By Tom Steinert-Threlkeld  |  Posted 2006-01-20 Print this article Print

More than five years ago, the world's largest food maker set out to standardize how it operates around the world. GLOBE, or the Global Business Excellence program, is aimed at getting far-flung operations to use a single system to predict demand, purchase

: Fix it as You Go; Goal: Customer Can't Feel the Pain">
Brabeck took the committee out of that analytical abyss in short order. His criterion: The customer should feel no pain. After you turn the system on in a given market, it should work. You should be able to take orders, produce products, ship them, generate invoices and collect money. Without anyone who is buying food from you noticing the changeover.

Lopez wasn't so sure he could live up to that benchmark, as one of the first three test markets.

To stay on track, the first three markets would be in the middle of a systems storm. First, they would be implementing the first version of the GLOBE template for mySAP planning systems. Any bugs or unexpected outcomes would have to be resolved, in progress of deployment.

Second, they would have to implement processes that were being developed at the same time the systems were being put in place. There was not enough time to nail down the processes first. They would be developed in parallel.

Because of that, the third disadvantage would be a lack of training for workers and managers in each of those first pilot markets. They'd have to learn on the job-and hope customers wouldn't notice.

"It was almost like teaching somebody how to fly a plane, and just showing them a presentation and not even letting them get into a simulator," Johnson recalls.

The hardest part: Getting managers and workers to understand that their jobs would change, in practical ways. In many instances, workers would be entering data on raw materials as they came into or through a factory. Keeping track of that would be a new responsibility. Doing it on a computer would be a wholly new experience. And figuring out what was happening on the screen could be a challenge. Minutiae? Maybe. Considerable change? Definitely.

"The biggest challenge is in the mind,'' says Martial Rolland, chairman and managing director of Nestlé India. "Yes, it's an equipment change. But, ultimately, it's a mind change.''

But the templates got installed and business went on, in Switzerland, Malaysia/Singapore and the Andean region. Those first three rollouts stayed out of the newspapers, one of the GLOBE team's informal goals. Only if things went wrong, Johnson figured, would it make print, in any given market.

In each successive rollout, the managers of a given market would have nine months or more to document their processes and methodically adjust them to the templated practices. In 2003, Thailand, Indonesia and Poland would go live. In 2004, Canada, the Philippines and the Purina pet food business in the United Kingdom.

But, by then, the system was bumping up against some technical limits. In particular, the mySAP system was not built for the unusual circumstances of the Canadian food retailing market. Food manufacturers have lots of local and regional grocery chains to sell to, and promotional campaigns are rife. MySAP was not built to track the huge amount of trade promotions engaged in by Nestlé's Canadian market managers. Too many customers, too many products, too many data points.

For instance, in Malaysia, the SAP software was set up to collect sales and procurement data at the product level, say, Crunch Bars and Nescafé canisters, according to IBM's Hafner. In Canada, managers wanted to keep data at the stock-keeping unit (SKU) level-maintaining extensive records on every flavor and size of every product. Trying to report sales figures every morning at the SKU level would swamp the SAP software.

Nestlé and SAP had to come up with a "multiple angles approach'' to solve this unexpected hitch, says Emiel Van Schaik, a SAP vice president and head of the company's consumer products and life sciences unit. The storage of data would have to be separated, according to the market from which it came. Canada's trade promotion information might be allotted 50 gigabytes, and Brazil's 5; and the data kept apart.

Story Guide:

Nestlé Cooks Up A Global Supply Chain

  • One Supply Chain, 127,000 Products
  • Signed: Global Project Manager; Undefined: The Project
  • Project Plan: Finalized; Schedule: Not So Much
  • Drafting a Project Team of Business-Unit All-Stars
  • Standardizing IT: No So Tough; Standardizing Managers: Not So Easy
  • Project Costs: Capped; Project Schedule: Changed Again
  • Rollout: Fix it as You Go; Goal: Customer Can't Feel the Pain
  • SAP Project: Global; Computing Resources: Limited
  • Nestlé By the Numbers
    Player Roster: Who's Who Among Nestlé Project Planners
    Roadblock: Regional Managers
    Hurdles Overcome: Deploying a Common Global System
    Base Technologies: Nestlé
    SAP: Not Pretty, But It Did the Job

    Next page: SAP Project: Global; Computing Resources: Limited

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    Tom was editor-in-chief of Interactive Week, from 1995 to 2000, leading a team that created the Internet industry's first newspaper and won numerous awards for the publication. He also has been an award-winning technology journalist for the Dallas Morning News and Fort Worth Star-Telegram. He is a graduate of the Harvard Business School and the University of Missouri School of Journalism.

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