Salient Margin Minder · Introduction Visibility Drives Performance 6 ®How Margin Minder Max works...

Salient Margin Minder® MaxMaximum Performance for the Soft Drink Business

Visibility Drives Performance

Introduction Visibility Drives Performance 6 How Margin Minder® Max works 7

Managing the Marketplace The Basics (sales, revenue, cost, margin) 8 Promotions 11 Customer Development Agreements (CDA/CMA) 12 Merchandising Space & shelf management 13 Displays 14 Marketing Equipment (capital, parts, labor) 15 Point of Sale Materials 16 Making “The Best Case” for Retailers 17 Collections 18

Monitoring Operations Efficiency Delivery 19 Supply Chain 20 Loading 21 Vehicle Tracking 22

Full Service / Full Line Vending 23

Getting to “Dead Net” Margin Minder® Max Brings It All Together 25 The Dynamic P&L 26

Margin Minder® Max Capability Summary 28Testimonials 29

Salient Margin Minder® Maximum Performance for the Soft Drink Business

Table of contents

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Bottlers operate at all points of the supply chain. They manufacture, deliver and merchandise at retail. They have many complex trading arrangements with both suppliers and customers, with frequent price promotions, extensive investments in materials and equipment, and direct and indirect payments for feature advertising and other retailer activities.

MARGIN MINDER® “MAX” accounts for value contribution... revenue, cost containment, profit and loss, productivity and efficiency. It takes data from any source... invoices, load sheets, work orders, payroll files, etc... and then organizes these data streams into a management information super-store that mirrors a bottler’s unique business environment. Every manager, from the top to the street, gets a super-fast, easy-to-use toolkit to manage the information interactively. MAX lets them easily interrogate huge data bases and then just as easily visualize how individual decisions drive results. MAX runs on Salient’s UXT® technology, the world’s most advanced platform for business activity monitoring.

INTRODUCTION

VISIBILITY DRIVES PERFORMANCE

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Just double-click to list customers who didn’t buy Our Cola.

Another click reveals which products they did buy.

On the following pages, you’ll see more examples that represent how different department managers and executives might see their information through MAX.

HOW MARGIN MINDER® MAX WORKS

It’s completely dynamic...Every view is always up-to-date and interactive, which means users can start from anyplace and quickly go anywhere... drill down into the dis-trict, brand, key account that isn’t meeting expectations... zoom in on a particular week or day, etc. For example, here is a 10-second graphical drill to find distribution voids.

INTRODUCTION

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Compare Volume, Revenue, and

Margin vs. a Year Ago or Any

Other Time.

Compare Multiple Timeframes

(this week, four weeks, thirteen weeks, and year-

to-date)

THE BASICS (Sales, Revenue, Cost, Margin)

MANAGING THE MARKETPLACE

The marketplace is the core of every bottling business and most of its history is recorded on invoices. MAX organizes every relevant sales fact

(sales, revenue, cost, margin, etc.) according to the many dimensions of the soft drink business so that everyday managers can explore and dis-

cover answers to the critical questions and seize opportunities faster than ever before.

Typical Applications

• Create a “morning review” to examine the performance of yesterday, last week, month, period, etc. Compare results to budgeted goals.

• Compare Sales, Revenue, Cost of Goods, Discounts, Margin, etc. between any timeframes, organized by any attribute, Region, Channel, Brand,

Package, etc.

• Identify unjustified price breaks.

• Analyze market penetration, product cannibalization, etc.

• Find customers, sales representatives, products, etc. who aren’t meeting expectations.

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Compare Year over Year Volume Trends by Key Account.

Scatter, then list customers who are receiving price breaks they don’t deserve.

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Penetration and Trial. How quickly is the marketplace adopting a new product?

Customers who haven’t tried the prod-uct.

Customers who purchased the product at least once, but aren’t buying regularly.

Customers who are consistently buying the new product.

THE BASICS (SALES, REVENUE, COST, MARGIN)


List customers who aren’t buying the new products.

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Depth / Frequency Analysis.

Track promotional efficiency for one product in one account over time. (This can done at any level).

Watch for Product Cannibalization.

Did the promotion take away from other product sales or have real impact on overall volume?


