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Published on: 2/17/2002
Last Visited: 12/7/2004
Ray Shei, chief information officer for Kellogg, says these solutions will provide the company with the necessary tools to support ongoing business initiatives.
Kellogg,s selection of SAP follows the company,s March 2001 acquisition of the Keebler Foods Company, also a user of a SAP.Shei says the extensive knowledge he gleaned as the former CIO of Keebler made his decision to invest in SAP at Kellogg a bit easier. ,We started implementing SAP around 1994 so my Keebler background was very helpful as I moved into Kellogg,, says Shei. ,The difference now is that IT is not the only driving force.We do not have IT projects, we have business projects., Shei says the Kellogg IT department serves as a roving business partner, ready to dive in at any given moment to help support a myriad of projects.At Kellogg, IT might not lead every project, but it is the key enabler.
Currently, Project Atlas takes up a majority of Shei,s time, a massive undertaking that will replicate Kellogg,s North American ERP system on a global scale.Project Atlas teams are currently working in Europe and Latin America.Next in line is Australia and Southeast Asia.
Making It WorkNaturally, a project of this scope and size calls for large amounts of time, money, patience and people.Or does it?Once again, Shei,s Keebler background has created a mindset of what he calls ,The Perfect Fit,, which is essentially a lean, mean, IT machine. ,We have had an extremely long history, especially with the Keebler ERP implementation, of having an IT organization that was not large in size and we still structure our operations in this manner at Kellogg,, says Shei. ,We,re fit to the business.We have enough manpower to do projects, maintenance and move the ball forward., Shei admits that the large projects need an additional boost for which he will hire trusted consultants such as IBM.Typically, consultants stick around for the duration of the projects but are released on time and within budget. ,We don,t want a huge IT organization because at the end of the day, there won,t be anything for them to work on,, says Shei. ,By hiring consultants, it allows us to bring in expertise.,
For instance, Kellogg might want insight on how the APO module of SAP operates.Experts will be brought in, their knowledge is transferred to the applicable Kellogg IT personnel.Shei says companies can greatly shorten project implementation times by bringing in experts, a lesson learned while serving time at Sperry Univac.Shei was heavily involved with numerous implementations at Sperry and says the most successful ones happened with the early involvement of outside expertise. ,They provide a lot of different views because they have done work at a lot of different companies,, says Shei. ,If you can take the best of what you see and move that forward every time, you,re always going to make it better.Rather than rely completely on our IT staff, we,ll bring in consultants and we,ll transfer their experiences and knowledge base.,
Keeping Costs DownKellogg has come to rely on the expertise of IBM and SAP almost exclusively.However, Shei is quick to point out that consultants should never be used as a maintenance crutch.That is why Kellogg deploys a ,Best Fit for the Business,, an internal metric that gauges how heavy each maintenance load will be.
,When we had legacy systems, maintenance was at 60 percent,, says Shei. ,On our new platform, which naturally required a few modifications, we,re down to 20 percent to 30 percent.You don,t need a big staff to do that.,
Shei says it is important to have the optimal amount of staff to move the ball forward on any given IT project.
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As the project moves forward, Shei says the business input will fade and the Kellogg IT organization will work on the solution.Once Kellogg IT feels it has a solid product implemented, the end users are brought back in for final input.This strategy plays a major role in obtaining a high level of user acceptance. ,It,s huge because they own it,, says Shei. ,We are nothing more than an enabler, a tool to get their job done and that,s what IT is for, first and foremost.Kellogg doesn,t market IT, they market cereals and snacks and we,re here to service the business.,
The Big SisterShei has also made it his mission to ensure that all critical business applications will be supported exclusively by the Kellogg IT organization. ,We really don,t outsource anything.
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I am very fortunate to be the CIO of this organization., Shei says it is not uncommon, for instance, to have a manufacturing IT staff member lend a hand in order management. ,Every one of my direct reports help each other out,, says Shei.
Sometimes the workload will shift where one team will take on a heavier workload for a while.They,re accustomed to moving resources around on their own and the CIO has very little to do with that.,
The Value of OneThe worldwide use and acceptance of SAP is undeniable.Beyond the fact that it is a large entity with a lot of equity, Shei says SAP, if used to its full potential, is a fully integrated ERP system. ,At the end of the day it makes an organization be more disciplined to handle things,, says Shei. ,Every transaction has an off-setting transaction and you hope at the end of the day everything comes out to zero.
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When it comes to battling out-of-stocks, Shei says Kellogg tries to make sure the right product is available at the right time and at the right price.The backbone of making sure this transpires is a solid forecasting system.Kellogg is tapping SAP,s CRM solution to help address inventory and stock issues at retail.This solution spans Kellogg,s different product divisions, including morning foods, snacks division, frozen and natural.Each division is unique.Morning foods relies on a warehouse-delivery system, whereas snacks is powered by direct store delivery.Shei first considered a comprehensive CRM solution in late 2003 and realized that even though SAP,s CRM solution wasn,t as mature as other offerings, it still made perfect business sense to invest in the program. ,At any time, if there is an SAP solution that is an 85 percent fit, we will always use SAP,, says Shei. ,CRM from SAP was far below the 85 percent level.Still, they are moving along very quickly and we are very happy with the progress they have made.,
Beyond CRMBeyond investment in solid CRM technology, Shei says it is vital to get down to the sales force to learn what is taking place in the field.
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Even though Kellogg is currently involved in a very heavy implementation stage, Shei says his team still keeps a close watch on what is coming down the pike.
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Above all, Shei says high customer satisfaction is vital for current and future growth at Kellogg. ,You want that index to be as close to 100 percent as you can get it, because it hits the heart of the IT department,, says Shei. ,The IT department always needs to ensure that the data that the end users are seeing is accurate and true.
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