Channel Visibility enables manufacturers to acquire accurate channel
data to support their business programs. The basic sales-out, sales-through,
inventory and customer data can be consolidated and organized for
various channel programs. Depending on the sophistication and maturity
of the channels, different programs are used to support the channel
Channel Visibility delivers the data to for manufacturers to conduct
the following business processes:
Channel Inventory Management
Traditionally companies have focused on improving the backend
of the supply chain which includes procurement and logistics. However,
increasingly companies are beginning to realize the importance of
acquiring an accurate picture of demand in order to better align
supply with demand. This is because any inaccurate indication of
the market demand can lead to the "bullwhip effect".
Accurate channel inventory is one of the key performance indicators
required for demand planning. Good management of channel inventory
will minimize stock-out situations which will likely lead to brand
switching and loss of revenue. Marketing plans can also be executed
to clear excess inventory and minimize costly stock write-offs.
With timely and accurate channel inventory tracking, companies are
able to implement best practices such as collaborative forecasting
and inventory replenishment programs.
Channel Sales Management
Managing indirect sales is often challenged by the lack
of end customer sales information. Most often, channel managers
have no quantitative clue as to why sales is good or bad. One of
the key hurdles is the reluctance of channel partners giving data
to the brand owners. Key information such as who are the customers,
purchasing patterns and product sales performance are useful to
both the brand owner and their partners. The critical success factor
is to be able to effectively demonstrate value to the channel partners
with the information collected. Reviews with channel partners can
be focused and quantitatively based. With Channel Visibility, brand
owners are able to track and measure KPIs on a weekly basis.
Price Protection Control
The challenge in most price protection program is the accuracy
of the channel inventory reporting. Channel partners may take advantage
of the situation to maximize the returns and claims. In order to
prevent such incidents, a consistent and periodic reporting of inventory,
sell-in and sell-out can be used to track the reported and calculated
inventory. Other anomalies that arise from this would be parallel
imports, illegal drop ships as well as grey market sale.
With the exception of certain companies, most have complex
pricing and discounts to cater to different types of partners. Adhoc
and one time discounts are also commonly used in field sales. With
proper tracking of special discount request, tracking of serial
numbers, companies can prevent deals that are disguised as large
deals, thereby loosing potential revenue.
Quality of Reported Revenue
The quality of revenue reporting is an area which enterprises
are increasingly focusing on. This is due in part to the Sarbanes-Oxley
act which requires increased accountability in financial reporting.
Within an enterprise, business process and systems help to ensure
that everything is auditable. However, an enterprise that conducts
business through channels will immediately encounter the challenge
in collecting and tracking channel information such as revenue recognized
at sales-out and inventory for accurate financial reporting. This
is not to mention the very common practice of channel stuffing that
further obscures the true figures. In order to obtain quality revenue
numbers and forecasts from channel partners, it is necessary to
obtain accurate sales-out reporting and proactively minimize stock
returns. The above requirements point to the need to put in place
a proper process to collect, consolidate and validate channel data
for timely and accurate reporting. In addition, the system should
also enable such information to be auditable and properly administered
for greater accountability.
Channel Marketing and Incentives
Manufacturers depend on their sales and distribution network
for market reach and revenue generation. However, the indirect sales
route is fraught with complexities because each partner entity has
it’s own business practices, processes and is driven by different
motives. As a result, channel programs are of vital importance to
support, motivate partners so as to align them with corporate objectives.
Channel marketing campaigns are designed to assist partners to
sell more effectively and to align partners with the brand owners.
Once campaigns are executed, if they are not monitored against actual
sales, their effectiveness and ROI cannot be measured. If regular
sales information can be consolidated and measured against the campaign
targets, remedy actions can be planned and marketing investments
reallocated to maximize returns.
Review and Incentive Management Partner
Exchange Network Channel