INFORMATION TECHNOLOGY & MANAGEMENT

INFORMATION SYSTEM [ITMIS]

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Table of ContentsIntroduction:...............................................................................................................................................3

The situation:...............................................................................................................................................3

The requirements that needed to be addressed.........................................................................................4

Analysis and Evaluation of the Issues Involved..........................................................................................5

The solution.................................................................................................................................................7

Heinz and their Pragmatic Deployment Approach......................................................................................9

Conclusion:..................................................................................................................................................9

REFERNCES:...............................................................................................................................................11

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Introduction:

The company Heinz was founded by Henry John Heinz in the year 1869 and since its inception, the

company has been successful in growing continuously at a steady pace and today, Heinz happens to be a

-one and premier international food company, with number number-two brands in more than 50

countries. Business operations over the years have undergone significant changes and have evolved by

leaps and bounds with the rise of the information communication technologies popularly known as ICT

(Adomavicius et al.2005). Although as it is very apparent from this case study that Heinz has been

successfully conducting their business for many years and has been extremely stable but they too

cannot ignore the tides of changes that are swelling and changing the very core of business operations .

To move forward they too need to embrace the gifts of modern technology and communication,

especially management information systems or MIS without which the functioning of business and

sustainability of the same becomes extremely tedious. By the year 2000, the key leaders of Heinz

realized the challenges that were lined up for them .These are the reasons why management

information systems are sought by companies (Lee, 2013).

The situation:

Till 1995 Heinz followed a quite traditional approach in managing their products, formulas and quality information like the majority of the other global companies.. But this was something that was commonly followed and yet far astray from what the best practice possible in the scenario was. In most companies the product information was stored within different systems, spread sheets, both text documents and paper forms .This variety of sources led to inconsistency of information which made it extremely difficult for a company like Heinz to have an instant view or knowledge about their products from raw materials for the concerned department Like most companies, let alone the idea of sharing this information across the various different departments within the organizations (Allenby et al.1999). In the face of this challenge of management of the documents, ensuring the same quality of goods globally ,the quality assurance and technical affairs team decide on trying out some different tactics.. This finally gave way to their project “VIPER”.

Understanding the scenario the company has realized the need to act and aggressively try to address

the new changing scenario by trying to work on a new culture and process and build a much needed

competitive edge, which will give the company a much needed futuristic edge. Implementation and use

of information technology today is an absolutely indispensable tool without which the progress of any

business will be badly hampered. The major challenges that were identified pertaining to development

in the new business age In Heinz were things like Tacking of various product specifications, Increased

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global communications regarding product And supplier information etc. It has been stated in the Heinz

2003 annual report, that Heinz has launched a global computerized platform by the name of VIPER or

Vendor Improvement and product enhancement and Research, which has facilitated in simplification of

myriad product specifications(Ansari et al.2003). The worldwide SKU of Heinz was also found to

reduced by nearly 30% in the fiscal year of 2003 together with an additional reduction of 10% within the

fiscal year 2005.The VIPER project of Heinz is achieving the strategic values of the business that were

set by bringing together new processes and technology to give way to much more innovative and

productive ways of working. The basic plan that Heinz concentrated on was to simplify operations by

enhancing coordination, communication and viability within their company and their supply chain

management by collaborating various MIS software’s like Product lifecycle management (PLM),

collaborative product commerce (CPC), product data Management (PDM) etc. This actually helped Heinz

accomplish what very few others within the industry had been successful in achieving; continual

leverage of product information throughout the course of its entire lifecycle. Some of the main

initiatives that Heinz took are:

• Simplification in raw materials management and also simplifying the product portfolio.

• Decreasing the proliferation of new materials and sourcing relationships

• Utilizing the best practices of different business units

• Streamlining the way Heinz brings ,introduces and markets new products to market

The requirements that needed to be addressed

The PLM concepts, which were previously found to be appearing within the annual reports of

automotive industries and electronics, are now found to be gaining in increased importance in the

consumer goods and foods and industries sector.

