About Sales Volume Planning

Sales volume planning (SVP) is an iterative process in which consumer goods manufacturers model the projected sales for an upcoming period. Companies capture and update salesperson-influenced data pertaining to the quantity or value of product that their customers will purchase during a period of time. Uses of SVP include the following tasks:

• Top-down volume planning of target sales, usually starting with a high level number from a financial planning system.

• Bottom-up total sales forecast planning, usually with sales of the previous year as the starting point.

• Baseline volume estimating, usually starting with a derived baseline from Demantra or a Demand Planning system such as APO, I2, or Manugistics.

Note: This chapter uses the term quantity to represent any amount in SVP. You can also use a monetary amount, such as currency. However, you cannot use quantity and monetary amounts at the same time in SVP.

As part of their annual forecasting process, companies use SVP based on the data sets. These data sets make the SVP process possible and provide feedback, in the form of baseline and target quantities, for current and future sales volume plans. You can develop this data internally, or a third party can supply this data.

Note: It is recommended that companies perform complex trending and data modification on the initial load of historical records, such as shipment history, before importing this data into Siebel base tables.

See the following table for definitions of the data sets.

Data Set	Definition
Baseline	This data set is the quantity of product that would have been shipped, sold, or consumed without an account promotion for a period of time. The Baseline view also shows incremental quantity, the quantity of product that is shipped, sold, or consumed as a direct result of an account promotion for a period of time. For example, because a product is on sale, a customer purchases two incremental pallets of the product in addition to the one the customer regularly purchases. Incremental quantity is generated during account promotion planning. For more information about account promotions, see Trade Promotions
Incremental	This data set is the quantity of product that is sold over and above the baseline quantity and that is attributed to an account promotion.
Target (Also referred to as quota or objective)	This data set is the quantity of product that a manufacturer expects to sell in a period of time. Targets can incorporate growth or decline rates for the SVP period.
Shipment	This data set is the quantity of product that is shipped to customers during a period of time. Because shipments are always historical data, end users can view, but not modify, the shipment data.
Consumption	Also called Consumption Volume. This data set is the quantity of product that customers purchase and use during a period of time. Because consumption is always historical data, end users can view, but not modify, the consumption data.

See the following table for possible sources of these data sets.

Data Set	Possible Sources
Baseline	Obtain from shipments to accounts information. Obtain from customer warehouse withdrawals that a customer provides to the manufacturer or that a third-party data source provides. Derive from consumption data.
Incremental	Derive by calculating the difference between customer warehouse withdrawals, or shipments, and baseline. Obtain from a third-party data source. Incorporate lift matrices or use an educated estimate.
Target (Also referred to as quota or objective)	Derive from shipment, baseline, or consumption data from a prior period. Modify data based on a factor such as a growth or decline rate expected for the upcoming period.
Shipment	Import from an order processing system or a customer data warehouse.
Consumption	Obtain from a third-party data source. Use customer warehouse withdrawals as a proxy to derive.