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125-year-old Spice Company Takes a Fresh Look at Profits

  • October 01 2001, 1:00am EDT


REVIEWER: Julie Quass, director of cost and financial planning for Tone Brothers.

BACKGROUND: Founded in 1873, Tone Brothers has become a world leader in spice production for the retail and food service industries. A division of Australia-based Burns Philp, Tone Brothers operates the largest spice production facility in the world from its headquarters in Ankeny, Iowa. Tone Brothers produces a variety of well-known brands, including Spice Islands, Durkee, French's seasonings, Trader's Choice, Tone's and DecACake. Tone's also produces and distributes a wide range of private-label products.

PLATFORMS: IBM AS/400 model 830 system.

PROBLEM SOLVED: In the past, Tone Brothers utilized manual processes for analyzing sales data; but for any information beyond that, we had to dip into data from our ERP system or simply make assumptions about costs. Unfortunately, that meant answers to any given questions might vary from analyst to analyst within our organization. To address the problem, we began a search for software to automate our analytical processes and provide a more consistent, complete and accurate picture of our data. Our search team knew that Silvon's Stratum product was in use by International Multifoods, another major food products manufacturer. After a mid-winter trip in 2000 to visit the Multifoods facility in Minneapolis, we finalized our choice to proceed with Stratum as our analytic application.

PRODUCT FUNCTIONALITY: Using built-in enterprise connectors and transfer logic written by Tone's in-house programmers, Stratum created an information warehouse by extracting approximately two years of data history from the company's PRMS ERP system. Tone Brothers implemented the Stratum Sales Performance Management module, which includes five integrated applications: Sales Analysis, Open Order Analysis, Sales Planning, Sales Forecasting and Inventory Analysis. These analytics were used to scrutinize profitability issues and take action. Stratum enables Tone Brothers to examine profitability by customer, product and brand. Stratum enables contract support staff to closely compare costs versus profits per customer which allows sales reps and brokers to adjust product mix or renegotiate deals accordingly. This is critical because significant sales costs for Tone Brothers are actually built into our more than 1,000 customer contracts. Stratum allows Tone's marketing staff to analyze profit margins per product and manage rollouts accordingly. Stratum is also helping us identify where we can control production costs. For example, Tone's R&D teams can examine product ingredient costs to determine where a grade change might be feasible ­ reducing production expenses without affecting quality or flavor. Stratum has helped brand managers determine product redundancies across brands and shift labels or discontinue lines according to profitability performance.

STRENGTHS: The consistency and integrity of Stratum analytics are very high. The software is very user friendly and provides a more detailed view of costs for the users than our prior, manual process. It also allows users to create reports on the fly with little time commitment.

WEAKNESSES: Printing directly from the system is difficult and the output is visually unappealing. However, Silvon has recently introduced information delivery options for report writing and broadcasting to address this weakness. The written and online manuals could use more examples.

SELECTION CRITERIA: We were looking for a product that was user- friendly, had a quick program speed and a hierarchy that was easy to understand.

DELIVERABLES: The Stratum product suite features hundreds of prebuilt, best-of-breed analytical views and reports. Contribution margin reports are the most popular analytical reports generated by Stratum for use by the analysts and other business users at Tones. In addition to its powerful views and reporting templates, Stratum incorporates Silvon's DataTracker technology. DataTracker features a relational data warehouse, an online analytical processing engine, closed-loop processing functionality, a built-in planning application and enterprise connectors for extracting, transforming and loading data into the Stratum data warehouse from ERP, CRM and other Web-based business transaction systems.

VENDOR SUPPORT: The pre-implementation support provided by Silvon was good. Post-implementation support has shown some delays in help desk response. However, few problems have arisen since implementation, minimizing the need for support from the vendor.

DOCUMENTATION: The written and online manuals could use more examples. They are very basic.

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