PROMOTIONS

Invoices tell the tale of promotional performance. Sales and margins are influenced by price, but this equation changes over time and from one

customer to another. A graphic can show, for each customer, when a product is priced too low for profit or too high for volume or too frequently

to keep the consumer’s interest. With this kind of information, a manager can optimize promotional mix:

Drill in on any date range to view details.

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CUSTOMER DEVELOPMENT AGREEMENTS

Many business costs can’t be found on invoices. Instead, they reside in marketing agreements, payroll records, advertising budgets, warehouse

records, etc. MAX can spread any costs and revenues (e.g. CDAs, CMAs) to the per unit/customer/product level for the customers and products in

any grouping, by any business dimension, for any timeframe.


• Distribute marketing expenses (ad costs, rebates to customers, etc.) to a group of customers and/or products over a particular timeframe.

• Track incoming rebates from the manufacturer.

How much am I making per unit of sales after all revenues and expenses, from the whole company all the way down to the

individual customer?

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MERCHANDISING - Space & shelf management

MAX can integrate survey and syndicated data on shelf space to show the effect of changes in space allocations on sales results. As always, the

information is always current and available on demand.


• Monitor inventory / allocation of any / all SKUs by store or any roll up such as chain or channel.

• Spot trends and possible problems.

• Determine real sell-through and profit for presentations to retailers.

• Track pricing throughout off-premise chains and at store level.

• Correlate causal changes in shelf space or position with changes in results of sales, volume, revenue, cost or margin. Evaluate from any per-

spective such as chain, channel or territory.

• Monitor days on hand / out of stocks (own and competitors).

• Identify opportunities for increased sales. Optimize product turns.

Compare. Space Vs Volume / Revenue / Margin (facings / cubic / square feet / linear feet).

Here we introduce a new kind of data (shown in pink) that tracks business conditions or “causals”.

Compare.(facings / cubic / square feet / linear feet).

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Compare Shares of Volume on Display and Number of Displays.

MERCHANDISING - Displays


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MAX integrates information about number, type, and volume on display, as well as competitor information to help managers monitor display activity

and control performance.


• Compare your displays to competitor displays. Obtain and maintain the “market share”.

• Measure the effect of displays on sales volume, revenue, and margin.

Trend. Sales Volume Vs Display Activity.

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Analyze Repair Costs and Depreciation by Equipment Type.

List Assets or Customers with the Most Repair Calls.

This data type shows the number of times something happens, e.g. num-ber of work orders.

MERCHANDISING - Marketing equipment (capital, parts, labor)

Many bottlers keep information from their asset, maintenance, and repair operations. MAX integrates this information to provide a clear picture of

the true cost of service. MAX delivers the right answers on demand to reduce parts, labor, and travel costs, optimize quality of service (response

time, time to service completion, etc.) and more.


• Eliminate assets, locations, or customers that cost too much money...sooner rather than later.

• Drill down on repair costs; Identify the sources of high parts costs, labor costs, or travel costs.

• Score mechanics/technicians by their productivity (hours/work order, no. of work orders, etc.).

• Improve response times to increase customer satisfaction and reduce “down time”.

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MERCHANDISING - Point of sale materials

As a bottler, you probably invest heavily in Point of Sale (POS) materials. As with any investment, savings can be achieved by careful management.

MAX keeps sales history together with history of placement types, requests, dates, quantities, sizes, locations, costs, competitor information, and

more. The result is a moving picture of net value contribution of merchandising investments.


• Maintain and grow your share of POS in the market.

• Identify customers who do (and don’t) deserve more POS investment by correlating POS spending with overall revenue and margin.

Compare POS with Competitors. Do we have the “market share”?

Total number of pieces.

Our share of the total.

POS by Customer Site. Compare Quantity Vs Cost Vs Overall Margin.

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MAKING “THE BEST CASE” FOR RETAILERS

Price - to - consumer information is frequently available through internal surveys or third - party or syndicated data providers. MAX matches these

up with bottler invoice data to provide a view of retailer profitability or “the best case”.


• See products flows and competitive shares.

• Win the contest for feature ads, space, and attention.

• De - list losers before your customer does.

Compare Retail Quantities, Prices, Revenue, Costs, and Margin by Product.

