When Heinz Belgium found its legacy IT system was unable to cope with its rapid growth, the company turned to IBS for a solution.
Flor Dierckx, Financial Services Manager of Heinz Belgium wanted to have one IT partner for its supply chain management needs.
Company background
H.J. Heinz is one of the world’s leading marketers of branded foods to retail and food service channels. The company’s renowned brands can be found in more than 50 markets worldwide. Heinz expanded its European presence in 1999 by acquiring Serv-a-Portion of Belgium, which became a wholly owned subsidiary under the name of H.J. Heinz Belgium.
Heinz Belgium is a producer of jams, condiments and sauces in portion packs (cups, sachets and small glass jars). Its customers are mainly food service companies supplying a wide range of end-user segments such as hospitals, hotels, restaurants, air catering and fast food outlets throughout Europe. The company has experienced rapid growth and is well on its way to becoming the continent’s leader in the field of packaged food portions.
Heinz Belgium employs 150 people and has a turnover of EUR 75m.
Business issues
Heinz Belgium’s product range of food packages is becoming a vital part of Heinz’s food service development program. In fact, 90 percent of the Belgian production is destined for the international market, particularly to neighbouring countries.
With its rapid growth, Heinz Belgium felt that improvements in efficiency could be achieved without a significant increase in staff levels. The company has to cope with complex challenges, which can cause heartburn for its customers. The company’s food products must be high-quality and meet health standards, no matter whether it is fresh, frozen or processed. Moreover, a half-baked system could leave Heinz Belgium’s business in the deep freeze when it comes to reliable supply, pricing and delivery.
Cost accounting was also of importance, since the company works with complex pricing structures, which needed to be measured against related manufacturing costs - by the minute.
Heinz Belgium was in a pickle and quickly realised that its legacy system was unable to keep up with the company’s rapidly shifting needs and explosive growth once it was acquired by the Heinz Group. So outdated was the old software that it was not even Y2K compliant and the software supplier was limited in its range of activities. This caused concerns for Heinz Belgium about on-going support and stability.
In essence, the company was looking for a integrated software solution to fit all its business needs as well as a financially solid, experienced and proven business partner with whom it could work comfortably - and whom it could trust. In particular, the new software solution had to completely integrate production, administration and logistics.
Solution and capabilities
Heinz Belgium created a list of criteria to alleviate its jam. This was sent to prospective software vendors and after an in-depth study of four leading ERP vendors, the company finally selected IBS’ integrated supply chain management software, ASW.
Heinz Belgium chose IBS and ASW for reasons of value, usability and experience. IBS was able to put forward references based on many successful implementations and satisfied customers both within Heinz’ industry and others. ASW proved to be totally integrated, boasting the right functionality that required little customisation over and above the standard system. The cost of ASW was attractive and, more importantly, the relationship and trust that IBS could offer clinched the deal. In order to gain access to future releases, Heinz Belgium purchased most of the standard ASW modules.
ASW is ideally suited to the food distribution industry with support for sales, CRM, marketing, financial control and business performance measurement and decision support. The solution also serves up opportunities for quick Return on Investment (ROI), measurable Key Performance Indicators (KPIs) and real value. To deliver food products in the quickest, most cost-efficient manner, IBS has provided Heinz Belgium an integrated IT solution that automates and optimises all processes from the warehouse to its customers.
Heinz Belgium went live successfully with ASW within a nine-month period. Conversion took place over one weekend and on Monday morning all the users were up and running, with the first invoices being processed. The acquisition of the Belgian company by Heinz also occurred during this period, along with many other company changes, including new production lines. Despite this uncommon situation, the project was accomplished successfully, on time and within budget.
Benefits and value
Heinz Belgium remains very enthusiastic about its choice of a comprehensive business system supplier. The benefits of an integrated solution are apparent. The integrated nature of ASW has eliminated delays in the measurement of manufacturing costs.
The total integration inherent in ASW provided a way to link all system information with Heinz Belgium’s standard reporting tool. This provides a comprehensive range of standard reports, which can be used and changed on-line. All production data is passed directly to a dedicated computer, which means that Heinz Belgium no longer has to maintain two bills of material.
Mistakes and discrepancies between the ERP system and the production server are a thing of the past. Heinz Belgium now avoids duplication, resulting in a more effective, less-costly work force.
Despite the powerful functionality of the system, Heinz Belgium finds ASW less complex than anticipated. Benefits are also gained in the overall management of the system, with improved reporting and a better understanding of its business - all this without the need to employ IT staff.
The most important advantage for Heinz Belgium has been a major improvement in efficiency. Since the implementation of ASW, the company turnover has grown in only four years from EUR 25m to EUR 75m with little change in headcount.
Name: H. J. Heinz Belgium Region: Belgium and Europe Operation: Manufacturing and distribution Products: Sandwich fillings, jams and sauces in small-portion packages Employees: 150 Revenue: EUR 75m in 2003 Website: H. J. Heinz Belgium
Issues
Need for an integrated system
Eliminate duplicate information
Need for interface to the Heinz head office computer system
Production costing problems needed eliminating
Need for greater efficiency
Delays in the measurement of production costs.
Solution
Integrated software solution for food production and distribution
Sales order management
Procurement
Inventory management
Manufacturing
Warehouse management
Business intelligence
Financials.
Capabilities
Group performance measurement
Integrated processes
Decision-support information
Cost control
Compliance with food safety legislation
Supply chain visibility
Flexible interface with Heinz HQ
Cost accounting
Flexible bill of material processing.
Value
Improved processes
Increased customer satisfaction
Reduced staffing needs
Increased internal controls
Faster reporting to HQ
Significantly improved efficiency, enabling growth from EUR 25m to EUR 75m with almost no staff increases.
