By Tom McDonough, Sr. Director Oracle Supply Chain Planning Cloud
Lidestri Food and Drink of Rochester, NY, has been in the business of manufacturing some of your favorite brand foods and beverages for over 40 years. Every day, Lidestri estimates, 20 Million consumers use their products, such as Wegmans branded dips, Newmans Own pasta sauces, and Bai antioxidant infusion drinks. The company’s motto, “Where Tradition Meets Innovation” is unilaterally applied to its approach to customers and the methods they employ to run their business.
Feature rich and lower costs of operation
Lidestri and Oracle have had a long-running partnership and most recently, Lidestri worked to move their legacy Excel Spreadsheet planning and processes to the Oracle Demand Management Cloud.
John Matrachisia, company CIO, and his peers in Operations felt strongly that moving to Cloud-based systems supported many of their top supply chain strategies for the company:
2) manage expenses
3) maintain existing high customer service
The team felt that starting with Demand Planning was the best first step as the data and process are less day to day mission critical.
“Now, as we do our annual operating planning, we start with our demand forecast, and we build our annual operating plan based on that. We weren’t able to do that in the past”, according to John. Lidestri produces over 1,000 products on 24 production lines and must collaborate directly with growers (e.g. tomatoes, onions…) 12-18 months prior to production. More accurate forecasting with growers is having an impact.
A fast implementation and immediate results
“Our disposals were higher than we felt they should be for reasons like not having all the ingredients ready at the time of production or producing items with inputs that had gone past their shelf life and we’d have to throw these items out. All that adds up to a very costly impact on the business. We started using an Oracle System called Demand Management Cloud and we were able to leverage the intelligence built into the system – taking 2 year historical and statistical analysis to significantly improve our planning results.
The implementation and migration took Lidestri a little over three months and better yet, in the first year, the company was able to drive down inventory costs by over 10% and reduce disposals (food waste) by over $2M. For a company that receives up to 10 train car loads of tomatoes at one facility each day, this is a significant achievement.
Lidestri uses Oracle as the backbone for their supply chain and manufacturing processes. John likes that as he moves to Oracle Supply Chain Management in the cloud, he’ll have a single unified data model. “Being a food producer, we have to provide traceability from where that ingredient came in from the field, to when it came into our plant to what jar we put it in.”
Raising customers’ confidence
For years Lidestri accepted customer forecasts, manipulating them with some hunches. John says, “In the past we had a lot of gut reactions like we shouldn’t be producing this much; our customer is telling us we should produce a certain amount, but we didn’t have data to confirm or deny their projections. Now we have sit-downs with our customers with our own projections and after they saw the results, they adjusted and made changes based on our intelligence.”
For Lidestri, it always comes back to the customer. The operational improvements had no impact on already high order fulfillment. John sums it up this way, “Customer relationships at LiDestri are very important. So, we really look to collaborate, innovate with our customers. A majority of our production is for other people’s brands or private brands. It’s very important that they trust us, so they are giving us their brands, their livelihood, their very important trade secrets, their IP, and they trust us to produce products that are going to be delicious, that they’re going to be healthy.”.
“We’ve been in business for over 40 years, we’ve never had a product recall or any safety concerns with our food products or our beverages. So, it’s a big accomplishment, and I don’t think we could do that without strong systems to support that. Oracle is part of the larger Lidestri family”.