The proof of a software package lies in the performance, not the sales presentation. So Prescient Systems Inc. might have been a bit nervous when Chivers Ireland Ltd. put its forecasting and planning tools to the test.
Chivers was nervous, too. The top maker of preserves in Ireland was the first within its native country to try the Prescient software. And the vendor was relatively small at the time, says David Brady, information technology manager of the Dublin-based company.
Chivers had been shopping for software that could handle both supply forecasting and demand planning, although it decided to implement forecasting first. That led it to U.K.-based Proasis, which was subsequently acquired by Prescient. For the trial, Chivers provided the vendor with historical data on products with varying patterns of seasonality. Then it compared the conclusions with actual sales. The result: The forecasting software was about 96-percent accurate. "We knew we had a winner," says Brady.
From the start, the company had some very specific requirements. It needed a tool that could handle its manufactured line of sauces, jams and marmalades, as well as its import and distribution business. Chivers expects the latter area, covering such products as canned fruits and vegetables, to account for most of its future growth, says Chris Taunton, manager of product strategy with Prescient.
Chivers sells to a variety of entities, including big retail chains, small shops and hotels. Its old system was seriously deficient, says Brady. Forecasts couldn't account for differences among customers. Saddled with an unreliable plan, the company would stock up on finished goods inventory, weighing down its balance sheet. It was holding up to 12 weeks of supply on its manufactured line, and 10 weeks of imported goods for distribution. Even then, Chivers didn't know exactly what to keep on hand, so it suffered through shortages as well as excesses.
Brady wanted to place the new system on an Intel platform, not the AS/400 server that formed the basis of its transactional systems. He also wanted the new tool to be easy to use, and not dependent on one or two internal systems experts. "We didn't want to build up to a level whereby we would be worried if they left the company," he says. That meant searching for a system employing a standard graphical user interface (GUI), such as the icon-based environment of Windows.
Implementation of the forecasting tool went "exceptionally well," says Brady. The new system could distinguish regular demand from promotional activity, as well as account for seasonal peaks and valleys in everyday sales. To give Proasis more of a challenge, Chivers hadn't stripped out such anomalies from the raw data it provided to the vendor for the trial run.
Chivers also asked for a test of the demand-planning package, a specialty of Prescient. The vendor conducted a three-day feasibility study to prove that the customer's internal staff could easily work with the application. Chivers ended up training a data-entry clerk to operate the forecasting software, after just four days of training.
Internal issues kept Chivers from using the planning module for manufactured product right away. Instead, it applied the tool to the import side, training the same individual who had become an overnight forecasting expert. On that piece alone, says Brady, the company paid for the whole planning project within a year and a quarter. The application eventually was extended to manufacturing as well.
Brady says Chivers had expected a three-year payback of its installed cost. It got it in two years - 10 times over. Inventories fell by 10 percent, with savings of several hundred thousand dollars. As a result, it cleared space in the warehouse for growth in its distributed product line. Other benefits included better visibility and decision support, and a rise in customer-service levels of 1/2 to 1 percent.
Brady has found additional creative uses for the planning system. He is deploying it for inbound raw materials, using the data from manufacturing planning to figure the correct levels for jars, lids and other items.
Jane Hoffer, president and chief executive officer of Prescient, says the vendor has other applications that could be of use to Chivers. They include a collaboration tool, allowing trading partners to agree on one number for sales and operations planning, and another for measuring and categorizing product volumes. Prescient is also building out applications for transportation planning, web-based reporting, and event management.
Brady is confident that Prescient can handle Chivers's projected growth and additional needs. "This is a business partnership, not a typical customer-supplier relationship," he says. "We need someone for the long term who understands the way we operate.
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