When the VIPER team set to work, they immediately understood that the task entrusted was in no way a

trivial one especially since Heinz was traditionally not organized enough to conduct their affairs on a

global basis. .Even with a company where global infrastructure was in place the task would had been

immensely challenging.

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Management Information System is in reality a very complex system that cannot be developed

overnight ,rather it needs to be implemented and developed within the organization itself .For this

taking the help of expert opinions and allowing information technology people to stay, access the

company’s supply chain and operations .It is imperative to allow all the data from different departments

to be collected over a period of time. These data would be stored within the system if necessary so that

these records may be accessed at a future date. The challenge also lies in segregation of the data that is

ultimately useful. Very old data that has been stored will not prove to be of any use from the

organizational or business point of view. Then again, to make the maximum use of the management

information system it is extremely important that the organization train the workforce i.e the employees

so that they can make adequate use of the system. Considering the trend that has evolved nowadays

the company can also make adequate use of the social media for understanding the consumer

perception and from there they can work on various aspects pertaining to customer relationship

management. The way forward in today’s business is to integrate communication technology and make

maximum use of the technology to yield the best results possible. Options like intranet and employee

discussion forums are becoming increasingly popular among the different organizations and the same

can be put to use by an organization like Heinz. Beinbasta et al (2010) was of the opinion that cloud

computing will be the next big thing that the organizations will go for. More the data within the

company system the more important becomes the security issues, which the company should take care

of. If the advanced systems are accessed by competitors then all the different strategies and plans of the

company may be accessed by the rivals, which may lead to sustainable losses.

Analysis and Evaluation of the Issues Involved

The VIPER team also understood that the differences in languages will always be a problem if the global

scenario is taken into consideration and if this system needed to be implemented on a global

basis .Moreover the idea was also to develop such a system for Heinz that would allow it to develop a

common set of processes and tools which would help in addressing the various different needs of all the

various verticals and subsidiaries that Heinz had distributed across the different geographies and

cultures of the globe. Thus the MIS would have to be a global solution that would be capable enough

would have to recognize the differences in language, culture political environment , and ways-of-

working. Local needs if not prioritized and given its due importance then the project would definitely

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fail. This crucial factor was recognized by the organization. Another challenge that food companies often

face is the fact that the recipes of the same products tend to have its local variances, which have to be

made to cater to the local consumers in different corners of the world. Like the Heinz ketchup, which

undoubtedly is the best and most popular ketch up in the world, has to vary its sweetness, the tart

flavor notes in order to satisfy the preferences of the local consumers (Stephenson and Sage,2007). For

instance the Heinz Ketchup which is extremely popular in UK will not be perhaps liked by South Asian

countries since they like their ketchup to be a little more hot. Thus, the solution lay in the fact that the

system had to recognize the differences in taste presences in the various localities and the

manufacturing recipes for the plant is altered accordinglyBeyond localization and recipe management,

the Management information systems solution had to consider quite a few other requirements such as

• Robust enablement of the workflow process and templating of the different specifications on a global

basis

• Tight integration, coordination together with cooperation with a global vendor management system

was absolutely infallible and was extremely important to go into an agreement with the global vendor

management system.

• Supplier collaboration was also a necessity for product as well as material design, packaging and

delivery to the retail outlets.

• Product design optimization tools that would be most cost effective and will also pay attention to

consumer preferences

• A label management system that is extremely comprehensive in its set up so that the confusion for

having so many types of different products can be averted with ease.

