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2019 | Book

Performance Management in Retail and the Consumer Goods Industry

Best Practices and Case Studies

Editors: Michael Buttkus, Ralf Eberenz

Publisher: Springer International Publishing


About this book

This book offers essential insights into various management concepts for retail and consumer packaged goods companies. Addressing a range of topics in the field of performance management, it presents concepts for management control, management reporting, planning & forecasting, as well as digitization-related aspects. The contributing authors share valuable lessons learned from real-world consulting projects and present innovative approaches to successful and effective management control at retail and consumer packaged goods companies.

Table of Contents


Controlling Versus Management Accounting: How German and Anglo-American Understanding Differs

Understanding the Benefits of German Controlling and Management Accounting
This chapter explains the difference in the use of the term “controlling” as it relates to the management accounting profession in Germany and the USA. The author explains the benefits of the German controlling profession and its practices for managerial decision making, identifies some areas where the US and global accounting profession could learn from German practices, and traces the evolution of the differences that has led to the difference in the use of term “controller.”
Larry White
Cost Accounting Systems in Germany and the USA: A Cross-National Comparison and Empirical Evidence
This chapter analyzes cross-national differences in the design of cost accounting systems between Germany and the USA—two countries that have a distinct cost accounting tradition. The comparison explores and summarizes several characteristics that make German cost accounting systems more detailed than US ones. It provides insights into national particularities and discusses mutual influences in the conceptual evolution of German and US cost accounting practices. Using empirical evidence from subsidiaries of anglophone multinational firms operating in Germany, the chapter identifies German cost center accounting as an interesting lever to improve the decision usefulness of US cost accounting.
Peter Kajüter, Moritz Schröder

Something New on the Agenda: Challenges and Trends Controllers Have to Cope with

Current Challenges for Consumer Goods and Retail Companies and Their Implications for Controlling
This contribution describes the impact of current market trends and social developments on the controlling of the consumer goods industry and retail companies. For this purpose, current trends and developments are exemplarily demonstrated and the implications for selected controlling aspects of the considered industries are derived. The findings are then discussed and an outlook on the upcoming necessary changes and optimization for controlling organizations is given.
Ralf Eberenz, Maximilian Schröer
Digitization of Corporate Performance Management: Revolution or Evolution?
This contribution describes the change in performance management caused by digitization and corresponding consequences in various matters. In the first chapters, a fundamental change in the paradigm of business steering is addressed and additional new tools for business steering are elaborated. As a necessary basis for digitization, the entire topic of big data is discussed to build proper understanding, especially for the limits of big data. Digitization will not only change tools or data, but will also change the culture and required profiles for the finance department which will be highlighted in the last chapter.
Sascha Brosig, Carsten Bork, Walid Mehanna, Stefan Tobias

How to Approach Performance Management: Best Practice Concepts

Approaches for Steering Multichannel Retail Companies
This contribution explains steering concepts for multichannel business models. In doing so, the scope and characteristics of single channels (stationary, print, and online) and the objective of a multichannel strategy are described first. Resulting challenges for management accounting are derived. The solution comprises the adaption of general steering dimensions with a focus on the customer perspective. Modern approaches for the steering of “customers” in a multichannel context are explained. Further typical performance indicators are highlighted to observe multichannel developments.
Philipp Graf von Arnim
Managing Retail and Wholesale Business by Performance Indicators
Illustrated by an Example of METRO
Performance indicators are essential tools for the effective management and the efficient steering of business in retail companies. The selection of the right set and the correct use of performance indicators can help to foster the success of a business and to reduce the effort of managing a company. To ensure the positive effect of management by performance indicators, the chosen set of figures has to reflect the individual business model and has to be aligned with the steering logic of the company.
This contribution provides an overview on how to develop and apply the right set of performance indicators in retail business, as illustrated by an example of the METRO. The focus of the example is on the effective management of the brick-and-mortar business on the operational level by use of performance indicators. In this regard, the given example describes how to guarantee the comparability of performance indicators by respecting store, sales lines, and country-specific characteristics and by laying the basis for benchmarking and profound business decisions.
Bernd Seufert
Enabling Data-Driven Management Information at the REWE Group Through a Value-Adding Integrated Management Data Warehouse
This contribution describes the implementation of a value-adding integrated management data warehouse at the REWE Group under the program named ConCERT. ConCERT is the abbreviation for controlling, common, efficient, ready, and transparent. The program heads toward setting new standards for a modern controlling with business-focused and future-proof technologies as well as streamlined processes and organization. Besides providing front ends for planning and reporting, the program aims on setting up an integrated information management architecture to achieve a single point of truth. In this contribution you find information regarding the general benefits and use cases, as well as a description of the designed architecture for a single point of truth and of the agile project approach.
Tino Eichler, Christoph Kremers, Florian Werner

