotion Evaluation Demantra’s Promotion Evaluation
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 Why Customers Buy Demantra for Trade
Promotion Management
• Improve the efficiency and effectiveness of their trade dollars
• Increase their promotional impact without increasing their trade budget
• Reduce their trade budget while maintaining the same level of promotional impact
• Predict the impact of future promotions
• Base and Incremental Volume
• Cost, Profitability, and ROI
• Optimize promotions based on
• Goals - profit, revenue, units and constraints - budget, timing, retail margin
• Calculate the true “Net Lift” of a promotion by identifying cannibalization and
pantry loading
• Collaborative solution that can be extended to additional functional areas both
internally (sales, marketing, finance,…) and externally (brokers, distributors,
retail partners,…)
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 Solution Comparison – TPM No
Weak
Partial
Yes

Oracle Siebel + Demantra

JDE + Demantra
Product Features

Oracle Siebel

Synectics

SAP TPM
Gelco
CAS
Fund Management
Promotion Planning
Volume Planning
Scenario Analysis to evaluate Promotional Impact & ROI
Post Promotion Evaluation
Promotion pre/post effect
Promotion Cannibalization
Promotion Halo Effect
Promotion Optimization
Communication Plan to SCM
Monitor & Align Plan
Push Exception Management
Syndicated Data interface
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 Trade Promotion Management
JDE

Trade Trade Deduction, Trade

Promotion Promotion and Promotion
Optimization Planning Settlement Execution
Mgmt

Siebel, Oracle,
Demantra Demantra Siebel/EBS/E Siebel/EBS/E PeopleSoft
customers

E1
Demantra Demantra Demantra JDE customers

Demantra Trade Promotion Management

44
 Customer: Welch’s
• Welch’s is the world’s leading processor and marketer of grape-based products
• Challenge
• Manage, analyze and understand the effectiveness of the thousands of trade
promotions that run annually
• Improve sales force productivity
• Analyze risks with respect to spending, revenues and profits
• Strategy
• Integrate trade promotion management, demand planning and promotion
analytics to provide an accurate one-number plan across the company
• Automate trade promotion management and sales planning to increase sales
force productivity, increase promotion ROI, and drive supply chain efficiencies
• Solution
• Demand management, Trade Promotion Planning and Optimization
• Results
• One-number Plan, with increased SKU-level accuracy
• Overall reduction in trade spending
• Significant savings in supply chain costs
• Productivity improvements in headquarter sales, field sales and broker sales force
45
Integration
Overview

46
 Comprehensive Demand-Driven
Planning Footprint
Promotions
Demantra Modeling & CRM
Demand Chain Planning
Trade Promotion
Management
Management Siebel CRM

Sales and
Operations Planning

Integration
Seamless
Demand Management

Oracle Network Design ERP

APS
Supply Chain Planning

Inventory Optimization Oracle EBS 11i.10

Supply Planning
Oracle EBS 12
Global Order Promising Supply Chain
Execution
Collaborative Planning JDE EnterpriseOne 8.12

Production Scheduling

47
 Oracle Demantra Products
Oracle Demantra CRM
Function EBS E1
Product (Siebel)
Demand Management Statistical forecasting, causal factors, New product Demand Planning Demand
Management

intro, attribute based forecasting, editing, reporting, Forecasting and

analysis, collaboration, events, exceptions etc. Consensus
Demand

Advanced Forecasting Compute and display individual causal contribution New Advanced
and Demand Modeling and cross-correlations Forecast Modeling

Real-time Sales and Balance supply and demand, Synchronize marketing New Sales and
Operations
Sales and

Operations Planning and supply chain on promotion plan, assimilate Operations

Planning

sales, finance, and operations into a cohesive Planning

planning process

Predictive Trade Planning Define promotions, compute and display lifts, halo New New New
and cannibalization effects, promotion effectiveness,
scenario evaluation against profitability, quota, and
Trade Promotion

allocated budget, event management

Management

Deduction and Reconcile deductions and payments with proof of New New
Settlement Management performance from your customer (retailer) per
promotion terms

Trade Promotion Suggest optimum set of promotions to maximize ROI New New New
Optimization

48
 E1 Integration E1 SCP

E1 ERP Strategic
Network
Optimization
Scheduler
Flat XML XML Production and
SCBM Distribution
Files
Planning

Batch Production
Extracts Scheduling

DEM Demand
Management

Flat Demantra DEM Real-Time

Files UDDM S&OP
Data
Tables
DEM Predictive
Trade Planning
and
Trade Planning
Optimization

49
 Key features E1 Integration

• Utilize E1 flat file extracts

• Extracts enhanced to support incremental
extraction
• For example: “most recent 4 weeks of sales
history”

• Demantra forecasts output to E1

• SCP (SNO, PDP, PS) access Demantra
output via existing E1-SCBM integration
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 Demantra’s End-to-End Solution

Plan for Demand Understand Demand

Real-Time
Real-Time Sales
Sales and
and Operations
Operations Planning
Planning

Retail Planning
Trade
Trade Promotion
Promotion Demand & Store
Management
Management Management Replenishment

Business
Business Process
Process Platform
Platform

Shape Demand Respond to Demand

51
Q &A

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