Tuesday, October 14, 2014

Oracle Trade Management - OTM

Oracle Trade Management addresses the following critical business requirements of Business-to-Business (B2B) and Business-to-Consumer (B2C) industries:
  1. Budget management
2.  Trade planning and offer management
3.  Claim and deduction management
4.  Indirect sales management
5. Indirect Inventory tracking
1. Budget management
Budget management is the first step of Trade Management/ Trade Planning.
The Budget functionality provides centralized information of all the sales and trade promotion activities, and fund usages. This enables us to plan and track fund usage and ensure that resources are deployed effectively. It offers access to historical sales and pricing information, which we can use to plan for budgets based on facts.
We can create a budget, transfer funds between budgets, allocate a budget, accrue budget based on sales, and perform budget adjustments. You can create and reserve budgets for specific products or geographic locations. You can track budget utilization at any point of time, and view payment details and statuses of all the trade promotion activities that are associated with a budget.
Name of Budget, Category, Start date and Ledger is mandatory for defining a budget. Default Status is entered, Once budget is approved, its status changes from entered to Active. Once budget is Active it can only be closed or cancelled.
Sales Account gets defaulted from System Options setup defined.
Market eligibility of Budget decides criteria of its application.
2. Trade planning and offer management
The Offers functionality simplifies the process of discount planning, execution, and tracking. Depending upon the requirements and the results to be achieved, we can plan and create different kinds of offers. We can associate offers with products or campaigns, predict the performance of new offers, and create adjustments to active offers. We can also track and monitor the costs and revenues for active offers.
Each Offer has to be connected with a Budget.
Market Eligibility: Market eligibility tab, decides the criteria for execution of offer.
It Consists of Market Context, Context Attribute, Condition, Attribute Value and Group number.
Oracle has functionality of group number.
Discount Table
We can track discounts earned by offer in following way.
In this example, when quantity of sales Order is in between 0 to 5, discount rate is 1%. If quantity is in between 6 to 10, discount is 2%.
Below example shows, which all the products are eligible for discounts.
We can also, track discounts in terms of Amount.
3. Claim and deduction management
Claims and deductions form an important aspect of B2B operations. Deductions are created when customers short pay for various reasons such as to claim compensation for shipping errors, pricing errors, and to claim promotional earnings. Customers submit claims for various reasons such as overpayments that have been made by mistake, compensation for damaged goods, claims for promotional accruals, and so on.
The Claims functionality enables organizations to shorten the claims-processing cycle, and reduce claims and the associated costs. Information related to all the claims is stored in a centralized manner. This makes it possible to access accurate views of promotional payments and other customer claims and disputes. We can research, validate, and settle deductions, charge backs, and claims. We can also identify invalid and duplicate claims and prevent unauthorized claims and deductions.
Claim Header
Claim Lines
Status of Claim is Open, when it is created. After approval, its status changes to Pending close and a line is entered in Settlement page of claim.
4.  Indirect sales management
The Indirect Sales Management functionality enables manufacturers to validate requests from retailers and wholesalers (or dealers and distributors), and manage and track funds when trade promotion activities are executed indirectly through retailers and wholesalers. We can manage these scenarios, and validate, track and settle the related claims. The Indirect Sales Management functionality includes Chargeback, Third Party Accruals, Indirect Inventory Tracking, Special Pricing, Soft Funds, and Referral Management.
5. Indirect Inventory Tracking
The inventory levels of wholesalers can be automatically tracked in Oracle Trade Management. We can track the quantity of products that wholesalers have purchased from our organization and the quantity of products that they have sold, and also make adjustments to the wholesalers’ inventory levels.
Process Flow
Trade Promotion –Forecasting to Execution Scenario
Michelin has manufactured and launched a new product. Because the product is new in the market, not many customers are aware of the product, and the product has not been selling well. The Sales Management decides to promote the product. The Sales Management creates a plan to promote and advertise this product in the market.
Sales Manager decides to promote this product by creating an accrual offer to give delayed discounts on purchases of the new product within the first three months. You wish to find out how well the offer would perform, and then activate the offer. You also plan to settle accruals and pay customers automatically.
Creating an Offer-related Claim and settling it by Check Payment Scenario:
Michelin wants to promote a new tyre. To do this, Marketing department creates an accrual type offer for a particular customer, ABC Stores. The offer states that ABC Stores would receive 10% off on  all purchases of the new tyre for a 3 month period. The 10% savings is accrued during that period. ABC Stores has now submitted a claim requesting payment for their accruals by check.
Process Flow:
  1. Create a claim.
  2. Associate Earning
  3. Select settlement method
  4. Import in Accounts Payables
  5. Search Standard Invoice
  6. Create check
  7. View Budget Utilization
  8. View closed claim
Creating a Volume Offer
Volume offers are created for customers as in if customer purchases high volume, Offer will be provided.
Volume offers are created to encourage customers to buy high volumes of products. This business user flow describes how to create a Volume offer that has different discounts based on the amount of products purchased, and settle the related deduction through an on-account credit memo.
Michelin wishes to encourage its customers to purchase a particular product in large quantities. Michelin Sales Manager decides to create a Volume offer to encourage a particular customer—ABC Ltd. to buy the product in higher quantities. The discounts vary for a range of quantities of an item that is purchased. If ABC Ltd. purchases quantities in a higher range, they receive higher discounts. When ABC Ltd.  reaches a higher sales level, they can get discounts even retroactive to the previous purchases. To achieve this, Michelin creates a Volume offer to offer discounts to ABC Ltd and sources funds for this offer from an existing budget. ABC Ltd.  starts placing orders after the offer becomes active, and accrues discounts accordingly. Instead of submitting claims,ABC Ltd. takes a deduction for the amount that Michelin owes them. Michelin plan to settle these deductions by issuing on-account credit memos.
Process Flow
Example of Volume Offer
In Above Example, if quantity of sales order is less than 5, Discount is 1%. If, quantity of sales order is in between 6 to 10, discount is 2%, whereas, if quantity is between 10 to 99999, discount is 3 %.

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