This e-book is a guideline for international FMCG companies. And it is about your distributors; 3rd parties you engage to sell your products; external partners repre- senting you and your brands in countries where you don’t have your own set-up.

1. Copyright © 2017 Internel SA
How to succeed
with S&OP
IN EMERGING
MARKETS

2. CONTENTS
About this e-book – what is it all about? . . . . . 2
What is S&OP and can it be applied to distributor markets? . 3
Real integration of distributors to your business . . . . 5
How to succeed with S&OP in emerging markets . . . . 6
1. Respect your distributors – accept co-dependency . . . 7
2. Invest in your distributors – share your knowledge . . . 8
3. Work with easy numbers – a true one-number-principle . . 9
4. Give and expect feedback proactively . . . . . 10
5. Keeping focus in distributor markets – less is more . . . 11
About us . . . . . . . . . . . 12
Copyright © 2017 Internel SA 1

3. Copyright © 2017 Internel SA 2
ABOUT THIS E-BOOK
What is it all about?
Dear reader
Let me start, by telling you that this e-book is not about introducing to you the technique
of Sales & Operations Planning (S&OP) and outlining its many benefits for your
organisation, because...
There is plenty of literature about this proven supply chain strategy and most FMCG
organisations already run a well-established S&OP process. Who manages S&OP
successfully is constantly working on reducing stocks, increasing service levels and
delivery output; and consequently, sells more.
Even more, best-in-class leaders are already moving towards the next level of excellence,
to advanced S&OP or Integrated Business Planning. But could it be that something was
forgotten along the way?
This e-book is a guideline for international FMCG companies. And it is about your
distributors; 3rd parties you engage to sell your products; external partners repre-
senting you and your brands in countries where you don’t have your own set-up.
Distributor and emerging countries account for 20-30% of world-wide FMCG sales. This
share is constantly growing – whereas the turnover in developed and often saturated
consumer markets in Europe, North America and economies in the Far East is stagnating.
Despite the increasing importance of such emerging markets, distributing partners are
rarely or not at all included in professional S&OP. Instead, they are dealt with through
Excel spreadsheets and occasional stock and order enquiries.
Because they are too complicated, too unpredictable and a huge challenge to
production sites due to their highly fluctuating demand. A major root cause for inventory
write-offs, expensive rush orders and other chaos along the way. Anything that can be
done about it?
This e-book will provide you with answers and help you to successfully integrate
distributor markets into your S&OP. Happy reading!
On behalf of the Internel Group
Rolando Casanova

4. WHAT IS S&OP?
S&OP is a senior management decision-making process that ensures that
the tactical plans in all business functions are aligned and support the
business plan.
What was stated above by one of the gurus of S&OP, Oliver Wight, can also
be summarised like:
Can it be applied to distributor markets?
Copyright © 2017 Internel SA 3
S&OP is about getting all company departments heading to the same direction;
defining together for different layers – customer, product, country, region – the
demand, the inventory policy, the manufacturing capacity and finally working out
the right sales numbers for each consumer market.
Instead of working with different systems and sometimes even competing targets
amongst departments – with proper S&OP, all teams align around a true one-number
sales target in value and currency. And all that for the real purpose of each
organisation: increase sales and profits, reduce operational costs.
S&OP is a well-established, proven framework and many organisations can leverage
their benefits – primarily with a thorough and consequent execution of FIVE DISTINCT
S&OP MEETINGS:
Product
review
Opportunities
and threats
 Product launches
per market
 Product
discontinuations
per market
Sales
review
Planning of
unconstrained
sales demand
 Measuring sales
forecast vs.
actuals
 Define activities
to close gaps/
reach budgets
Supply
review
Response to
unconstrained
sales demand
 Measuring
production
output/supply
performance
 Define activities
to close gaps/
reach budgets
Integration/
reconciliation review
Tackle differences
between supply and
sales demand
 Identify differences/
opportunities and
threats
 Prepare for executive
S&OP meeting
Executive
S&OP meeting
Review/approve
sales,supply and
financial plans
 Tackle unresolved
issues like
capacity
constraints
 Ensure right
strategic
business targets

5. WHAT IS S&OP?
The result is a robust one-number sales and operations plan in units and value, built up
through collaboration between the functions, driving strategic and operational
alignment and co-ordinated action.
The meeting cycle is monthly. Each meeting has different participants, inputs and
outputs and the planning horizon is typically in the intermediate range of 12 to 24
months.
Some readers will recognise that their company does all this already, eventually slightly
different. And some may ask themselves, if their organisation is really doing it that
simple and if the management stands behind it. Because the most common reason
why S&OP sometimes fails to deliver, is an over-complicated S&OP process and lack of
management attention.
At Internel we have seen both, successful and unsuccessful S&OP. This e-book focuses
on the successful ones leading to great distribution partnerships and to more sales.
Rolling-out S&OP to distributor markets is of great advantage to any FMCG
organisation and the next pages show you. However, a different approach is needed, as
you enter another world than your own with affiliate or representative offices.
Can it be applied to distributor markets?
Copyright © 2017 Internel SA 4