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Compare A/R Balances by Sales Representative. Are outstanding balances proportional to revenue and margin?

How many days past due are this sales rep’s accounts?

List the worst overdue invoices along with contact information necessary for immediate action.

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List the worst overdue invoices along with contact information necessary for immediate action.


COLLECTIONS

Not only does MAX provide the information and tools to make more money, but it can also enable bottlers to collect the money that’s due to them

when it’s due. MAX seamlessly integrates A/R information and sales information to show A/R balances, invoice amounts, paid amount, oustanding

balance versus revenue or margin, contact information, etc., by any perspective (customer, sales representative, region, channel, etc.).


• Compare A/R balances to revenue, margin, or any other sales measure.

• Make others (sales representatives, district managers, etc.) aware of and responsible for past due accounts.

• Quickly identify the riskiest accounts and provide all information required for immediate action.

• Elevate A/R to a Key Productivity Indicator status within the company, including it in executive targets, sales management performance evalu-

ations, etc.

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DELIVERY

MONITORING OPERATIONS EFFICIENCY

Delivery efficiency means getting the most from drivers, finding the right delivery frequency for all customers, and keeping personnel and trucks

at a minimum to decrease costs. MAX uses data from load sheets, handhelds, and invoices (route settlement) to track average volume, revenue,

and margin per drop and more.


• Continuously certify operational productivity.

• Enable managers to perform day-to-day, day of week, trend and outlier analysis or drop size efficiency.

• Optimize delivery operations for maximum productivity of human and capital resources.

• Certify / reward managers for productivity performance.

• Coordinate merchandising with delivery schedules.

• Adjust drop size to minimize feature ad pre-loading.

• Correlate missed stops with sales trends. Reduce missed sales opportunities.

Test, then list, by Sales Route, those customers with low MC per drop (less than $20).

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SUPPLY CHAIN


Bottlers keep data about production schedules, orders placed, and inventory levels. MAX integrates all of these into a comprehensive view of the

supply chain, tracking ordered quantities, days of supply, projected inventory, actual inventory, received quantities, etc., for every single product.

So, you can see exactly how much of every item is currently in-stock, and will be in the warehouse tomorrow, next week, or next month.


• See the product pipeline daily.

• Measure the effects of promotions on inventory.

• Optimize for JIT on both purchasing and distribution.

• Show the effect of “push” stocking on carrying costs.

• Spot stock shortages before promotions start.

Stocking Trends. How may days of supply do I have? When should I order more?

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LOADING


Every load shift manager needs to match up manpower requirements with orders from the trade, and to load vehicles as efficiently as possible,

while maximizing the safety of his load crew. MAX uses data from load sheets, payroll, HR files, and other sources to track head counts, load out,

load in (returns), total delivered, labor hours, safety incidents, etc., so that load managers can make their crews more productive.


• Score / reward load management efficiency.

• Match up vehicle loads and load times to vehicle capacity.

• Reduce re-loads and mis-loads / load crew labor costs / net cost per loaded case.

Compare Loading Efficiency by Warehouse.

Compare Load Out to Load In (Returns) by Vehicle, Route, Warehouse, etc.

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VEHICLE TRACKING


Repair and maintenance records, capital asset files, and fuel cards provide rich information on the efficiency of vehicles. MAX can track the entire

cost of fleet operations such as depreciation, service costs, and maintenance... even fuel mileage, to show where and how bottlers can reduce

those costs.


• Monitor mileage per driver and truck.

• Eliminate high-cost vehicles...sooner rather than later.

List, then sort vehicles by % change in fuel efficiency.Which delivery vehicles show unreasonable changes in miles/gallon? In a fleet of more than 600 vehicles, some show up with numbers that require explanation.

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FULL SERVICE / FULL LINE VENDING

Full Service / Full Line Vending introduces introduces new business processes and even greater complexity to bottler operations. From accounting

files, delivery invoices, and repair and maintenance records, MAX can track cash receipts, commissions, number of visits, collection and repair

information, and Volume, Revenue, and Margin for additional product lines.


• Analyze any product or product category by volume or profitability.

• Obtain the facts to effectively negotiate customer commissions.

• Improve delivery efficiency to reduce costs.

• Identify potential problems with over / short... sooner rather than later.