Digital Performance Management: New Opportunities to Boost Efficiency

The Digital Strategy: The Guide to Systematic Digitization of the Company
The opportunities that digitization offers companies are unmistakable. One can almost speak of a digital gold rush. In fact, in many companies an actionist and uncoordinated image is evident in dealing with the possibilities of digitization: they approach the topic from a wide variety of directions and functions, but the individual efforts remain limited in their impact, as a comprehensive concept is lacking. The result is a digital patchwork carpet. Dealing with the creation of a dedicated digitization strategy can help to remedy this situation and catalyze the targeted exploitation of the potential that arises.
Daniel Kittelberger, Lea-Sophie Allramseder
SAP S/4HANA: Performance Management in Real Time?
For several years now, SAP S/4HANA made its way on to the agenda for finance and IT departments across various industries. Many companies are already in implementation, while other companies are in the phase of evaluating possible benefits. One of the most considered area of benefits is related to significant improvements in performance management with the goal of “real-time performance management.” Based on practical experience, this contribution examines what benefits can be achieved specifically in the retail and consumer goods industry and what the prerequisites for this are. Our results: there are indeed substantial opportunities. However, achieving them requires a solid business design and harmonized and stringent processes and data structures in controlling and underlying business processes.
Frank Poschadel
How to Use Robotics Within Finance Functions?
This contribution describes how the current trend of digitization has gained entry into the financial department. After standardizing processes and implementing shared services, the CFO Organization 4.0 is all about using the potential of big data, predictive forecasting, and robotics. This contribution lists the advantages of these technologies and contains some application examples for accounting and controlling functions. In addition, new roles and functions accompanied by the transformation will be highlighted.
Sina Gieseking, Kai Grönke
Big Bang Based Decision Automation
On the Implementation of Innovative Methods, Discovered by Top-Level Research, for Automatized Decisions in Replenishment, Price Optimization, and Campaign Management
In the following contribution, an innovative artificial intelligence technology will be introduced. It was developed by international top-level researchers and has found successful application in retail for years now. Future events in complex business environments can be recognized and precisely assessed by this artificial intelligence, and the insights can serve as basis for founded decisions. Further, a high degree of automatization can serve to reduce strain on business operations, while simultaneously creating more efficient processes.
This contribution highlights the implementation of statistical models and procedures that take all influencing factors and their interdependencies into account to calculate forecasts. In addition, the economic advantage by including variable costs and business targets into the optimization will be portrayed in particular. The area of application, the replenishment sector, as well as many other examples will be introduced.
This contribution aims at an audience consisting replenishment, purchase, marketing, and sales experts and responsible persons, as well as all those that are interested in an individual assessment of their customers, but do not have the necessary experience or methods to process the data at their disposal.
Mareike Clasen, Michael Milnik
Performance Management of the Digital Pure Play Zalando
This contribution describes how digitization is understood and lived at Zalando.
In the course of this treatment, the management accounting peculiarities in a digital environment, as well as the influence that digitization has on company management, will be shown. Furthermore, the development of digital business models and their influence on Zalando’s performance management will be reflected. Lastly, specific performance management approaches of digital economies will be highlighted.
Jörg Engelbergs

Planning, Forecasting and Management Reporting: Suggestions for Doing It the Smarter Way

