Company
Salomon is the world leader in winter sports and is well-established in outdoor sports through footwear and technical apparel. Salomon is known for highly innovative and performance-oriented products. Salomon's sports include alpine and cross-country skiing, snowboarding, and major outdoor sports like climbing, hiking, adventure racing and trail running.
Since October 2005 Salomon has been part of Amer Sports, the world's No. 1 Sports Equipment company with major brands such as Wilson, Atomic, Suunto, Precor and Mavic.
Business Challenges
Salomon selected BOARD to achieve the following objectives:
- Integrated controlling and planning environment
- Having coherent figures inside the Group and increase planning processes accuracy
- User profiling by responsibility at any level (subsidiary and HQ users)
- Avoid useless data entry repetition at HQ or subsidiary
- Flexible architecture and application (extension to other business needs)
- User-friendly interface
- Suitable for any further internal development (programming-free)
Distributed budgeting application serving and consolidating 17 countries.
BOARD Solution
The solution based on BOARD:
- Gathers and provides easy access (reports or requests) to all the necessary data for the management and the forecast of a budget entity (activities, subsidiaries, functional services) including: logistics, commercial and financial information
- Provides flexibility in terms of use with summing functions, comparisons of periods and working phases
- Includes specific sub-modules to allow:
- Forecast by entities by Product Lines: providing tools for the activities to build forecasts by product line and by legal entities (problem of splitting the forecast by product line between Salomon SA and the subsidiaries, creation of inventories, intercompany eliminations)
- Simulations capacities for different working phases : on line calculation of transfer prices, exchange of data with the subsidiaries, calculation using different exchange rates …
- Consolidation of data and analysis of the output : meet the needs of the
- Management reporting and of Adidas reporting (link with SSC)
Salomon, in the selection process, focused on the following points:
- Versatility : user friendly, response time, on-line information
- Management of multiple users doing data entry, data inquiries, data control, data simulation …
- Consistency of the information managed and provided by the controlling system (direct links to the Salomon data base and/or interfaces with the different Salomon operation systems)
- Management of new requests generated by changes in computation rules, group formats or subsidiary specific requirements
- Integration of simulations capabilities
- Integration of comparisons capabilities between different working phases (Budget, Reporting, Actual, SBP, …) for which the information is managed at different detail level
The system is structured in three main areas/modules:
1. Strategic Business Plan (SBP)
This planning process is performed by Activity/HQ and Reporting Entities: it’s main aim is to arrive at a final set of measures and indicators after comparison and analysis between the plans supplied by the two above named.
The system is made of the following sub-modules:
- Data Entry for Activity/HQ:
- sales quantities and values by zone, Product Line and concept
- margin, inventories, capex by concept
- activity expenses and headcounts by cost centre
- Data Entry for Reporting Entities:
- sales quantities, values and margins by category
- expenses, headcounts and capex by year and subsidiary in local currency
- Consolidation:
- by activity and type of data
- by subsidiary and Product Line
- Gap analysis and adjustment by data entry
- Final consolidation by activity/subsidiary and type of data
The Data Entry supports:
- Comparison with previous SBP, actual data
- On-line simulation for % variation on sales, prices, cost
- Native splitting to lowest level of detail for figures entered at aggregated level
- Consolidation rules defined on user needs
The Strategic Business Plan is stored and, when officially closed and frozen, protected by accidental updates except for given users, if any.
2. Business Processes (BP)
This process is mainly in charge of subsidiaries and/or activities while the HQ overlooks the computation rules applied for landed costs and transfer prices for intercompany sales and purchase. The system helps managing Price Range creation by model and to update landed costs coming from a sub-module called Transfer Price Module managing costs, duties and freight assumptions.
The following functions are available for BP users:
- Data entry updates for:
- quantities by model and concept
- ASP and discounts in local currency
- Margin calculation on landed costs
- Conversion from local currencies to Euro
- Data consolidation by Product Line, model and concept
3. Budget & Forecast Processes
The Budgeting and Forecasting processes are almost identical and both integrate the three sub-modules described below:
3.1 Subsidiaries planning
Each subsidiary analyzes and calculates average selling prices in local currency by sales type depending on orders and invoices, in order to link them to the commercial forecast extracted from the Manugistics system and other internal sources managing weekly sold quantities and supply by model and sales type.
These figures are then used in order to produce three main outputs:
- Commercial Budget/Forecast:
- q.ty, sales, margin by model and sales type
- data in local currency
- total by season
- Financial Budget/Forecast:
- q.ty, sales, margin by sales type
- Operating expenses by group accounts/cost centres
- Financial and extraordinary expenses
- Fiscal year – monthly split
- Data in local currency
- Other elements
- Headcounts, capex (quarterly)
- A/R (monthly)
3.2 Activities planning
Commercial and Financial budget/forecast figures by subsidiary are then converted to Euros and consolidated by sales type, month and/or season. These plans are integrated in Salomon SA’s Corporate Financial Forecast, with a focus on Sales and Cost of Goods by Product Line.
Data coming from production sites is used to apply transfer prices and standard costs.
Variances, inventories and expenses are also included.
The main outputs for this sub-module are:
- Consolidated Contribution by Product Line
- Quantities, sales and margin by entity
- Expenses by activity, cost center and account groups
3.3 HQ Planning
The final group consolidation is based on:
- Consolidated Contribution by Product Line (see above)
- Salomon SA Budget/Fcst
- Inventories Budget/Fcst by subsidiary and Product Line
- Expenses Budget/Fcst by department account groups, cost centre
Aggregations and calculations provide the final output as Budget/Forecast Brand P&L: split by quarter, highlighting different results depending on budget and forecast, exchange rates applied, linking other indicators/rules used during the consolidation process.