- Food and Beverage
- Company Type:
- Food Distributor
- Company Size:
- Job Functions:
- Marketing, CIO & BI Director
- BI Strategy and Planning, BI Requirements Analysis, Custom Application Development
Challenge: How to profitably grow revenues and market share while reducing inventory, reducing supplier-caused out-of-stocks, and reducing slow-and-obsolete inventory – all while maintaining or improving customer service.
Leading the Way in Natural Foods and Natural Products
Our client is a leading independent national distributor of natural, organic and specialty food products. Its revenue is generated by distributing over 60,000 different products to over 17,000 customers in multiple channels via a national network anchored by 20 distribution centers. In addition to excellent distribution services, the company provides a range of innovative, value-added services for its customers and suppliers, which foster mutual success and growth. These services include marketing and promotional tools, merchandising, category management and store support services.
Building Market Share through Operational Excellence
The $110 billion natural, organic, and specialty foods industry is the fastest growing sector in the overall food industry. The sector is highly fragmented at the retail and manufacturer (supplier) levels, but is highly concentrated at the distributor level. This creates an opportunity for the company exercise its market power to help the industry continue to grow and to become more profitable as it matures. With this opportunity comes the marketing challenge of having the right products in the right places at the right time, and for the right price – which requires an expansive view of the entire value chain.
Having grown by acquisition, the company’s information infrastructure consisted of a number of regionally-focused legacy systems on different platforms, which made it difficult to gain an enterprise view of their business. Examples relating to the marketing challenge of profitably building market share include:
- Product information: the regional systems frequently used different names and product categories for the same end product, making it hard to get a comprehensive view of sales volumes and limiting the company’s ability to analyze product margins, new product revenues, and other marketing fundamentals
- Place information: the regional systems frequently used different terminology and conventions regarding customers. This made it difficult to obtain a comprehensive view of what products were selling where and in what volumes, thus limiting the company’s category management, assortment optimization, inventory management, and distribution planning efforts and creating margin drains.
- Price and promotion information: the differences between the regional systems product and place information combined to hinder the ability to analyze marketing fundamentals such as the price elasticity of demand and promotional effectiveness.
More broadly, the lack of an integrated enterprise data warehouse to enable fundamental marketing analyses was limiting the company’s ability to grow profitably and collaborate with retailers to promote growth and profitability for the entire value chain. To overcome this strategic and operational limitation, the company required an enterprise data warehouse and a plan to roll out BI applications to perform fundamental marketing analyses.
The BI Vision and Strategy – Meeting the Marketing Challenge
The company selected DecisionPath for our combination of food industry experience, BI thought leadership, and practical experience helping clients integrate all information required to find and serve the right customers. Using the BI Pathway Method, DecisionPath partnered with the company’s Vice President of Systems and its BI Director to engage executives from key business functions to create an enterprise BI Vision and Strategy. In particular, the National Vice President of Marketing articulated a compelling business vision whose attainment would require fundamental marketing BI capabilities such as the ability to:
- quickly and accurately analyze new product performance in all its dimensions – revenues, distribution, failures, slotting fees, etc…
- routinely analyze all relevant dimensions of customer relationships, e.g. revenues from new customers, customer profitability, top customers, and lost customers
- have accurate and timely historical multi-dimensional information on revenues for use in sales & operations planning, revenue planning and management, and sales analysis by various factors such as by retail category, and by supplier
- leverage standardized analyses of supplier performance, product margins, and promotional deals
In addition, we engaged with business representatives from the pricing, purchasing, and finance functions to further enrich the BI Vision and Strategy.
To help prepare to move forward, DecisionPath also analyzed the company’s technical readiness and challenges in relation to creating an enterprise data warehouse to enable the BI Vision and Strategy. In particular, we delved deeply into the challenges of integrating marketing and financial data from the legacy regional systems to create a unified enterprise view of fundamental marketing and business performance information. This resulted in a high-level design for an enterprise data warehouse and a business case for iterative development and delivery of specific data stores to enable the BI analyses Marketing requires to profitably grow revenues and market share.
Better Serving Customers and Partners
As a result of this engagement, the company has a clearly articulated strategy for leveraging BI and a low-risk, practical plan for delivering BI applications that will enable its marketing team to achieve its business objectives for profitable revenue growth while creating win-win situations with its key customers and suppliers.