Channel Sales, Channel Inventory Management

Be Aware of the FAKE Channel Inventory Management Implementation

In China, some consultants keep telling me how they implement the SAP CRM Channel Inventory Management solution (Channel Sales for High Tech industry). Unfortunately I found that most of such implementation and solutions they provided are FAKE. Why?

Usually they know something about Price buckets. Then they create the price buckets manually with SAP GUI. Or using some batch input methods to load the data directly into the price bucket tables when sell-in, sell-out happens. They did not use EDI, IDoc, which means that they did not use IDoc to generate Channel Inventory/Claims transmission which can be released and update the channel inventory subsequently.

CY Consulting's Channel Inventory Management Solution Capabilities

We are skilled in IDoc creation and processing. Use the IDoc for Sell out, sell through, inventory reconciliation, ship and debit claims, the system will trigger the related function modules. Then transmission of specific type are created with the data transmitted. If the data meet the validation rules, it can be released and the follow-up transactions such as inventory update, reconciliation, claims can be done automatically. Price buckets will be created or updated automatically as well. We have experts in enhancement and development to the channel inventory management.

Channel Inventory Management: Solution at a Glance

<Live Demo in a reference customer: Channel Management-Channel Inventory Solution Process Overview>

Sell In Management (Sales to Channel Partner)

The Channel Management (Sales) processes start with sell-in to channel partners, which is the based for all the subsequent processes. The channel inventory of the channel partner is built with this process, which will later be consumed when sell-out or Point of Sale (POS) is reported by the channel partners. Inventory of the partner consists of all the Price Buckets(when, what products, how many, what price)

Resales Management (Sell Out, Sell Through)

Sell Out/Through: The channel partner resales the products to the end customer or other partners. If channel partner A resales the products to the end customer. The inventory of this channel partner A would be reduced/consumed. If the channel partner A resales the products to the sub-tier channel partners B, inventory of A is reduced while inventory of B is increased.

Channel Inventory Reconciliation

The Sell-In builds the inventory/Price Bucket, while the Sell-Out/Through consumes the Inventory/Price Buckets. Inventory Reconciliation is done periodically to make sure that the inventory of the channel partner is correct, which is the base for price protection and later processing.

Price Protection

The brand-owner uses the Price Protection process to protects distributors/resellers when the prices of materials already sold to them are dropped. It helps smooth demand during periods when prices are dropping more frequently, improving cash flow to the manufacturer/supplier. It also helps reduce complaints from customers who are unhappy when they find out that the price of the item they just bought dropped.

IDoc Processing in SAP CRM Channel Management

IDoc processing is critical and the start point for Channel Inventory Solution. All the sellout/sell through/claims/inventory report would be done via IDoc as the data come in from the portal as a file or EDI systems. Later, the IDoc is posted to proper application so that different business scenario would be triggered like updating the Inventory.

Enhancements- Validation Rules, Inventory Consumption Rules

Usually there would be many enhancements and development in a Channel inventory management solution once the customers don't want to compromise too much. For example, the system uses rules to validate the data transmitted. In some cases, some fields should be validated against some business logic. A rule in fact is any freely definable key, which is assigned to a BADI (Business Add-In). The BADI contains a specific business logic like whether the product/business partner/numbers is valid or not. However the BADI for the rule of Channel Inventory Management is quite special because the system has a mechanism to execute and validate the defined rules.

   Partner Channel Management

Partner Registration

You may run a marketing campaign to recruit channel partners. The potential channel partners can register their information online. Partner master data is created in the system. A workflow item is sent to the channel manager so that he or she can approve and accept the partner registration request.

Partner Lifecycle Management

We can profile the business partners with marketing attributes and other data, including: who the partners are, how they conduct business, what,where, to whom they sell, which industries they focus on, and what capabilities they have.

Lead Distribution with Rules and Policies for Channel Partners

We can use rules and policies to automatically distribute the leads to channel partners for further processing.

Opportunity Management with Channel Partners

The channel manager (of the brand-owner) creates an business opportunity. The opportunity is dispatched with workflow to the local channel partner for follow-up and further processing. The channel managers/partners can analyze the opportunities of their own.

Business On Behalf

Enable the channel partner to conduct business (Place sales orders) on behalf of the end customers. In the standard Business to Business solution, the channel partners order the products online for themselves.

Collaborative Selling (Partner Channel Management)

In some cases, the channel partners do not have their own web shop. With the collaborative showroom (collaborative selling), the end customers can buy the products from the web shop jointly offered by a brand owner and his channel partners.


   SAP CRM General Functions

Last Updated@September 2008