6. REAL INTEGRATION
of distributors to your business
When working successfully with S&OP, FMCG companies are often afraid that their
distributors may work with a competitor or get too many insights into their set-up – and
consequently exclude them from joint planning and data sharing.
WHAT’S WRONG?
Instead, sales forecasts, budgets, price changes; all are exchanged with distributors by
e-mail and in a great variety of Excel spreadsheets. Numbers are often interpreted
differently: Are the sales numbers discussed local targets or supplier purchases? Are local
stock levels considered when establishing budget numbers – and why would this be
important? Who updates Excel spreadsheets and checks that the formulas are still
correct? Finally, what does the supplier, thus you, do with all these numbers?
REAL INTEGRATION
of distributors to your business
TURNING SUPPLIER-DISTRIBUTOR RELATIONS
INTO TRUE S&OP PARTNERSHIPS
When distributors are integrated into real S&OP partnerships, positive profit and loss
results are usually visible already within 6-9 months. And this is how it is achieved:
Instead of rare meetings, phone calls and plenty of e-mails, there is a regular S&OP telephone
conference taking place, with a small but competent and devoted supplier-distributor
audience. A short time investment answers all the questions raised before, eliminates
unnecessary e-mails, rush orders while generating full sales and supply visibility.
A monthly or bi-monthly S&OP call of maximum 30 min is taking place between the FMCG
manufacturer/supplier and its distributors. The preparation is done by the supplier’s S&OP team:
HOW IT WORKS – THE SUPPLIER-DISTRIBUTOR S&OP CALL
Collection
of local sales
and stock data
Creation of full
local demand plan
(sales/supplies)
Analysis
of local situation
per product/SKU
Update of local
demand plan
(sales/supplies)
S&OP call
invitation, demand
plan distribution
Copyright © 2017 Internel SA 5

7. REAL INTEGRATING
of distributors to your business
REAL INTEGRATING
of distributors to your business
What looks easy, needs discipline to keep up with regular, monthly, bimonthly or quarterly
calls (depending on the importance of the market) and a true mind-set change of all
involved, including your management.
To get this far and further, a few basic things need to be done before as seen on the next
pages.
Call participants: FMCG supplier/manufacturer Business Unit Head or Country Manager,
regional sales, marketing and customer service with Distributor sales and logistics executives.
HOW IT WORKS – THE SUPPLIER-DISTRIBUTOR S&OP CALL
Discussion of local
sales results, challenges
and opportunities
Discussion of local
demand plan (sales/supplies)
and local stock levels
Agreement and buy-in
of participants on final
demand plan
Submission of demand
plan to supplier for
S&OP sales review
Copyright © 2017 Internel SA 6

8. HOW TO SUCCEED WITH S&OP
in emerging markets
Before getting started with efficient distributor S&OP and transforming your supply
chain into a value chain that sells more, you will need to get your organisation’s
mind-set right:
Good distributors are rare, often head haunted and should be treated as you
treat your internal sales force. In a true S&OP partnership, distributors will be
happy to get your input from other markets, best-in-class sales campaigns and
finally, they need to know the truth about your supply capabilities, to avoid
selling products for which you may face production challenges.
You decided to work with distributors that penetrate consumer markets on your
behalf. Even if they are 3rd parties, these are “your” local sales organisations, which
need respect, trust, motivation, sometimes guidance.
If your distributors are good, you are dependent on them. Undoubtedly, there are not
many free companies left out there to get a great sales job done for you. And your
distributor is dependent on you, because you have a great product offering and a
serious approach to conquering emerging markets. If you agree with this statement,
you’re almost ready to start.
However, if you believe distributors should be grateful and honoured that you allow
them to sell your products, then you either have a unique product (congratulations!) or
you don’t mind to see them selling products of your competitors – which usually
happens when distributors get frustrated with their suppliers.
1. RESPECT YOUR DISTRIBUTORS –
ACCEPT CO-DEPENDENCY
Copyright © 2017 Internel SA 7

9. HOW TO SUCCEED WITH S&OP
in emerging markets
A real supplier-distributor partnership means, that you will also need to fuel
back something when you ask for their input. The short time you invest in a
monthly S&OP call, motivates all stakeholders, allows you to understand your
distributors and their local challenges better; such as it helps them to
understands yours. Likewise, both partners can discuss and generate more
Instead of missing sales targets, wouldn’t you rather know what’s up locally, how your
products are sold, your brands marketed and what your competition is doing?
As much as distributors will give you answers on the above, they need your help to
focus on your strategic products, extended product knowledge and very often
marketing support.
Conquering sales territories with distributors is surely more than just offering your
products at a great price and reminding them constantly to reach the budget.
2. INVEST IN YOUR DISTRIBUTORS –
SHARE YOUR KNOWLEDGE
Copyright © 2017 Internel SA 8

