Power User - December 2004

In an effort to assure customer satisfaction and ensure that its multiple brands remain competitive, H.J. Heinz created a customer relationship model called First Call. First Call is all about offering services and capabilities that make Heinz its customer's "First Call". One of First Call's core enablers is called Project Keystone. This project is a two-part effort that allows Heinz to transform its trade promotion strategy by tying together all of the elements of its MAPS program (Merchandising, Assortment, Pricing and Shelving) into a growth package. Due to the widespread influence of Project Keystone across the entire Heinz organization, the company secured top honors as this year's winner of the Consumer Goods Technology Power User Award.

George Chappelle, chief information officer for Heinz, says that Project Keystone involves much more than just a trade funds initiative. "It's about driving growth and rewarding efficient customer behavior as it relates to trade promotion as well as creating a new level of productivity across our field sales organization."

First In Line
The first part of Project Keystone allows Heinz customers to generate trade promotion funds based on the products they buy from Heinz. As customers perform, they are able to earn funds from their accounts. To Heinz, customer performance is defined as merchandising activities, such as temporary price reductions, displays and other traditional promotional tactics. If Heinz ships 100 cases to a customer, the customer receives trade promotion funds for every case shipped. Funds are spent promoting Heinz products.

Enter part two of Project Keystone, a second-generation trade promotion system powered by Siebel. At its core is Siebel Consumer Goods 7.5, a robust planning tool that forecasts volume, promotions and spend. "It is completely integrated with our ERP system, so as orders are processed, it automatically deposits funding into customer accounts," says John Hans, vice president of Channel Sales, Heinz U.S. Consumer Products.

In addition, Consumer Goods 7.5 updates deductions and payment requests on a daily basis and provides sales people with up-to-the-minute shipment and consumption information. A series of enhancements have also been built into the Siebel system to monitor post-promotion activity. Cost per incremental case and cost per shipped case are the metrics used to gauge efficiency and effectiveness of promotions.

"Project Keystone drives the ownership of trade promotion management to the right level within our organization. That level is the sales person and customer. Through Siebel, an account manager can see if the customer's trade funds are in line with the current plan, based on what's being shipped and spent at the account level," says Chappelle. "The entire process is very dynamic."

Seeking the Right Consultation
Deloitte Consulting also played a significant leadership role in the design, development and implementation process. "They played a key role at guiding us through the design and development process," says Hans. "They told us what we needed to hear with a firm dose of reality."

Today, the H.J. Heinz trade funds initiative is running like a finely tuned, well-oiled machine. Deloitte has passed the baton so that the system support and development has transitioned to Heinz' I/S and Business operating staff. In addition, Heinz will soon begin integrating the promotional plan from Siebel into its Manugistics supply chain system. This will allow Heinz to tap customer level trade spending data as a way to assist in creating an enhanced customer profitability system. Now that's what we call a true Power User.