Food Network
Generating around $100 million in annual sales, 77-year-old Liberty Richter ships its specialty products like Wasa Crispbreads and Horton's Rum Cakes to a wide range of grocery, natural food and gourmet stores. The company ranks in the top three specialty food marketers in the U.S. Since 1999, it has been a division of Tree of Life, one of the largest marketers of natural and specialty foods in North America.
When asked about the importance of technology to his company, Liberty Richter's vice president of finance, John McLennan, snaps an immediate answer.
"We'd be a fraction of what we are," says McLennan. "We wouldn't be able to compete."
Special Report
Granted, many tech gurus might make similar claims. But in Liberty Richter's case, there's reason to believe that technology is truly its lifeblood. Without supply chain and analysis tools, McLennan doubts the company would be able to stay out of its own way, much less satisfy clients in the hotly competitive specialty food space. The numbers bear out this conclusion: McLennan estimates that technology has helped Liberty Richter grow its revenue 25 percent without adding any additional personnel. Similarly, MIS spending as a percentage of revenue has declined by around 15 percent in recent years.
"We're not your main-grocery-aisle kind of food company, so places like Wal-Mart don't carry a whole lot of our products," says McLennan.
This is not to say, of course, that the company's tech needs are any less pressing than those of mass-market behemoths shipping their wares to Wal-Mart and other merchandisers by the crateful.
"Given our size, it's essential for us to be as efficient as possible, especially within the supply chain," says McLennan. "We're always looking for ways to improve."
State of Improvement
To this end, the company has installed a philosophy of sorts dubbed "C.S.I.," which stands for "continuous state of improvement." Only through constant attention to technological and business processes, McLennan believes, can a mid-market company such as Liberty Richter maintain its competitive advantage over its better-heeled rivals.
"We do very detailed analysis...we do P&Ls down to a very low level, and I'm not sure our competitors do it quite as far down," says McLennan. "We don't use a 100 percent activity-based costing model, but we're fairly close. I like to think that all the analysis we do gives us a very good handle on what products are driving our business."
Liberty Richter recently switched to an Oracle database, replacing an Informix system the company had used since 1998.
"Nothing against Informix, but the product we were using was five years old," says McLennan. While he admits that the transition was frustrating he says that the new database has allowed Liberty Richter's data-analysis pros to engage in a more detailed level of number-crunching than ever before.
"We can slice and dice things in ways that were impossible only a few years ago," says McLennan. "If there's a sales blip, we can spot it almost immediately. Was it a timing issue? Did a major customer move an order from one month to the next? Is it the beginning of a trend? These are things a company like ours needs to know right away."
Riding the Wave
Equally essential was Liberty Richter's recent upgrade from a character-based version of Blinco Systems' 3rdwave software suite. The new version is a GUI, Windows-based client server edition that, McLennan says, has eased a host of supply chain tasks for the company.
"From a data-entry standpoint, it's very user-friendly," he says. "In terms of the volume of transactions we can do, I think we can easily add 25 percent without adding any more head count."
Bountiful Benefits
Designed to make supply chain processes more visible and flexible, 3rdwave has helped automate a host of activities, including general ledger, accounts payable and receivable, logistics planning and monitoring and inventory. Using 3rdwave, Liberty Richter can also directly exchange EDI files with third-party warehouses, which eliminates the need to re-key data and print out or fax orders.
"We're doing more and more EDI, whether through traditional VANs or through the Internet," says McLennan. "Anything that reduces the amount of paperwork and the need to re-key data and improves accuracy is always going to be of great interest."
Essential Features
Most essential, McLennan says, are two of the features built into the 3rdwave suite: a foreign currency module and a traffic-control component, both of which are indispensable for a company that does much of its business with foreign suppliers.
"We buy products from foreign vendors, who sometimes want to be paid in their own currency," says McLennan. "And the traffic file helps us track shipments from foreign ports, which is tricky when you consolidate purchase orders into a single container."
The Net Is the Future
As for the future, McLennan anticipates further transition from VANs to the Internet. And while he's not eager to give away any of Liberty Richter's secrets, he believes that smart use of CG technology will help drive the company's revenues in the right direction.
"If we continue to do things better, we're going to keep growing," says McLennan. "Technology is one of the biggest parts of that."