JD Users Demantra Overview

•The Foundation for the Demand-Driven Enterprise Understand, Predict, Proactively Manage

•JDE Users Group – November 16, 2006

Clete JohanningIndustry Business Unit – Application Sales

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Demand ManagementSales & Operations Planning

Trade Promotion Management

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Shape Demand

Understand Demand

Respond to Demand

Plan for Demand

Retail Planning & Store

Replenishment

Demand Management



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

Business Process PlatformBusiness Process Platform

Demantra’s End-to-End Solution

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Demantra’s Key Customer Segments

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Medical Devices

Media & Entertainment

Consumer Packaged Goods Consumer Durables

Quick Serve Restaurants

Demand Management

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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 TechnologyBayesian – Markov Modeling

“They say no two economists ever agree, so Chrysler tries averaging their opinions” - Wall Street Journal

“They say no two economists ever agree, so Chrysler tries averaging their opinions” - Wall Street 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 Yield Maximum Accuracy

His

tory

PO

SP

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otio

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ipm

ents

Estimator’s Models

Bayesian Estimator

Bayesian Combined

Model

Predictive Model

Causal Analysis

Outlier Detection

Promotion Events

Seasonality

Cyclical Patterns

Trend

Mul

tiple

Cau

sal F

acto

rs

Optimal Introduction

Seasonality of Products

Effect of Weather on Promotion

Effectiveness

Baseline

Promo Lift

Cannibalization

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Powerful Analytics Yield Maximum Accuracy

His

tory

PO

SP

rom

otio

nsSh

ipm

ents

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Optimal Introduction

Seasonality of Products

Effect of Weather on Promotion

Effectiveness

Baseline

Promo Lift

Cannibalization

Mul

tiple

Cau

sal F

acto

rs

Estimator’s Models

Bayesian Combined

Model

Predictive Model

Bayesian Estimator

Bayesian-Markov Modeling vs. Best Fit Approaches

SKU

Mea

n A

bsol

ute

Per

cent

age

Err

or

Source: Demantra CPG customer

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MAPE – Mean Absolute Percent ErrorMPE - Forecast Bias

Measure Performance Forecast Accuracy

WMAPE – Weighted MAPE

Demantra Customers are weighting by accuracy volume, revenue inventory cost12

Real-time Sales & Operations Planning

Overview

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Collaborative Real-Time Sales & Operations Planning

Across FunctionsInputs Outputs

Profitability

Service Levels

Inventory Levels

Promotion Effectiveness

Plan Accuracy

Sales Finance

ExecutiveProductDevelop-

ment

Consensus

Promotional & Volume Plans

Strategic Plans Marketing

Capacity Plans

PhaseIn/Phase Out Products

Demand Plans

Manufacturing

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Actual Shipments

Promotional Execution

In-FlightConsumption

Data

Sales Finance

ExecutiveProductDevelop-

ment

Consensus

Promotional & Volume Plans

Strategic Plans Marketing

Manufacturing

Capacity Plans

PhaseIn/Phase Out Products

Demand Plans

Profitability

Service Levels

Inventory Levels

Promotion Effectiveness

Plan Accuracy

AlertsExceptions

Inputs Outputs

Collaborative Real-Time Sales & Operations Planning

Across Functions

Real-time

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 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

Real-time Alerts, Exceptions &

Workflow messages

Advanced Worksheet tools

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Collaborative Worksheets

Business Hierarchy features ease of

navigation

Comprehensive data series

available out-of-the box

Integrated charting is

selectable on-the-fly

Online Notes and Audit Trail with digital

signature

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

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Develop Baseline ForecastStatistical Forecasting

Current date, past & future are color

coded for reference

View the statistical plan at any level of aggregation

Planner adjustments can

be entered, copy/pasted, or updated by the

system

On approval, system will

Alert all participants

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Develop Consensus PlanInputs display from entire collaboration group – Finance,

Marketing, Operations, etc.

Integrated approval workflow

process

Each S&OP participant has a

configurable role-based view

Review historical accuracy for each input

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Introduce New Products

Chain and view

demand of comparable

products

Run simulation on-the-fly

Accurately forecast

demand for the new product

Aligns forecast based on

actual demand

The system automatically

detects outliers

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Manage Promotions

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Manage Replenishments

View current inventory, along with min/max

levels

Adjust policy

parameters as needed

View inventory projections based on

safety-stock policies

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Measure PerformanceIntegrated KPI’s

KPI’s are fully configurable

from standard templates

KPI Measures can be in units or

currency, at any level of

aggregation

KPI Information may be forwarded as

Alerts, Exceptions and Workflow messages.

