Yogurt Company is a leader in the yogurt and related healthy products marketplace in the U.S. has corporate headquarters in Danbury, Connecticut and has several production plants in different states in the U.S.A.Yogurt Company has grown rapidly and is looking toward improving its business by making its sales and ordering processes more efficient.
Identification of Major Information Systems Issues
· Inefficient communications and systems enterprise-wide
· Inefficient order process
· Inefficient reporting process between sales and corporate
· Accounting discrepancies between sales and headquarters
· Conservative nature of management and rapid growth of the company contribute to information systems inefficiencies
· Management wants to reduce headcount by implementing a more effective system
Analysis of Issues
The purpose of this analysis of issues is to provide an in-depth look at the major information systems issues and to provide ways in which Healthlite can resolve the problems identified above. The Organization Overview, Major Business Processes, and Analysis of Problems explain the inefficiencies in the systems. The Management Plan, Major Business Process Changes, Major New Technology Components, Steps to Handle Conversion, Quality Assurance Measures, and Organizational Impact sections address the ways to resolve these inefficiencies.
In the following paragraphs, the overview of the Healthlite Yogurt Company will be discussed according to the listed categories: organizational structure, products, and major business processes.
· Healthlite has corporate headquarters in Danbury, Connecticut and several production plants in New Jersey, Massachusetts, Tennessee, Illinois, Colorado, Washington, and California.
· At the corporate headquarters, Healthlite has a central mainframe computer system to maintain most of the major business processes. In each production plant, a minicomputer system connects to the mainframe and receives customer orders and related information from headquarters.
· Healthlite has experienced rapid growth for the past five years, and it also faces local competitors entering the market who offer faster delivery and lower price.
· Customer files are maintained at corporate headquarters, and credit verification is determined there as well. This information can be transferred to the minicomputers in the local production plants.
· Healthlite has 20 sales regions, each with approximately 30 sales representatives and a regional sales manager. Additionally, Healthlite has a 12-person marketing group at corporate headquarters.
· Salespeople can retrieve and view customer information in the regional office to get customer data. However, they must mail manual sales reports to the corporate headquarters.
· The core products of Healthlite are yogurt and health-related products. Yogurt has a very short shelf life, and it must be moved very quickly.
· Because Healthlite has a series of yogurt-based products, such as frozen desserts and low-fat salad dressing, it needs to adjust its share of shelf space in the grocery store to have more shelf space to display its new products.
· Healthlite is also facing the pressures from local competitors, because local competitors are offering faster delivery from local production centers and are providing lower prices to capture the current market.
Major Business Processes
The current ordering process is described in the following:
· The current system requires sales representative to generate customer orders and write hard-copy tickets to place orders manually through the mail or by fax to headquarters. Each ticket lists the amount and kind of product ordered by the customer account. Often, orders are delayed when the fax machines break down.
· Approximately 20 workers at corporate headquarters receive the order information and then open, sort, and enter the order tickets from regional office. Those workers handle 500,000 order tickets per week.
· The complete ordering information is transmitted every evening from the mainframe in corporate headquarters to minicomputer at each of Healthlite’s processing sites.
· The processing center produces the amount and type of yogurt ordered and then ships the orders. The shipping managers at the processing centers assign the shipments to various transportation carriers to deliver the products to regional receiving warehouses.
· Each salesperson is able to store and to retrieve data for assigned customer accounts using the minicomputer system in the regional office.
· Salespeople need to produce individual reports, including printouts of orders, rejection notices, and customer account inquiries. These reports are printed at the regional offices and then mailed to the marketing group at corporate headquarters.
· The sales and marketing data are manually maintained in the regional office while the corporate headquarters only stores the consolidated enterprise-wide files for customer accounts, orders, and billing data in the mainframe system.
· Because sales and marketing data are maintained manually in the regional office, managers sometimes need to make telephone calls to subordinates and piece the information together to get the up-to-date data.
· The present results from the current sales process follow.
o Salespeople are choking on paper by manually completing two forms per customer order and sales reports. Because salespeople often have almost 80 customers, they delay the ordering process by having to complete so much paperwork delays.
o Because of the delays in processing customer orders, Healthlite spends between 4 and 14 days to process and ship an order, depending on mail delivery rates.
o Accounting discrepancies of $1.5M annually exist between the sales force and headquarters.
· The marketing group in the corporate headquarters needs sales and marketing information to do product planning, to make pricing decisions, to complete product advertising and promotional campaigns, and to forecast market potential for the new and existing products.
· Needed sales and marketing data, such as sales and advertising expenses, promotional campaigns, and customer shelf space devoted to Healthlite products, are maintained manually at the regional offices.