DEl MonTE FooDS
Transcription
DEl MonTE FooDS
CASE STUDY Del Monte Foods CLIENT PROFILE Based in Ontario, Canada, Del Monte Foods Inc is a Fresh Pack food processor for established brands such as Del Monte Foods and Aylmer. Formerly part of the Kraft family, Del Monte Foods divested into its own corporation in 2005. 2 THE CHALLENGE After divesting from Kraft, Del Monte Foods had one year to decide whether to stay on the Kraft system infrastructure or to move to a new system. The Kraft infrastructure consisted of 14 business systems including SAP, mySAP, R/3 for sales orders, Manugistics for production forecasting, Prism for plant reporting, KARS for AR, GEAC for general ledger, and GSX for EDI. They narrowed down their search to two systems JustFoodERP powered by Microsoft Dynamics NAV and SAP All-in-One. When Del Monte Foods started to do comparisons, both solutions looked good. As they dug deeper, even though it was the incumbent solution, the fact that SAP required an IBM iSeries platform meant that it required specialized people to run it which made it more difficult to adopt. Del Monte Foods did a feasibility study and found that to keep these 14 interfaced business systems in place it would cost $3-to-4 million per year in licensing, maintenance and internal specialists. This motivated the decision to find one integrated Enterprise Resource Planning system that would meet all of their business needs and reduce overall costs. Once the decision was made to go with JustFoodERP, powered by Microsoft Dynamics NAV, a new challenge arose. Being a Fresh Pack food processor means that Mother Nature dictates the packing season, which is less than 16 weeks long. Implementation of the new system with 160 users and four facilities had to happen in less than 6 months. With sales mainly in North America, Del Monte’s substantial size meant that they needed an integrated and robust business system to support their complex operations. 3 THE SOLUTION From the start of the project, the Del Monte Foods management team knew that they wanted to go with a productized solution versus a customized solution. They didn’t want the risk of having a system that might not be supported in the future. Both the President and CFO of Del Monte Foods met with the President of Microsoft Canada. This relationship helped give Del Monte Foods a better understanding of Microsoft’s commitment to the ERP space and a clear sense of the strategy Microsoft is taking in tying its infrastructure and platform products together. Knowing that a product roadmap for Dynamics NAV existed to 2013 and a support structure to 2020 gave both Del Monte Foods and their largest shareholder SunCapital confidence in their choice. The implementation took place at three plants and one technical centre simultaneously. All fourteen systems were replaced and moved into three systems, JustFoodERP plus GSX for EDI and ESSBASE for reporting. Del Monte Foods had sophisticated users and sophisticated requirements. As such, the first phase of the implementation included all finance modules including fixed assets and inter-company transaction processing. Inventory included full lot tracking and expiry analysis. Manufacturing included full material planning and production scheduling. Del Monte Foods also implemented warehouse management at its facilities to track material movement. The quality module was also implemented in Phase One to ensure Del Monte Foods complied with all food safety requirements including the need to quarantine certain finished goods. 4 In addition to the large scope and short timeframe for go-live, the implementation had two other areas of added stress. First, Del Monte Foods went live on the first day of pea pack, meaning the operations would run 24/7 for months on end with little opportunity to take the system offline. Second, Del Monte Foods made the business decision to change their fiscal calendar to coincide with the pack season. Under Kraft, Del Monte Foods operated on the calendar year. Costs and sales for a given growing season were not recorded in the same fiscal year making planning and budgeting much more difficult. With the new system implementation, Del Monte Foods changed their year-end to coincide with the lowest points of inventory valuation so that production costs were in the same year as revenue. “JustFoodERP is my fourth MS Dynamics NAV implementation. There is a clear difference in what you can achieve with an out-of-the-box fit offered by a product like JustFoodERP. Taking a product approach versus a custom approach reduces implementation costs, risk of failure, and drives adoption of industry best practices.” Kirk Southcott, IT Manager of Del Monte THE BENEFITS One of the immediate benefits was a new level of transparency of data and information. Reporting on items like reconciliation and allocation took minutes and were in one single place as opposed to days and a myriad of spreadsheets. In Del Monte’s legacy system, results would take weeks to process and disseminate to employees. Quick decisions were difficult to make. Much of the data between 14 different systems had to be manually massaged into a central data warehouse creating a time lag. With JustFoodERP, employees can have access to information in real-time. Del Monte’s management team can react to information quickly and make changes where productivity needs to be improved. THE FUTURE Kirk Southcott, IT Manager of Del Monte Foods points out, “With the initial goal to have everything in the plants running on one system, the next phase will be to integrate the Trade Promotion Management module of JustFoodERP. Currently we use a hosted solution that has relatively low adoption within our company.” “By moving to JustFoodERP’s Trade Promotion Management module, our employees will be able to support the full process using a tool that is fully integrated to our financial system and is easy and familiar to use. This move will improve our trade spend management and reduce the significant costs associated to our hosted provider each month.” SOLUTION SUMMARY JustFoodERP and Microsoft Dynamics NAV Location: Toronto, ON Implemented Modules: Finance, Sales, EDI, Purchasing, Inventory, Manufacturing, Quality, Trade Promotion Management 5