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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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Product Features

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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

Solution Comparison – EBS and E1

Vtech

VTech is a global provider of corded and cordless, telephones, electroniclearning 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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http://www.vtech.com/


Overview

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Promotion Planning Process

Monitor & Report

Budget, Volume & Spending

Post-Event Analytics

Pre-Event Analytics


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Define Trade Funds including

fixed and variable funding rates

View Fund Budget, Allocation and

Balances

Monitor Sales vs Quota

Screenshot


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View Cannibalization across Brands &

Promotional Groups

Cost/Benefit review of Planned Promotions

Drill-down into an individual promotional

event

Decompose lift to identify components

such as Pantry Loading

Screenshot


Monitor base and incremental volume

Report on Forecast vs Plan

Receive early warning on potential out-of-stock Review Promotion

Calendar

Screenshot


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Color coding highlights when results are better (green) or worse (red)

than plannedDrill-down into an

individual promotional event

Decompose lift to identify components

such as Cannibalization

Compare Planned vs Actual Results

Screenshot


Baseline

Manufacturer Retailer

Incremental

CompetitiveBrand

Switching

BrandGrowth

Pre/PostPromoEffect

BrandCannibalization

Baseline

CompetitiveAccountSwitching

CategoryGrowth

Pre/PostPromoEffect

Baseline

Data Intelligence

NetLift

Traditional Promotion Evaluation

CategoryCannibalization

Demantra’s Promotion Evaluation

Decomposition of the Promotional Lift

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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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Product Features

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SAP

TPM

Fund ManagementPromotion PlanningVolume PlanningScenario Analysis to evaluate Promotional Impact & ROI Post Promotion Evaluation Promotion pre/post effect Promotion Cannibalization Promotion Halo EffectPromotion OptimizationCommunication Plan to SCMMonitor & Align PlanPush Exception ManagementSyndicated Data interface

NoWeakPartialYes

Solution Comparison – TPM

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Trade PromotionPlanning

Demantra

Demantra

Deduction, and

SettlementMgmt

Siebel/EBS/E

Demantra

Trade PromotionExecution

Siebel/EBS/E

E1

JDE

Siebel, Oracle, PeopleSoft customers

JDE customers

Trade Promotion

Optimization

Demantra

Demantra

Demantra Trade Promotion Management

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

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Integration Overview

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Comprehensive Demand-Driven Planning Footprint

Demantra Trade Promotion Management

Sales and Operations Planning

Demand Management

Dem

and

Cha

in P

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ing

Oracle APS

Network Design

Inventory Optimization

Supply Planning

Supp

ly C

hain

Pla

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Global Order Promising

Collaborative Planning

Production Scheduling

ERP

Oracle EBS 11i.10

Oracle EBS 12

JDE EnterpriseOne 8.12

CRM

Siebel CRM

PromotionsModeling &

Management

Supply ChainExecution

Seam

less

Inte

grat

ion

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Oracle Demantra ProductsOracle Demantra

Product Function EBS E1 CRM (Siebel)

Demand Management Statistical forecasting, causal factors, New product intro, attribute based forecasting, editing, reporting, analysis, collaboration, events, exceptions etc.

Demand Planning Demand Forecasting and

Consensus

Advanced Forecasting and Demand Modeling

Compute and display individual causal contribution and cross-correlations

New Advanced Forecast Modeling

Real-time Sales and Operations Planning

Balance supply and demand, Synchronize marketing and supply chain on promotion plan, assimilate sales, finance, and operations into a cohesive planning process

New Sales and Operations Planning

Predictive Trade Planning Define promotions, compute and display lifts, halo and cannibalization effects, promotion effectiveness, scenario evaluation against profitability, quota, and allocated budget, event management

New New New

Deduction and Settlement Management

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

New New

Trade Promotion Optimization

Suggest optimum set of promotions to maximize ROI New New New

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SCBM

ProductionScheduling

StrategicNetwork

Optimization

Production andDistribution

Planning

XML

FlatFiles

DEM DemandManagement

DEM PredictiveTrade Planning

and Trade Planning

Optimization

XML

DemantraUDDM

FlatFiles

BatchExtracts

Scheduler

E1 ERP

E1 Integration

DataTables

E1 SCP

DEM Real-TimeS&OP

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E1 IntegrationKey features

• 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

Shape Demand

Understand Demand

Respond to Demand

Plan for Demand

Retail Planning & Store

Replenishment

Demand Management



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

Business Process PlatformBusiness Process Platform

Demantra’s End-to-End Solution

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Q &A

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Documents

JD Users Demantra Overview