Money for jam?

Chivers Ireland is a market leader in the important jam and jelly markets. However, with increased competition from Europe, the pressure on Chivers in the marketplace is mounting. To maintain its leading position, Chivers must continue to offer the best quality product at competitive prices. And that means challenging all costs. This, according to Chivers’ IT manager David Brady, is where IT has a role to play. “Computer systems help us to create a leaner organisation and to reduce the number of people involved in the overall process,” he explains. A recent project to bring IT to the manual forecasting and planning activity achieved exactly these goals. It was an activity that previously involved many people and resulted in inaccurate plans, leading to high stock levels in some areas and stock-outs in others. So customer service suffered. Just 12 months after installing Proasis forecasting and planning software, Brady is reporting stunning results. “The investment will pay for itself in less than a year,” he claims. Firstly, stock levels will have fallen from 10 weeks to five on the products Chivers manufactures itself, and from eight weeks to three on the products it imports and distributes. Stock-outs no longer occur, which has helped raise customer service levels from 94% to 99%. In addition, the number of staff involved in the forecasting and planning activity has been cut from three to one. In selecting the Proasis system for the forecasting and planning activity, Brady says he picked the product that exactly matched Chivers’ needs – and was easy to use. He was, in fact, following the advice he would give to anyone developing an IT strategy: “Do not try to replicate an existing manual system when you automate it. It will not work. It will create inefficiencies. You will not get the required payback.” What is important, he stresses, is to decide on the best way of accomplishing the task to be computerised and then to find an appropriate software package. This, says Brady, is the way to kill two birds with one stone. “You turn an inefficient process into an efficient one, and you also speed it up because you are computerising it.” Brady is adamant, however, that tackling projects in this way should not lead to the major development of bespoke software. He believes that very few companies’ needs are so specialised that an off-the-shelf package cannot be found today to satisfy them – although he admits that small programming adjustments are likely to be necessary. “There are likely to be one or two quirky things that apply to your company which will require small adjustments to the software. But these are justifiable if they result in a more cohesive product in the long term,” Brady comments. However, he does add a cautionary note. No matter how good the software product is or how well it matches the company’s specifications, it is liable to fail unless it has the full support of the users involved. As Brady says, “there is no point in buying a product and imposing it on the company. You will come up against a lot of opposition and people will put spanners in the works.” The solution, he believes, is to involve employees from those areas impacted by the implementation at a very early stage and to win their commitment. “The first important task is to create a balanced team of experts from each of the areas involved that includes not just the eventual users of the new system but also managers and directors. It is the job of this team to stay with the project to its completion. They will write the specification for the software, choose the best solution and oversee its implementation.” Brady’s priority today is the euro. In a project that is even larger than Y2k was, wide-ranging adjustments to the company’s financial systems for euro-trading are being made. However, work to extend Chivers’ use of EDI is also on-going. In 1999, Brady brought in GEIS’ EDI software package called Intercept and switched from a PC-based system to one based on the IBM AS/400 mainframe. With large supermarket chains driving the use of EDI throughout the industry, the intention behind the Intercept project was to implement a system that would enable companies that were new to EDI to introduce it incrementally. “We have been using EDI very successfully for the last two years for invoicing customers. Now we are planning to bring more customers onto the system and to extend it also to the creditor side of the business,” explains Brady. His aim is to reduce Chivers’ creditor paperwork by 10%. Looking to the future, the role of the Internet in Chivers’ IT strategy will grow, he says. The company has a website that today is mainly a marketing tool. In any case, the Chivers product, says Brady, is not one that lends itself to trading over the web as it is characterised by large bulk and low volume. However, he does foresee two directions that the Internet could take within Chivers. First, there is the possibility of using it for purchasing raw materials. Second, the Internet would form the communications pipeline for a B2B process that Brady is currently looking into. “We would like to see a closer integration between our systems and the systems of our customers so that we could look into their stocks and see whether they needed to be replenished. The benefits of tying ourselves more closely to our customers, including understanding their business better and having access to sales data by branch, would be tremendous. It would even enable us to set up promotional activity, that we could send over to customers via the Internet,” he comments. A number of collaborative systems are available on the market, including one from Proasis. Brady is convinced that this is the way the industry is moving. He expects to have such a system in operation within the next three years.