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Chicken of the Sea International Case Study

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Chicken of the Sea International Case Study AVATA | Chicken of the Sea International Case Study AVATA is a recognized leader with deep industry, business, and technology experience specializing in the implementation of Oracle Supply Chain Planning and Oracle Supply Chain Execution solutions. Where strategy meets execution page 1 AVATA | Chicken of the Sea International Case Study - May 2016 Chicken of the Sea is a household name in shelf-stable (primarily canned ) Corporate Headquarters 9330 Scranton Rd tuna and other seafood. A division of Thai Union, the world’s leading seafood San Diego, CA 92121 USA company, Chicken of the Sea is number one in canned tuna worldwide and number three in canned seafood in the U.S. The company sources its products into six distribution centers from a number of factories across the globe, some company-owned and others not. PRODUCTS Tuna Salmon Clams 450 Crab customers Mackerel Oysters Sardines 8800 Shrimp promotions per year Kipper Snacks 400 million in sales When Chicken of the Sea replaced its outdated ERP system with a complete Oracle solution, the plan included a full implementation; from basic financials, planning, scheduling and inventory control to advanced demand management and predictive trade management in one big project. “That statement may be a bit misleading,” says Darren Parsons, Vice President of Trade Marketing. “Of course we had to install the basics first, and then add the advanced modules in a planned expansion through the life of the implementation process.” And that’s just what they did, successfully implementing basic planning, operations and financial modules according to plan. When it came to adding the advanced planning piece, consisting of the Demantra Demand Planning, Predictive Trade Planning and Deduction Settlement Management, things did not go quite as planned. “Our implementation partner did a great job as far as the basic implementation,” Parsons says, “but when we started discussing the Demantra advanced applications, we ran into problems.” It seems that the implementation partner was out of their comfort zone with these Demantra advanced applications. page 2 “When we talked to them about our business processes and needs, they told Case Study: COSI us that the software could not support our needs and custom code would be May 2016 required. This didn’t sound right. How could a software package with a good reputation and successful users not support our processes, which are not unique to our company or our industry.” Parsons and his team searched for and found a different implementation “They say the third time partner to help with the Demantra applications. “This second partner is the charm, and that’s talked a good game.” Parsons says. “They seemed to understand what we been the case for us with wanted to do, and seemed to know the software well enough. But when it this implementation,” came time to actually implement the functions, they simply didn’t have the Parsons says. “We asked knowledge and experience necessary to deliver on their promises.” Once Oracle to help us find again, Chicken of the Sea had to look for a partner that could help them someone with the in- implement these important applications to complete the Oracle system depth experience and and give them the tools to manage demand and promotions. capabilities to help us move forward. They gave “They say the third time is the charm, and that’s been the case for us us a few leads, which we with this implementation,” Parsons says. “We asked Oracle to help us find pursued, and that’s how someone with the in-depth experience and capabilities to help us move we found AVATA.” forward. They gave us a few leads, which we pursued, and that’s how we found AVATA.” The Demantra implementation is nearing completion, and the company is already seeing better forecasts and more coordinated planning across the organization and its markets. Built on a foundation of basic demand planning and forecasting functionality, the solution incorporates a predictive engine that is able to combine the company’s own demand data with market data from third-party sources (sales data, pricing, promotions and more, gathered from grocery chains and retailers for all competing products in the markets) to predict the expected outcome from promotional activities like price changes, coupons, advertising and account-specific marketing activities. The predictive engine forecasts sales, as well as profitability, so promotional programs can be tailored to drive the best results for Chicken of the Sea. Chicken of the Sea competes in a highly promoted category. “Our customers are extremely price sensitive. Generally speaking, when they buy tuna, they’ll choose the one that’s on sale or offered on some kind of promotion. So trade promotion is critical for us. As with most CPG companies, trade promotion spend is the number two item on our P&L, second only to cost-of-goods. It’s a critical function for us and we have to use that money wisely.” page 3 Case Study: COSI Parsons willingly states that his group has moved from being behind the times to May 2016 being on the cutting edge of planning and promotion management. “Before this change, we handled each of the three parts of our responsibilities in separate systems and brought the information together manually using spreadsheets; not very efficient or effective.” The Demantra solution brings the whole process together, provides the team with a lot more information and intelligence (compared to the disconnected spreadsheet-driven method), develops better forecasts, and additionally integrates with production planning and financial information to close the loop and make the whole process more effective. Here’s an example of how that works: The market data helps the predictive engine calculate the effect of proposed promotional activities by analyzing what happened before with similar actions (including competitors’ experiences). The resulting forecast forms the basis for the production and distribution plans. When the offer is presented to the retail partners, they may accept or reject the offer (they may already have committed to a competitor’s promotion on the same dates) or suggest/request a change. Chicken of the Sea can go back to the planning system and check the profitability, adjust the production plans, and reallocate inventory according to the changed forecast. And it’s all done quickly, so the company can make critical decisions immediately with full awareness of how the modified program will affect production, inventory and profitability. Trade Promotion Optimization Forecast Predictive Analytics Engine Market Data Plan Complete Supply Chain Visibility Launch page 4 Case Study: COSI Once the promotion is launched, the integrated system allows the company to May 2016 adapt quickly to actual sales. If a promo is terminated early or just doesn’t meet expectations, any un-spent promotional money can be quickly identified and re- allocated to other promotions. Before, it could take months to identify un-used promotional funds, often too late to reapply them to more profitable use. Overall, the sales and marketing process is much more coordinated and streamlined with the Demantra tools. This allows sales to focus on developing the best sales plan that takes into account competition, promotions and the realities of production and distribution. The convergence of technology and process saves time and effort as it brings together what were previously separate activities. Parsons and his team knew from the beginning that the Oracle and Demantra tools were just what was needed to move Chicken of the Sea forward, but it took a couple false starts before they connected with AVATA and began to realize their vision of integrated demand planning, promotion management and predictive analytics. “AVATA had the experience and the knowledge that were needed to bring this software into our organization and into our daily processes. Every single business process and business challenge we brought to the table, AVATA was able to resolve without any sacrifices and without custom programming. In fact, the system is delivering better function and better results than we expected,” Parsons says. The Bottom Line... It will take another couple months to finish the full integration of third-party data into the promotion and account-specific marketing functions. Overall, the implementation has been remarkably smooth and the company is already seeing the benefits of an integrated, streamlined process and the advanced functionality Demantra provides. With the help of Oracle, Demantra and AVATA, Chicken of the Sea is now better able to target promotions to where they will be most effective, provide the right amount of product at the right place and time to meet demand, and do it all more profitably. AVATA is a globally recognized consulting firm of business and supply chain experts that help companies solve critical business issues through people, process and technology. As an Oracle Gold Strategic Partner, we offer a unique blend of real-world industry experience, best practices, and software expertise. Leveraging Oracle’s JD Edwards, Supply Chain, and Cloud solutions, we successfully deliver rapid improvements impacting bottom-line performance. Combining this with our AVATA Business Cloud, we’re powering the next generation of enterprise solutions delivered rapidly in a SaaS model. AVATA | 3000 Youngfield, STE 187 | Wheat Ridge, CO 80215 | 720-400-8898 | www.avata.com | [email protected] page 5.
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