Compare Quantity, Revenue, and Margin by Product Category, Down to the Asset Level by Day, Week, Month, etc.

Compare Revenue to Commissions for Any Asset or Customer.

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FULL SERVICE / FULL LINE VENDING

Identify Customers with Low Revenue Per Visit. Can we service those customers less often?

Test customers based on any criteria, for example, Revenue Per Visit less than $40. MAX gives results in just seconds.

No product is more than 50% depleted.Solution: Cut down on the number of visits to increase Revenue per Visit.

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GETTING TO “DEAD NET”

MARGIN MINDER® MAX BRINGS IT ALL TOGETHER

True net value is the net result of all revenues and costs. Perhaps the greatest value of MARGIN MINDER® MAX is its ability to bring all of these

together in a comprehensive accounting of true net value contribution every day, for the individual customer up to the enterprise. Now, everyone

who needs to know can see instantly where and how activity affects profit and growth.

Full Service / Full Line

CUSTOMER

Sales

Field Marketing

Distribution Operations

Asset Repair & Maintenance

DEAD NET

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THE DYNAMIC P&L

The Dynamic P&L of true net value delivers volume, revenue, costs, profit, and productivity... from the customer, product, or asset up to the

enterprise. It is updated and available every single day.

Entire company...


The P&L compares any two time periods as well as actual vs. budget values for any business activity.

The result is true net value from any perspective.

MAX can even integrate transactional data with incident counts (e.g. invoice counts) and causal data (e.g. popula-tion) to calculate key productivity mea-sures, such as per cap, per employee, per hour, etc.

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customer...

product.

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MARGIN MINDER® MAX CAPABILITY SUMMARY

The MAX Productivity Tracking System...

• Bolts-on to any data processing system.• Scales to many billions of data points, thousands of users.• Integrates and organizes transactional and causal data from many business functions into a coherent, whole enterprise productivity tracking system.• Provides a rich suite of tools for activity data interrogation, visualization and analysis.• Provides objective monitoring of value contribution at all points, for all persons, functions and processes.• Supplies information in time to affect outcomes.• Delivers anywhere, anytime.

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TESTIMONIALS

Nine of the top ten soft drink bottlers in North and South America utilize Salient products and services. See what some of our clients are saying:

“On the second working day of the month, we know exactly how our (previous) month was as far as margin was concerned. Volume used to be king. It’s not anymore. It’s profitability and mar-gin. That’s really what counts. Margin Minder is a great product. It’s quick. It’s easy. It’s just virtually maintenance free. Would I recommend it to others? In a heartbeat.”

Dan Welsh, Controller

Pastega Beverage. (Pepsi Bottler) Corvallis, Oregon

“I will say that we believe our margins, particularly in the cold bottle channel, have grown over a dollar a case since we implemented Margin Minder, and at least some of that has to be attrib-utable to the fact that we’re getting immediate results-oriented feedback on our pricing deci-sions.”Brad Braun, Chief Financial Officer

PepsiAmericas. Memphis, Tennessee

“Margin Minder makes every one of our managers smile a lot more, not necessarily because their sales are up, but because they know why they are or are not and can do something to change things based on useable, immediate data.”Andrea Lutes, System Administrator

Weinstein Beverage Company. (Pepsi and Cadbury Bottler) Wenatchee, Washington

“We have to be able to get new products to market in a hurry, and then just as quickly we have to be able to determine if the product is going to be successful. We have to identify its strongest niches and be able to specifically market it to those areas. The Margin Minder system is a great tool for interactive scorekeeping, and it keeps us from making expensive mistakes.”Allen Savasta, Director of IS,

Oasis Foods Company. Hillside, NJ

“It’s revolutionary! The real value added is how it interfaces with our data warehouse. We could always use a spreadsheet to distribute and analyze the data from our warehouse, but it was very cumbersome. Salient made the whole process invisible. It’s a real client-server system with on-line, real-time information.”Matt Soileau,VP of Operations

Silver Eagle Distributing Co. (Anheuser-Busch Distributor) Houston,TX

Salient Corporation203 Colonial DriveHorseheads, NY 14845 USA

phone: 607 739 4511 fax: 607 739 4045salient.com

©2008 Salient Corporation

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