The company claims that the purpose of the installation is to improve customer and distributor performance within what is a highly fragmented organisation. New Zealand Milk, the consumer business of Fonterra Co-operative Group, says that this organisational structure is the result of its recognition that each individual market has its own specific needs and characteristics.
To better serve customers and distributors, New Zealand Milk, which employs more than 12,300 people in over 30 operating companies worldwide, felt that it required a flexible and scalable system to streamline customer and distributor management throughout its operating companies.
This is a symptom of an industry-wide move towards greater corporate integration through technology. Indeed, a leading consultancy recently argued that if companies install cross-functional planning across their operations, they can make savings of 30 per cent on procurement operations and achieve 60 per cent higher return on investment (ROI) than typical companies.
The research, carried out by The Hackett Group, highlighted several key areas where companies can improve their procurement processes. At most world-class companies, says the group, procurement is formally involved in cross-business planning and budgeting.
New Zealand Milk evaluated major CRM vendors based on functionality, integration capabilities, scalability, as well as the ability to provide flexible deployment, services and purchasing options, and settled on http://www.pivotal.com/ Pivotal, a software unit of chinadotcom.
"We are thrilled that New Zealand Milk, a world leading dairy company, has selected Pivotal as its global CRM standard," said Helen Robinson Pivotal Australia and New Zealand vice president.
"New Zealand Milk is committed to delivering products and service to meet their customers' needs, wherever they are in the world. The company's decision to embark on an enterprise-wide CRM initiative is a testament to its commitment to continue to deliver extraordinary customer intimacy."
The move towards greater corporate integration reflects manufacturer's needs to achieve greater efficiency throughout the supply chain. Global companies such as Tyson, the world's largest meat processor, have a huge task of coordinating every aspect of their international business, and, like New Zealand Milk, have increasingly turned to IT solutions.
Traceability legislation has also been a significant driver. The recent US Bioterrorism Act and forthcoming EU legislation on traceability have added to the pressure on manufacturers to get their house in order and be able to trace products right through the chain. Industry experts believe that over the next few years, manufacturers will have achieved significantly tighter control over their processing and packaging operations.
Ultimately, it is in the manufacturer's long-term interest to invest in a system that can trace and organise operations from start to finish. The cost of compensation or a product recall means that the cost of installing a technology platform is less of a factor than it ever was.