The pick of the crop
The pick of the crop
CFO Bill Cole is reaping the rewards from an IT overhaul, but finding a platform to match all Sunbeam's requirements wasn't easy. By Christine Gill.
When Irymple Packing and Mildura Co-Op dried fruit processing operations were vertically integrated into Sunbeam Foods last year to create a single operation, Sunbeam's chief financial officer Bill Cole had more to worry about than the structural integration of moving plant and equipment.
With the merger, Cole ended up with seven separate databases across the company which was causing a lot of administrative issues and duplication. He also needed to integrate the full gamut of fruit procurement - from grower to processor through to packer and distributors, but he couldn't find a single software solution that could cater to the company's complex inventory requirements.
The difficulty, Sunbeam had two very specific needs. It needed to look more closely at its grower base and it wanted to address the problems it was having with its promotional terms (which had been written by third party organisations and bolted on to existing systems).
Rationalisation of the dried fruit industry
For over 100 years, Mildura-based Sunbeam Foods has marketed naturally dried fruit products both locally and overseas. But over the past decade, the Australian dried fruit industry has seen rationalisation of the processing industry, with the Mildura region accounting for about 70 per cent of the nation's dried fruit production.
In February 2002, in an effort to re-establish its foothold in a competitive global industry, Irymple Packing Pty Ltd and The Mildura Co-Operative Ltd dried fruit processing operations were vertically integrated into Sunbeam Foods, combining their procurement and processing activities to create a single operation. Both Irymple and Mildura Co-op owned Sunbeam Foods.
The merger meant a lot of change to the way the company did business, says Bill Cole, "We were acting as an agent on behalf of the packers who purchased directly from the growers. Although we were a separate entity we were still their agent and they were still our major shareholder, which caused a number of complications to us. The organisational structure had too many layers and the way we went about sourcing the product meant that we didn't have direct access to the growers which is why we decided to integrate those dried fruit divisions."
Before the merger, each company was running on separate enterprise-wide resource planning systems involving two different versions of MFG/PRO. "The packing companies had their own IT systems and we had our own IT system and we did things differently: "We had separate export systems, asset registers, front ends for sales and marketing, which also meant we had two P&L's and balance sheets, which was a bit awkward. We didn't even have a database to process our imports - we had to do that on Excel spreadsheets."
All of that made it very hard for Cole to look at the full processing and inventories of the combined companies."Before the merger we put together a plan so we could integrate the companies but at the same time have a fresh look at the IT. We decided to do this in two stages. Stage "A" was to find an interim solution so that Sunbeam could continue to receive fruit from its growers while at the same time, come up with a process of how to get inventories through from one system to another, and account for that, which we have done quite successfully."
The second stage in the plan involved a total overhaul of Sunbeam's IT systems, "Before deciding on a system, we looked at the existing processes and the future processes, and we felt that we had to re-think and re-engineer what we were doing."
Bringing in a new IT dawn
Sunbeam installed Intentia's Movex which was modified to handle the company's complex inventories as well as its promotional terms. "We looked at a number of systems for our inventory but there was no one system that could give us a total solution. But [Movex] was still the closest to being a system that we could "pick up and run with. In fact, if we didn't need the modifications, we could have run with it as it was."
The new system houses a variety of information including HR policies, financials and customer compliance, as well as the results of product quality tests. But its true value lies within its reporting capabilities: "We can turn a forecast around very quickly and feed that into our manufacturing process in moments, whereas it used to take a considerable amount of time. We can get better reports out because it has a far easier report writer [COGNOS] that can be easily utilised by our in-house people rather than having speciality programmers to write reports for us. It also allows us to write additional reports to our requirements."
"We also require a data warehouse to be built for the extraction of data on a nightly basis that's going to spin out a set number of reports to be made available for all our business managers, linking our offices in Sydney and Melbourne. We are upgrading their [business managers] file servers to hold the data warehouses so they can drill down by customer. Through the various reporting mechanisms that come with Movex the amount of interrogation and drill down is quite unbelievable. So there is a lot of interest there for our business managers who do not have this type of information now."
Costing one million dollars, the total overhaul will take six months to install. Completion date is set for July this year which is when the central database will be made available to all employees - from factory floor, to administration and through to Sunbeam's business managers.
Cole says the benefits of installing a single platform are enormous. "At the end of the day, [Movex] will be able to give us a lot more information in terms of what product we source, where we source it from and almost down to the area where we can pick [the fruit] out from. So that's going to be very beneficial to our purchasing and receivables side, and just in the overall scheme of things. It should make it very easy for setting budgets and plans - and the simple uplifting of demands will be executed within minutes rather than undertaking massive re-keying exercises."