Corporate Planning in Retail Companies: Efficient, Robust, and Flexible
The following contribution introduces essential elements of corporate planning as a central process of corporate performance management. The foundation for planning activities in the retail industry is outlined first, followed by a description of various forms of planning instruments, subjects, and processes. The contribution is concluded with possible solutions and examples for an efficient and flexible planning process in the retail industry. This is enriched by concrete examples from practice.
Michael Buttkus
Shorter Planning, Better Management
The exceedingly dynamic environment in the retail industry represents significant new challenges for planning and steering concepts. During the course of a project focused on optimizing the planning and steering concept at Manor, the leading Swiss department store chain, new planning and steering instruments were implemented. Simultaneously, the time and effort required for preparing the existing financial budget was significantly reduced in order to free capacities for a new steering concept.
A key element of the new planning and steering process is the rolling forecast, which is prepared by the sales team on a quarterly basis and represents an honest evaluation of the company’s performance. The forecast helps to identify changes in the business development and react accordingly by flexibly adjusting the resource management. New processes and instruments to determine and track binding measures and support a dynamic personnel planning process guarantee that gained insights are integrated into day-to-day operations. Our experience at Manor evidences that an improved planning and steering concept not only reduces the required time and effort for the preparation of the existing financial budget but also leads to measurable improvements in terms of revenue, margins, and costs.
Our approach to introducing new planning and steering instruments and our experience in the implementation process will be illustrated in this contribution.
Dominique Reuse, Mario Schoeb, Ulrich Teuscher
Planning 2.0 at REWE Group: Identifying Potential for Efficiency and Optimizing Planning Processes
In a highly dynamic and competitive environment, retail companies are facing tremendous challenges. Not only in sales but also in management accounting, business processes have to be highly flexible in order to guarantee short reaction times. Due to the high degree of complexity in dealing with different countries, languages, and cultures, these challenges are even greater for internationally operating companies. As in other industries, the retailing business also has long-lasting planning cycles that often lead to a high planning effort and tie up numerous resources. Plans lacking the necessary flexibility and planning values that are outdated when finally approved are the result.
Being an international company in the food sector, the REWE Group also faces challenges concerning various and highly competitive markets within a dynamic retailing industry. It is for this reason that REWE has decided to initiate a comprehensive program improving processes in controlling and establishing a sustainable management control. One pillar of this program focuses on planning processes and overall planning. A holistic, flexible, and lean planning solution is meant to result in more efficient planning processes and to increase the quality of planning sustainably. While being separated in two phases, the program begins with the definition of a rough concept of the new planning solution. The second phase focuses on detailing the concept and implementing the defined processes as well as a new planning software.
Anna Thiel
Enhanced Sales Management: Using Digital Forecasting
Methods and Uses of Automated Forecasts
This contribution is concerned with sales management based on digital forecasts. Estimating complex developments in companies is often characterized as an elaborate task. But as a result of digitization, there are new approaches for compiling automated and precise forecasts. The described approach in this contribution focuses on “Big Data” and “Advanced Analytics.” Outlined application examples underline the practicality of new algorithm forecasts with a higher quality, even though every company has specific requirements that must be considered.
Thorsten Lips
KPI Systems for PENNY Discount International
This contribution illustrates the project approach and key results of the introduction of a new steering and reporting system at PENNY International. In the course of the contribution, in particular, the central cornerstones of the project approach—harmonization of key performance indicators (KPIs), harmonization of the leadership and communication processes, as well as the standardization and centralization of the management reporting—are described in detail.
Johannes Isensee, Angelina Schulmeister

