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SAP supply chain
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Knowledgebase » Volume 8 (2010) » Update 2 Improve Promotion Execution with Responsive Promotion Management in SAP SNC
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Learn how using dynamic or reactive promotion management — rather than static promotion management — can reduce the risk for stock-out situations and overstocking at the retailer. This approach directly contributes to the success of a promotion and therefore to the company’s top-line results. |
| Key Concept |
| As part of the Responsive Replenishment scenario, the SAP Supply Network Collaboration (SAP SNC) includes a responsive promotion planning process. It automatically adjusts the promotion shipments from the manufacturer to the retailer based on the actual store shipments reported by the retailer. SAP SNC is part of SAP SCM as of SAP SCM 4.1. |
Retailers and product manufacturers alike heavily invest in promotions such as coupons, special displays with price discounts, “buy one, get one free” deals, and other promotional techniques. A high percentage of the overall marketing budget is linked to promotions, which have a significant effect on the top line of consumer product companies and retailers.
Imagine a promotion with a price reduction during the holiday season, the busiest shopping time of the year. A retailer who runs out of stock during the promotion would suffer a major loss of sales. With sufficient supply, the promotion would have run successfully.
We will describe how SAP Supply Network Collaboration (SAP SNC) responsive promotion management can react to the actual sales data in a timely and automated fashion, adjust promotion replenishment dates or quantities, prevent out-of-stock situations, and increase product sales at the store. For more information on SAP SNC, see our article Improve Forecast Quality with Sales Forecast Collaboration Using SNC and APO published in the November 2008 SCM Expert.
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