10. HOW TO SUCCEED WITH S&OP
in emerging markets
Agreeing on both, local sales and purchase numbers from you, adds clarity to
what you can really expect. Best-in-class distributor S&OP keeps all involved
focused on what is important: a common sales plan and agreed measures by all
involved how to make it happen.
Be specific right from the start which budget numbers you agree. For the sake of
eliminating complexity and “Excel spreadsheet budgets” like 69’453 units, you may as
well agree on 70’000 units. Easy to understand, easy to focus on and your CFO surely
won’t mind.
If you agree on a sales target, i.e. units to be purchased from you, the basis should be
a realistic local sales plan per product considering inventory levels. A one-sided
supplier view leads to year-end races to fix sales gaps or, the opposite, a slow-down to
avoid exceeding targets as to gain advantages for the negotiation of the next budget.
Or do you really believe that just adding 15% to your distributor’s budget every year will
lead to a sustainable growth in the region?
3. WORK WITH EASY NUMBERS –
A TRUE ONE-NUMBER-PRINCIPLE
Copyright © 2017 Internel SA 9

11. HOW TO SUCCEED WITH S&OP
in emerging markets
Proactive feedback during the S&OP call results in more transparency,
improves the partnership and leads to more sales; and sometimes it helps not
to lose them, too.
Emerging market data is often collected, because internal policies foresee such
intelligence gathering. Time has come to talk about what data you really need from
your distributors and how relevant they are to help them sell more.
Finally, it will be nice to advise distributors what is exactly done with the data
submitted to you, thus give proactive feedback:
For example, with a calculation how to reduce local inventories and costs – so cash is
freed for more sales activities and consequently purchases from you. Or by
incorporating the collected data in a sales campaign proposal that worked well in
another country. Or simply by sharing a revenue plan, which helps your distributor to
plan liquidity and avoids a credit limit stop-and-go.
You also may wish to know proactively if your partner sells less due to competitive
activity. Such as your distributor may want to know about delivery delays before he’s
gone stock out.
4. GIVE AND EXPECT FEEDBACK
PROACTIVELY
Copyright © 2017 Internel SA 10

12. HOW TO SUCCEED WITH S&OP
in emerging markets
The monthly S&OP call defines a flexible product range, stock levels and steady
sales; agreed by all parties. This will replace shrinking profit margins due to
product destruction at manufacturing sites or in distributor warehouses.
It is understood, that you wish to offer your entire product range in a country with
great sales potential. And your distributor wants it all as to make a great impression to
his local customers.
Well, another way may be to start with a range of strategically important products, i.e.
streetfighters to prepare the ground for your more sophisticated and expensive
products to come along once the partnership works well. Less can be more sometimes.
Also, distributors sometimes are difficult to reach: long lead times, customs
formalities and plenty of other hurdles on the way for your supplies. Consequently, for
both, supplier and distributor, it is better to store more products locally, right?
Instead of suffering of great demand fluctuations, unexpected large orders with high
inventory holding costs for all involved, would it not be better to reduce local stocks
instead, creating a steady product flow with regular orders? Production lead and
shipping times do not have an influence on stock levels if jointly planned – similarly, less
can be more sometimes.
5. KEEPING FOCUS IN DISTRIBUTOR MARKETS –
LESS IS MORE
Copyright © 2017 Internel SA 11

13. ABOUT US
Rolando Casanova has been working with suppliers and distributors
for over 20 years. He has accompanied many successful S&OP
partnerships, with prospering suppliers and happy local distributors.
He brings along extended knowledge of how to get effective,
best-in-class distributor S&OP done right from the start.
Whilst working many years within distributor markets, Rolando
learned that the most successful and powerful supplier-distributor
relations are those with a sound balance between relation and
common sales focus. Distributors earn by adding a margin onto your
products and by selling them – which pays your salaries. This needs
respect, trust, motivation and the right guidance by global operating
FMCG and CPG companies. Because trusted, respected and
integrated distributors simply sell more.
At Internel we deliver well-developed and efficient distributor S&OP solutions.
We have been rolling out professional S&OP for large and medium sized
manufacturers of FMCG and CPG, with complex supply chains and in volatile
business environments in Europe, Middle East, Africa and Asia.
Over the last two decades, we have worked with 200+ organisations across multiple
industries to turn their supply chains into a competitive advantage and have helped
our clients and their distributors to increase their sales performance in emerging
markets. And we have replaced disparate planning activities and thousands of Excel
spreadsheets through mutual beneficial supplier-distributor partnerships.
We offer consulting, professional distributor S&OP services, our innovative
distributor S&OP system Daisy and in-depth training and education. We are happy to
roll out powerful distributor S&OP for you, as implementation project base or
permanently.
Copyright © 2017 Internel SA 12

14. Feel free to pass this e-book along to any of your colleagues who might be interested
in these ideas or who struggle with S&OP in distributor or emerging markets.
Start a discussion at your company about how distributor S&OP would benefit
everyone within your organisation and its emerging market operations.
CONTACT US TODAY
to see what we can do for your business in world-wide emerging distributor markets:
Internel SA, Ankerstrasse 38, 8004 Zurich, Switzerland
+41 44 586 90 40
www.internel.eu
FIND US ON:
THROUGH THE LINKS ON THIS PAGE, YOU CAN
ACCESS FURTHER RESOURCES ON S&OP, SUCH AS:
 Informative downloads  Compelling blog posts
WHAT`S NEXT?