At Gillette Group, the nation's 10th-largest Pepsi Cola distributor, business is alternately bubbly and flat. That is good news however; the non-carbonated beverage business has been booming alongside traditional soda sales. But a slew of product introductions and organic business growth brought the Wisconsin-based private distributor success as well as challenges. Product SKUs have grown from 128 in 1995 to more than 500 today. Gillette Group owns thousands of soda machines, fountains and coolers and serves some 15,000 outlets through four distribution centers and a satellite business in Iowa. It adds up to a lot of product in a lot of places.
A decade ago, Gillette Group worked off weekly paper reports that often weren't worth the effort. " At the end of each week we had lots and lots of paper that we'd have to distribute," says Patti Gillette-Ostrom, IT director at Gillette Group, "and then it would sit on people's desks because it was too difficult to read."
This also led to a lot of ad hoc specialized reporting requests that bogged down Gillette-Ostrom's IT group. "The data was cut in just one way," says Curt Root, Gillette Group's controller. "It was about four pounds of paper that didn't really give you what you needed." What was needed was a good reporting system to serve salespeople, the sales managers and upper managers at both the regional and corporate level. So in 1995, management settled on a business intelligence product from technology provider Salient called Margin Minder.
As the solution rolled out, sales managers were able to begin diving into their own market and product data, initially measured across four fields of data: sales, revenues, cost of goods sold and margin contribution. As additional information was incorporated into the system, users were eventually able to examine information across 380 fields.
All the reporting integrated with Microsoft Office and could be exported in Excel and other formats. At the corporate level, Gillette Group marketing director Cal Erickson saw an immediate benefit in the key area of introducing and judging new products that also helped managers downstream. "We had a much better view of the distribution of the products and pricing. From a marketing standpoint if we had a program we could post-analyze and run daily updates. It was impactful for sales managers because now we could prioritize their volume by account. They could see where they had a win." By the same token, marketing could see if it was spending too many dollars in a smaller account where trends were declining over a period of months.
For example, diet Lipton Green Tea is a hot product for Gillette right now, but is it a good product to sell in 15,000 outlets? "A lot of time and energy goes into what we put on shelves," says Root. "We always have a limited amount of space. Every time we get a SKU we can't just go in and add another six feet, so we have to be careful what we place in various outlets."
"In the case of green tea we set up predetermined volume segments in the system and did a sanity check if you will," Erickson says. "Based on our knowledge and the demographics, we could see where we want to sell green tea and then had a sales coordinator track distribution monthly to see how we were doing against our goal."
At the controller level, that helped Root determine what was driving profitability. "We obviously look at our gross margin and all the components of that very closely. Before we installed the latest version of Margin Minder, we would have someone at the end of the month putting together the traditional, high level gross-profit information on a consolidated Gillette-wide basis with all these pieces that would have to be allocated." Root says assembling the report was "almost an art form," a process that took seven or eight hours each month. Now the process takes less time than a beverage break, and delivers data by location, product type, package size, carbonated versus non-carbonated versus water. "This is very helpful going forward because we're not the same business we were even two years ago," says Root. "We've seen our business move from carbonated soft drinks to non-carbs and water. I won't say the system is perfect at this point but the information we're getting today is a lot better than what we got before this version." The bugs that remain are mostly in the realm of integrating rebate and other program/promotion information.
"We first put Margin Minder in for sales, but talking to Curt [Root] you can see that sales, accounting, vending people that rely on it," says Gillette Ostrum. "Now, operations is using the system which gives them actual delivery route numbers, the actual driver and the actual day of delivery." Information goes into Margin Minder at the invoice level, supported by GEAC and a Garman routing system, which tells supervisors if a product was sold or delivered out of sequence. "We can tell them what kind of truck it was on, reasons for returned products, just a lot of information."
The system allows users to set predefined views, or "bookmarks" for particular programs they are interested, like Erickson's under-the-bottle cap promotion, which also yields data on shrinkage and theft. The scripts might be for private use or global distribution. Security administration limits field access and permissions for all users. Future projects are driven by an IT steering committee, which is presently backed up with requests. All in all, there's nothing short of high praise for the improvements the system has provided Gillette Group. "Let me put it this way," says Gillette-Ostrum. "We would never go back to paper, there's nothing out there that I know of that could provide us the information and easy access to data that this product has [given us]. We have a lot of things we want to add in the future but we're so busy it will have to wait a while."
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