The team was successful in chalking out these key points in the foods and beverage industries modus

operandi. The solutions those were readily available in the market already had a built in environment

which was hardly customizable and for Heinz it had to adjust for items of food those were mainly based

in accordance with the variable nature of raw materials that are produced by “Mother

Nature”( Seetharaman,2004). Moreover, the system had to incorporate for the changes for the new

product development process, which would also have to the various formulas, packaging and suppliers

in one process. Thus it dawned upon the team of Heinz that the technical consideration for which they

had to design their system was unique in their case .Moreover like many companies Heinz to worked

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with a large number of packers who too needed to access some of their information. But then again

considering the proprietary nature of the formulas they too needed to be controlled. Thus, Heinz faced

a very delectable dilemma. On one hand, they needed unlimited information to be shared across all

departments and verticals to be readily available over the internet and the intranet on the other hand

the trademark formulas and proprietary formulas which formed the very core of the company was set to

be compromised. The Heinz top management was very particular about the cat that nobody outside the

company anyway gets access to the ketch up formula.

.The juxtaposition of these seemingly conflicting requirements had only one possible solution .They

would have to integrate a very robust and tight security model within this system that would allow

selected individuals ready access to the information they looked for while ensuring the fact that

everyone could only get access to the information that were not deemed classified by the top

management .The frequency with which mergers and acquisitions happened across the industry made

this an inevitable truth and cost that had to be incurred by the Heinz management to stay on track to

competitive sustainability (Trott and Hoechett,2004).

The solution

Experience and examples support the fact that when business change is to be adopted it is more

sustainable and wise to do so when accompanied with the necessary software technology and

infrastructure. Heinz thus had reviewed numerous software solutions of varying kinds and most of these

solution providers were failing to understand the unique needs of the consumer goods, foods and

beverage industries. Moreover the software solutions were not built with the capability or5 the

flexibility to handle the load of the varying requirements across geographies with different languages

and cultural requirements of a global giant such as Heinz. Heinz thus was looking for such a software

partner who would be able to understand their business well and would cater to their dynamic

requirements. Past experience of the management of Heinz knew that such kind of a similar system was

delivered by a Company called Prodika for Tricon. Heinz thus scrutinized and evaluated in detail the

solution from Prodika and understood that it could actually deliver the kind of unique needs that they

have, and chose Prodika to be their technology partner for VIPER and went ahead with the Prodika PLM

solution.

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The chairman and CEO of Heinz Mr William R Johnson opined about this partnership stating “We are

using Prodika globally to help design new business processes and communicate information more

effectively. Prodika is a critical component of our strategy to improve our management systems and

ways of working.”

The Prodika solution:

Heinz took its VIPER initiate to its full swing taking the advantage of the Prodika solution on their side.

They started customizing on each component to meet the specific requirements that Heinz has and also

working with Prodika to develop entirely new features which would help Heinz deliver the system on a

global front in different languages. Some of the key features of this system include.

GSM or Global Specifications Management, which includes the entire array of products from its

ketchups and other trade items to packaging in all the different languages, currencies and the

cultures.

SCRM or supply chain relationship management with a customized feature called vendor

master, for the vendors especially, together with a vendor list and vendor score carding.

PQS or product quality scorecard for the management of performance of the product and

compliances data, equivalent to product grievances.

LMP or Labeling, Marketing and Packaging management, which would assist in designing,

developing and approving of new packaging designs.

DWB or design workbench that actually helps to design, optimization and value engineering of

the company patented formulations.

CSS or Content synchronization and Syndication which facilitates in data synchronization of all

the information pertaining to trade items for the business partners as well as the data pools.

Heinz and their Pragmatic Deployment Approach

Heinz understood the kind of challenges that lay across them and started to closely induce this change

of system within their organization. The new technology would not aid the organization unless they

brought about a change in the way they handled their business. They started to go about this in small

phases. The GSM or Global specification management was the first thing that the company worked

upon. The initiative required all their different products and ingredients, including packaging to be

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recorded and tracked via the Viper system of management .This was now made visible to all the various

interested parties such as the manufacturing plants, the logistics and inventory team, etc. This was

followed by the label management part or LMP across the countries in Europe (Laudon and

Laudon,2003). This approach started to gain in popularity and in momentum as the partners and

affiliates who were not a part of the first phase of initiatives started requesting and falling in line ,which

created a ‘pull’ for the MIS solution as opposed to push. Owing to the significance of this change to the

organization and the very autonomous nature that the affiliates had the VIPER team, ensured strong

executive sponsorship remained visible throughout the duration of the project.

