As a prime example of this trend, La Farge, Wis.-based Organic Valley Family of Farms is using business intelligence (BI) and information management (IM) systems from SAP AG to integrate sales and financial data from non-SAP applications and sources, analyze the information and optimize its operations to better meet the ever-changing supply and demand requirements of a business built on premium, highly perishable products.
With open software from the SAP BusinessObjects portfolio, the cooperative farming organization has been able to reduce supply overages on perishable goods by 25%, quickly identify and discontinue underperforming stock-keeping units (SKUs) and adjust its promotions for greater impact, according to SAP.
With 1,400 farmer members in the United States and Canada, Organic Valley is the country's largest organic farmer cooperative. It oversees the organic food production of its member farms, supporting them in the business of sustainable agriculture and farm diversity, and is most well-known for dairy and egg products.
With margins commonly as thin as 2% in the agriculture industry and growth in the cooperative reaching 30% annually, Organic Valley needed a more sophisticated way to manage and consolidate its data, ensure the data was trustworthy and then report and analyze the information. Previously the company made do with spreadsheets to manage these processes, which was both time-consuming and error-prone.
The company reviewed the products of several different vendors and selected SAP BusinessObjects BI and IM systems for the reporting, analysis and visualization functionality they offered, and their ability to support and integrate with Organic Valley's non-SAP transactional systems, according to SAP.
"Our legacy reporting mechanisms were no longer adequate, and the need for a new solution became more and more apparent to us," said George Neill, director of IT, Organic Valley Family of Farms. "Our CEO was going into board meetings with different figures from sales and finance, which was obviously very problematic for us. We needed to build a single, trustworthy repository for all our business data, and standardize our reporting on that. SAP BusinessObjects solutions have given us better access to consistent data for sales and expense reports, and users with varying technical skill levels have all benefited from the ease-of-use. Now we have one unified view of our financial and operational performance, and can make confident decisions based on accurate, consistent information."
Organic Valley relied on SAP BusinessObjects Data Integrator software, which helps enable a complete, consolidated view into corporate information by merging data from the multiple sources, according to SAP. For Organic Valley, within one week of training, 60% of the framework for a major system integration had been built -- saving the organization approximately six weeks of development and freeing up precious IT resources. With the IM framework in place, the company has been able to improve the timeliness and quality of data required to optimize its national supply chain.
A Tighter Supply Chain
Perhaps most importantly, with reliable reporting Organic Valley has improved the satisfaction of both its end customers and cooperative members. The organization has been able to better track perishable products such as milk to help ensure they move from farms to processing plants as quickly as possible. Better forecasting has helped reduce average time in inventory by two days. In addition to internal use of reporting solutions, farmers soon will have easy access to beneficial data through an online portal.
SAP BusinessObjects BI and IM systems bring accurate, timely data to Organic Valley users, for projects such as ongoing marketing studies that focus on promotion effectiveness and buying trends for each product, according to SAP. Based on this insight, Organic Valley can determine and discontinue its weaker product lines and create strategies to bolster its bestsellers. Tracking analytics on freight costs and other key performance indicators (KPIs) also contribute to proactive supply chain strategies.
"Incorporating these SAP solutions has enabled Organic Valley to clearly see important operational information, which has helped it increase profitability and grow the business," according to SAP. "Organic Valley accomplished all of this while relying less on its IT resources -- technical staff now spends 90% less time on BI initiatives."
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