Kraft Foods is the world’s 2nd largest food company. With revenues in excess of $48B, they manage 11 brands which generate over $1B annually, and 70 brands which generate more than $100M annually from a global distribution in 160 countries. More than 25% of revenue comes from emerging markets, and leveraging their #1 positions in biscuits and confectionery, over 50% of global revenue is generated from snacks and confectionery brands such as Lu, Nabisco, Oreo, Cadbury, Milka and Trident.
Kraft Foods realized that they faced competitive challenges that required eliminating complexity throughout their organization. In addition to traditional plant closings and product rationalization, the company decided to consolidate on the SAP® ERP platform and is currently rolling out globally to go-live on ECC 6.0. Like all global projects, when the North American SAP project began the growing impact of master data definition, rationalization and migration was becoming apparent to the enterprise MDM team.
There are many teams responsible for different aspects of the project definition and subsequent rollout. At the same time, Kraft Foods’ restructuring initiative, “Organizing for Growth”, required substantial changes in corporate alignment and was aggressively cutting costs to remain in a leadership position in its key product and demographic markets.
All the careful data planning led us to be smarter about overall resource planning. Syniti brought solutions, methodology and experts to bridge a critical time in our SAP project and go-live to keep us moving forward and respond faster, better and more efficiently.”
At Kraft Foods, the enterprise master data group implementing SAP MDM and the SAP data group had not been closely linked in their efforts until six months prior to go-live. The teams came to realize that they had a master data issue and process for implementation that could not be sustained long-term.
“Resource projections were the main driver”, says Merri Beckfield, MDM Delivery Services Manager. “We had a lot of overlapping activities
between the plants getting ready to go live, and we knew that the SAP data had to be clean.” There were too few resources allocated to their
target process and it was clear that the current trajectory would continue to frustrate the team and begin to delay results. That was simply an unacceptable risk; a delay in a global organization the size of Kraft Foods could cost millions of dollars monthly in lost productivity.
- Quickly realized challenge of managing global, enterprise SAP data
- Needed method for managing data governance issues for migration and MDM teams without addition of substantial resource
- Reset and revisit the resource plan
- Data has to be clean on migration
- Delays would have substantial opportunity costs locally and globally
- Knowledge transfer to Kraft Foods resources facilitated speed of migrations
- Virtual migration has helped repeatability, lowered costs
Before Syniti, we would say ‘Now that we have all this useful information, it would be nice to do something with it.’ With the Syniti data governance solution we know where and how to take action.”
Kraft Foods turned to SAP who introduced the company to Syniti at SAPPHIRE. After discussions with Syniti, the company saw that the process they were using for data migration and governance was not sustainable or repeatable, and they chose Syniti in October of that year. “We saw the Syniti presentation and were blown away”, recalls Beckfield. “They showed us that we could succeed with fewer resources with a different plan.”
Kraft Foods made changes in the way they managed the implementation. Key personnel from a former data integrity group were repurposed to learn the Syniti solution and methodology, and focus on data quality as part of a newly energized Data Delivery Service (DDS). As DDS became more proficient, additional people were sent to Syniti for training.
Syniti remained key to the early success of the relationship by putting senior resources at Kraft Foods to get started quickly. The changes Syniti recommended to the process allowed the ERP project to be much more structured for the deadlines and commitments around data definition and other data-related project components.
Once clean data is in an SAP production system, how do you keep it ‘clean’? Kraft answered this question through early use of the Syniti data governance solution. SAP brought a new awareness of complex business rules and processes to the company. But not all business processes can be handled or enforced systematically; that’s where Syniti’s solutions play a key role.
Kraft Foods manages data quality in their production system with a lean team including Krause and Kraft developers who assist in creation and resolution of reports. When the team first started, the focus was on product and material, but has since expanded to customer, vendor and location master data. The company imports 195 million rows of data daily. This is growing as more and more plants come online, and it can grow exponentially with different pricing contained in the material master. Nightly imports begin at 9pm and end in the early morning to avoid performance issues. Large tables run separately on nearly 400GB of memory.
“The goal of the solution is to help discover and define rules that weren’t known or that needed modification — it’s a continuous process”, says Brad Krause, Master Data Manager for DDS. Since the company was in migration, much of the early reporting requirement was temporary (legacy systems vs. SAP) and consisted of cross- repository, cross-system reporting.
“We want to get to a ‘management by exception’ framework,” noted Krause. “To get that you have to trust in the rules and that the data is not masking some other cause from something else”. Business confidence has risen as the Syniti solution has delivered rules that start out as broad-based and get more granular. Since Kraft Foods has started the SAP rollout, they have also acquired Cadbury, which is migrating simultaneous to the company data loads.
“Because of the combined data volumes, the only way you can quickly perform exception rule iterations is through the Syniti solution,” Krause said. “The rules are getting better and better as we run these daily refreshes and the exceptions begin to drop toward zero. Now we ask whether errors are actually parameters that should be excepted from the report.
We saw the Syniti presentation and were blown away. They showed us that we could succeed with fewer resources with a different plan."
By Q3, Kraft Foods began a knowledge transfer process to take on more tasks, changes and management of the data migration from Syniti’s team of experts. As their skillset grew, the company sought additional cost savings through ‘virtual migration’ lower cost resources. Originally a labor arbitrage play, placement of those resources in Chicago, Mexico and China has become a strategic part of the DDS organization.
“Our Kraft Foods resources can continue to focus on high-value work while leveraging our strategic partner for design and development work”, says David Underwood, DDS Operations and Business Services Manager.
“We are able to work almost 24/7/365 as we kick off refreshes and development in China and finish up in Chicago later that day,” he continued. “The offshore model has allowed us to control the size of our team.”
Strategically, the labor arbitrage and flexibility realized through the organizational maturity has paid off and will continue to be a key component of DDS. The MDM team is in regular contact with DDS. Business processes are defined for all business data conversions, requirements and mapping, and then in collaboration with DDS those are verified and transferred to the data migration team structure.
- Harmonized 35,000 customer records cross-repository, cross-system reporting helped define new rules—continuous business improvement through data quality
- Team of three persons manages 195 million records downloaded daily
- 40 Plants had Boring Go Live® data migrations through 12/2009, remainder migrated in 2010
- Syniti planned and pragmatic approach achieved success without increasing staff
- Innovative approach to data migration, management of production data with the Syniti data governance solution