By Mel Duvall  |  Posted 2005-03-07 Print this article Print

The beverage maker is being spun off from Procter & Gamble. In 12 months, it plans to run a $600 million business with a technology staff of—count 'em—six.

Breaking Away

Winholt got the call to come on board in early May 2004, almost three months before the sale of Sunny Delight. The technology challenge: Sunny Delight had been tightly integrated into the rest of the P&G empire five years earlier through a companywide rollout of SAP financial, supply chain, manufacturing and production applications. That meant Sunny D's infrastructure—from financial software to billing and invoicing to production forecasting and planning—could not be extricated from P&G. In effect, Sunny D had no infrastructure. It all was P&G 's.

Just prior to Winholt's arrival, Childs hired a Phoenix-based outsourcing firm, OneNeck IT Services, to begin due diligence on the technology required to run Sunny Delight as an independent operation.

Childs had used OneNeck when it purchased Meow Mix in February 2002; Nestle had bought Ralston Purina but was ordered by the Federal Trade Commission to sell the dry-cat-food company. OneNeck president Chuck Vermillion says the firm initially looked at using SAP software to run the business but determined it was too expensive and could take too long to deploy.

Winholt and other former P&G executives who had moved to Sunny Delight, including president William Cyr, had been involved in the SAP rollout at P&G and were also doubtful it could be installed in time. SAP media relations did not return a phone call seeking comment about the Sunny Delight project.

OneNeck selected Microsoft's Axapta enterprise resource planning software. Vermillion says a major factor in Axapta's favor was its multi-currency and multi-lingual capabilities. Sunny Delight receives more than a quarter of its revenues from Europe and operates production facilities in Germany and Spain. "We needed something that could tie in those operations immediately," Vermillion says.

Axapta is used primarily by midsize companies but has been adding firms with more than $500 million in revenue as customers. The Picanol Group, a Belgium-based manufacturer of textile-weaving machinery with about $700 million in revenue, is among its larger customers.

OneNeck also proposed hosting and managing the software from its Phoenix facility, an arrangement that appealed to Winholt. "It takes a couple of things off the table that we don't need to worry about," he says. "We have a relationship where we've agreed on the costs and on a high level of support and delivery. We can concentrate on the business."

The OneNeck deal set the tone for Sunny Delight's other technology decisions. The company signed outsourcing deals for every major component of its operations, from customer order-taking to shipping and billing to trade promotions. After the P&G agreement ends, Winholt plans on running the company's technology operations with just five or six full-time staff—one employee for every $100 million in revenue.

"At some point down the road, we may look at bringing some of the operations in-house," Winholt adds. "Outsourcing may cost us more, but it's the only practical route. We don't have the time or expertise to do it on our own."

Axapta forms the core of the new infrastructure, handling financials, general ledger, accounts payable, accounts receivable and payroll. Cincinnati-based Triplefin was selected in the fall to process customer orders and coordinate invoices and billings. Triplefin will take orders from Sunny Delight customers such as supermarket chains Kroger and Albertsons through electronic data interchange, a business-to-business Web site, or phone or fax, and pass those transactions directly to Axapta. (Triplefin will also provide phone support to consumers.) Axapta, in turn, will hand off requirements to a production planning and forecasting module from Prescient of West Chester, Pa., which then will create work orders for Sunny Delight's production plants.

A software package from RedPrairie of Waukesha, Wis., will manage inventory, keeping track of raw materials from the time they come in through the doors until they head back out as finished juice drinks. Axapta will also distribute shipping orders to Transplace, a Plano, Texas, company that operates an auction on its Web site. Transplace pays the carriers and sends an invoice back to Axapta.

A package from VeriSync Trade Solutions of Cincinnati, called TradeLync, will manage promotions such as vendor rebates for meeting sales targets. TradeLync will also be integrated into Axapta.

"What we're building here is not simple—it's a web," says Ellen Iobst, senior vice president of global manufacturing and technology, another P&G alumnus. "We had to make sure we chose the right partners because we can't afford to have any one piece break down."

Contributing Editor
Mel Duvall is a veteran business and technology journalist, having written for a variety of daily newspapers and magazines for 17 years. Most recently he was the Business Commerce Editor for Interactive Week, and previously served as a senior business writer for The Financial Post.


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