Functional Controlling: Business Specific Value Proposition

A 360° Portfolio Strategy in the Consumer Goods Industry
Eight Steps Towards a Holistic Management of Complex Product and Brand Portfolios
This contribution describes a solution approach to a holistic management of complex product and brand portfolios that has been tried and tested in the consumer goods industry. In light of the tension between an increasing product variety and a simultaneous increase in complexity, eight steps towards the development of a holistic portfolio strategy will be introduced. These range from its interlinking with the company strategy, over a market- and potential-oriented alignment of the portfolio, to sustainable steering approach.
Oliver Greiner, Svenja Stöveken, Nikolai Brosch
Risk Management in Retail and the Consumer Goods Industry
In retail and the consumer goods industry, digitization has introduced the chance of selling individual products via central platforms both cost- and time-efficiently and suitable for mass markets. Risk management can only take up the inherent effects of digital transformation on a business model, if it reaches a new evolutionary stage. The future is fraught with new risks a modern risk manager must identify and manage. Consequently, it is not only the business model that must undergo a digital transformation but also risk management. The following contribution uses a practical example to illustrate why a performance-oriented risk management in retail and the consumer goods industry is necessary. Furthermore, it shows how intelligent algorithms are contributing to an improved risk intelligence in order to identify specific risks like changes in consumer behavior or trend environment.
Johannes Hofmeister, Björn Portner
Corporate Controlling 2020: Trends and Challenges
This chapter will discuss current trends of development and challenges for corporate controlling.
In the light of a holistic consideration of all design aspects inherent to a corporate controlling function, nine theses will be used to identify significant requirements of change.
Additionally, functional recommendations for dealing with changes that already have general relevance in the short term will be given.
The suggested theses are not derived empirically. They much rather deliberately reflect the authors’ subjective observations.
Ralf Eberenz, Stefan Behringer
Revision of Financial Performance Management Systems in the Swarovski Group
Redesign and Harmonization of Heterogenic Performance Management Logics
Business models of companies may change over time, new models may arise, and existing models may become obsolete. Consequently, the challenge is adapting performance management systems to changing requirements. The Swarovski Group has had to meet this challenge and has decided to modernize the group-wide financial performance management system.
Reto Andreoli, Beate Oberholzer
Marketing and Controlling as Business Partners in the FMCG Industry
This contribution analyzes the changing role of marketing in the FMCG industry and the corresponding implications for controllers to be real business partners. The author outlines the key marketing success factors to build and manage strong brands and deduces from these factors the required data information and controlling tools.
Franziska Schmiedebach-Ullner
Holistic Management Accounting of Brand Performance in the Consumer Goods Industry
This contribution deals with the question how prospective marketing budgets can be allocated over the different communication channels as efficiently as possible. Differences between the various channels are analyzed. Measuring methods are presented, both for the effectiveness and efficiency of advertising campaigns. Besides that the author explains how to bring all of these factors into one holistic marketing steering system.
Oliver Hupp, Franziska Rumpel
Basket Analysis in Practice: Mathematical Models and Applications in Offline Retail
The foundation of every business model is a deep understanding of the customers’ preferences. Basket analysis can be used to reveal valuable insights into these preferences by analyzing massive transactional data sets that are nowadays available to bricks-and-mortar retailers. Within this contribution we review some of the requirements and mathematical methods that comprise the term basket analysis. Further, we discuss applications that leverage the discovered information and outline some of the challenges that the authors faced when applying basket analysis techniques in practice.
Carsten Moldenhauer, Henning Zwirnmann
Sales Performance Management
This contribution deals with the interdependency of controlling and the sales department.
The special importance of sales as an independent area for the corporate success is highlighted. This leads to the analysis of the sales department characteristics and how performance management generates value added to support the sales tasks. Relevant elements and instruments are explained in this contribution.
Heiko Schulte-Oversohl
Digitized Performance Management Along the Supply Chain
The following contribution illustrates effects and potentials that digitization has on the supply chain. Digitization creates new possibilities for a closer interlinking of participants as well as wide-ranging potentials for an optimization of supply chain planning and management. The potentials and control levers of a digital supply chain are largely situated in logistics, production, and the superordinate supply chain management.
Christian Daxböck, Jochen Kröber, Markus Bergmann
Opportunities for Supply Chain Processes by SAP S/4HANA
A current processual challenge for players of the retail industry is represented by the approach of omnichannel sales, which must not only be systemically enabled, but at the same time also secured by correct processes in the operations area.
In this regard, modern cloud-based system solutions do offer an opportunity to better respond to operational challenges of dynamic market environments. Simultaneously, they enable a further enhancement of the operational excellence of individual functional areas by providing novel system functionalities.
However, the transformation of individual corporate divisions is also accompanied by a large diversity of adaptive needs. The current example of an international retail client provides an exemplary insight in this regard.
Dominik Fuchs, Mathias Haas, Julian Dombrowski, Nicolas Göpfert
Performance Management in Retail and the Consumer Goods Industry
Michael Buttkus
Ralf Eberenz
Copyright Year
Springer International Publishing
Electronic ISBN
Print ISBN