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Sorocaba Refrescos Increases Gross Margin by Analyzing Customer Profitability Data
While they expertly deliver innovation and quality to their customers, Callaway Golf’s previous planning and reporting tool wasn’t making the cut. To evolve their enterprise, the sports giant decided to replace their outdated planning software with SAP Analytics Cloud for planning.
Together with Avvale, Callaway Golf successfully implemented SAP Analytics Cloud across their global enterprise in just 6 months. Now, Callaway Golf has a single, consolidated planning solution that has enabled streamlined expense and asset plans so they can focus on what they do best– revolutionizing the sporting world with cutting edge equipment.
Sorocaba Refrescos, a leading player in the Brazilian beverage industry, has grown from a local company to a national powerhouse. Its extensive product portfolio includes carbonated drinks, fruit juices, energy beverages, and bottled water, all crafted with a commitment to quality and innovation.
Employing advanced manufacturing techniques, Sorocaba Refrescos ensures product consistency and safety. Its robust distribution network guarantees widespread availability, while sustainability initiatives highlight its environmental responsibility. This evolution from a small enterprise to an eco-conscious industry leader underscores the company's enduring impact on the market.
The Challenge
Prior to Soracaba engaging Avvale's services, the company was facing several challenges related to data collection on customer profit margins. Previously, this process took place every quarter, due to the large volume of information and the significant cost involved in hiring an external consultancy for this specific task. This restrictive approach hindered agility in implementing short-term sales strategies, given the sensitive nature of customer data and the quarterly collection and compilation of information.
The Approach
In order to overcome these challenges, Avvale closely collaborated with the client to address its needs. The controllership area implemented the Oracle EPM Cloud Planning tool to handle the company's budget planning. This initiative has reduced the time required to close and analyze financial information for the Controller's Office, thereby speeding up all information deliveries to its internal customers.
At this point, the Commercial Finance team identified potential in the solution to execute the criteria for allocating expenses by client and generating a monthly expenditure base.
With extensive experience in implementing profitability solutions for other clients, Avvale carried out a comprehensive assessment to map out the process, suggest changes, and draw up an execution plan to create a robust and permanent tool that would meet the area's needs.
This solution provides enough flexibility to manage allocations, scalability to include new apportionment criteria, and, most importantly, to calculate indicators quickly, empowering the company to devise more efficient short-term strategies.
The core components of the solution involved the integration of revenue and cost data per customer, the inclusion of expenses from the sales, logistics, and marketing areas, and the provision of user-defined criteria for allocating expenses to customers.
The Challenge
Before integrating SAP Analytics Cloud, Callaway Golf's planning landscape centered around SAP's legacy planning solution, Business Planning and Simulation (BPS). While BPS met Callaway Golf's planning needs for many years, the enterprise began to experience limitations with their old solution:
- Disconnected plans across the board: As Callaway Golf expanded and acquired new brands, planning processes greatly differed across the enterprise with some business units using Excel spreadsheets and others using legacy solutions for planning.
- Outdated planning functionalities: The existing legacy planning solution lacked many modern functionalities. Among them, salary calculations and asset depreciation automation needed improvement. As a result, it became difficult to create detailed and accurate forecasts across the globe.
- Significant IT support: The legacy solution required continuous management from IT to maintain runtime. IT had to carve out a full day every week to manually maintain the solution.
- No single source of truth: Various departments and brands used different data sources, which led to data silos across the organization, making it difficult to gain a clear picture of the enterprise's planned expenses.
- Rigid user interface: Legacy forecasting system was difficult to navigate and lacked working functions and calculations across the board, such as planning on depreciation and existing assets, adding vendors or members on the fly, and breaking down their cost center expense planning forecasts.
The Approach
With Avvale experts on their side, Callaway Golf laid out the following goals for their new planning landscape with SAP Analytics Cloud:
- Crowdsource and consolidate plans across the enterprise to gain a global overview of their planned expenses and expand the input capabilities to each responsible owner.
- Leverage elevated planning functionalities to create faster and more accurate forecast cost center expense and asset reports. The ability to customize calculations enhances and automates the reporting metrics.
- Harness the power of self-service analytics to alleviate IT from the burden of simple maintenance and data entry requests, so they can focus on high-ROI tasks.
- Maximize user-driven admin capabilities to control the management of calculations and forms.
- Create new KPls driven by the business needs.
When SEM-BPS was the center of Callaway Golf's planning landscape, flexibility was a huge factor that was missing. SAP Analytics Cloud contains powerful scenario planning capabilities that help organizations quickly uncover actionable insights to make data-driven decisions. For Callaway Golf, SAP Analytics Cloud's modern planning functionalities provided users with the ability to:
- Add members on the fly
- Plan on existing as well as planned assets and automatically calculate the depreciation of values
- Test "what-if" scenarios for deeper analysis by creating private versions of plans
- Customize the solution based on their current business process
- Perform driver-based calculations
- Empower users to execute end-to-end planning scenarios, without the help of IT
The Impact
By allocating data according to customer segmentation, Sorocaba is now able to generate a service margin for each point of sale and product sold. This process was carried out in two distinct phases:
- The daily one, yielding gross margin information to support the sales team directly engaged with clients and monitor sales execution in relation to the target set.
- The second phase was the monthly closing, where the already accounted-for expense data in the support areas is allocated by the client to make up the profitability of each point of sale.
This made it possible to identify and classify customers, measure the main expenses, and define sales strategies to increase production efficiently and assertively. The result was an improved product mix offered at each point of sale, resulting in an enhanced business margin. Implementing Oracle EPM saved operational time and allowed the sales team to concentrate on analyzing and fine-tuning processes to deliver more effective customer service, thus optimizing production and logistics, with a lasting and positive impact on the overall process.