Conclusion:

Heinz have already achieved significant benefits from the VIPER system .The viper system helped them

to reap significant benefits in the form of information management, better communications and

integration across boundaries. The benefits have been found to be immensely due to the results of

improved specification management. The information flow has facilitated the company to bring their

products in the market faster, better because the affiliates and suppliers can readily supply the materials

faster due to improved state of communication. Since time is money in business the company can now

reduce the costs in a dual way. One in the form of increased productivity and the other in the form of

decreased cost of production for the same units of materials produced thus bringing the unit cost down.

Heinz with the help of this system had called upon on about 40 of their vendors in order to determine if

the same vendor attempted to sale the same products to different Heinz companies under the shadow

of different item numbers. From this very exercise Heinze had found that From these 140 items which

were sold to different Heinze units under different SKU’s. Since the company has to handle multiple

specifications for the very same item, it leads to escalation of the inventory costs . For example, Heinz

Europe through the VIPER system had tracked that they had 30 specifications for unflavored salt which

was escalating their operational costs which therefore have now been reduced to 10. Costs savings was

also possible due to development of better and more optimal formulas as a result of the development of

the system. Heinze now can successfully use the VIPER system to adjust the recipes of the products so

that they would not impact on the cost factor in anyway but still increase the nutritional food value. The

nutritional information on the label will also impact on the customer mind and would help generate

more satisfied customers.

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REFERNCES:

Adomavicius,G., R. Sankaranarayanan, S. Sen and A. Tuzhilin (2005), “Incorporating Contextual

Information in Recommender Systems Using a Multidimensional Approach,”ACM Transactions on

Information Systems, 23(1), 103- 144.

Allenby, G.M., N. Arora and J.L. Ginter (1998), “On the Heterogeneity of Demand”, Journal of

Marketing Research (August 1998), 35(3), 384-389.

Ansari, Asim M. and Carl Mela (2003), “E-Customization”, Journal of Marketing Research, 40(2), 2003,

131–46.

Besanko,D., S. Gupta and D. Jain (1998), “Logit Demand Estimation Under Competitive PricingBehavior:

An Equilibrium Framework,” Management Science (November), 1533-47.

Besanko, D., J.P. Dube and S. Gupta (2003), “Competitive Price Discrimination Strategies in a Vertical

Channel using Aggregate Retail Data,” Management Science (September),

Seetharaman, P.B., (2004), "Modeling Multiple Sources of State Dependence in Random UtilityModels: A

Distributed Lag Approach." Marketing Science, 23 (2), 263-271.

Bretschneider, S. (1990) Management information systems in public and private organizations: an empirical test. Public Administration Review, 50 (5), 536–545.

Benbasat, I., D. K. Goldstein and M. Mead (1997). “The Case Research Strategy in Studies of information Systems.” MIS Quarterly 11 (3): 369 - 386. Sage: London

Lee, R. (2013). Computer and information science. Cham: Springer.

Sharif, A. M., Irani, Z. and Lloyd, D. (2007), ‘Information Technology and Performance Management for

Build-To-Order Supply Chain’, International Journal of Operations and Production Management, 27(11):

1235-1253

Stephenson, S. V. and Sage, A. P. (2007), ‘Architecting for Enterprise Resource Planning’, Information

Knowledge Systems Management 6 (2007): 81-121

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Trott, P. and Hoecht, A. (2004), ‘Enterprise Resource Planning and the Price of Efficiency’, Technology

Analysis and Strategic Management, (September 2004) 16(3): 3367-379

Laudon, K. C. and Laudon, J. P. (2002), ‘Management Information Systems: Managing the Digital Firm’,

(7th ed.), Prentice-Hall, USA.

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