Berri: There's juice in Dell's cup

This has resulted in a 30 percent reduction in inventory and $5 million in annual savings, the company's CIO Ross Bradley said.

According to Bradley, when the company began the process in 2000, inefficiency and waste were major issues for Berri. It was suffering a high level of raw material write-off, variance in transport prices, and needing to pay its staff overtime wages, he recalled.

It was at that point that Berri decided to implement world-class supply chain management techniques. Key to this, Bradley said, was realising the supply chain needed to be brought as close as possible to the end customer.

In Berri's case, three of its major customers had already started ambitious projects to integrate their IT systems with those of their suppliers, namely, Woolworths (Project Mercury), Coles Myer (Project Refresh) and Metcash (Project Collaborative).

"The challenge is to synchronise commerce with Woolworths and company," Bradley told participants at a recent Gartner conference in Sydney.

Berri engaged the acknowledged master of supply chain management to help out -- PC maker Dell. The computer company maintains no inventory or raw materials and outputs products according to customer demand, said Bradley.

Stage one of the transition involved the implementation of an enterprise resource planning system based on software provided by Oracle and its now-subsidiary JD Edwards.

"JD OneWorld is a couple of releases old ... we're currently in the process of upgrading to JD Edwards EnterpriseOne, which is the latest release. We're part of an early success program with Oracle to get that up and running, and our plan is currently to have that in place by September.

"We're currently in the testing phase, we've just started end-user testing of the new development environment," Bradley said.

In addition, Berri's utilises Adobe software to allow inventory tracking with barcodes printed by laser printer.

The ERP system calculates the freight bill automatically and makes payment to Berri's two freight partners -- all without user intervention. This has resulted in a situation where invoices aren't generated, Bradley said.

Berri was also utilising business intelligence software in the form of a SQL-based data warehouse to generate analysis cubes.

According to Bradley, 40 account managers across the company were already using forecasting software to predict demand levels for its products and spikes caused by promotions.

One of the key performance indicators for those managers, he said, was how well they could accurately forecast demand using the software.

Such forecasting had also allowed Berri to re-configure its factories -- of which there are five in Australia and one in Indonesia -- for optimal performance.

"We reschedule our factories on a daily basis," said Bradley. The software "understands holidays, downtime" and other factors.

"We changed from a system of spreadsheets and blackboards," he said.

As for the next stage, Bradley hopes demand for Berri products can be driven by signals passed from supermarket checkouts directly into the company's system.

This, he said, would allow Berri to see how promotional offers were impacting demand as they went live in stores.

Bradley also highlighted his interest in radio frequency identification tags. During a recent trip to Europe, the CIO was fascinated by the offerings of some vendors which saw re-writeable tags placed on stock pallets for tracking.

This, he said, had the potential to solve what he saw as Australia's massive pallet problem.