An Uncanny Approach to TPM

Throughout its first decade of doing business as a home canning company, Alltrista Consumer Products Company had little need to track promotional activity and trade promotion spending. In 2002, new investors set out to create a billion dollar plus consumer products corporation and leveraged Alltrista -- who's home canning brands include Ball, Kerr and Bernardin -- to create its parent company, the Jarden Corporation. Then in February 2003, Alltrista's passive approach to trade promotions and order management was deemed old-fashioned when the company acquired a business outside of the home canning market called the Diamond brand; manufacturer of matches, plastic cutlery, clothespins, toothpicks and lighters.

"When we acquired the Diamond brands, we gained a highly promoted product with very complicated trade deals, customer net pricing and so many components that were very different from the way the home canning business was managed," says Jesse Edelman, senior vice president, Sales for Alltrista. "It was a hodgepodge because there was no way of understanding who our most efficient or profitable customer was, and we couldn't get our arms around how much we were spending."

Suddenly, it became very clear that Alltrista was lagging behind the trade promotion times, experiencing poor exposure through spreadsheets. The company needed an inexpensive trade promotion tool that could be rapidly deployed and help create the accountabilities necessary to manage its growing business.

A Convenient Conversation
The answer to Alltrista's trade promotion dilemma came in a conversation between Edelman and CROSSMARK Vice President of Business Development Craig Rosenblum. Edelman learned that CROSSMARK and Gelco Trade Management Group formed a partnership in June 2004 to reduce costs for manufacturers through a single, integrated process to improve trade funds visibility and eliminate unauthorized deductions, while providing financial and process controls. Additionally, users can take advantage of order management services provided through CROSSMARK's existing alliance with EDS.

The minimal cost of adopting Gelco for trade promotion management via the alliance and the ease of an out-of-the-box product made sense for Alltrista considering its smaller footprint (Alltrista is a $250 million business, according to Edelman). The fact that Edelman had a positive experience working with Gelco to manage the Clorox business in the past was an additional bonus.

The Sarbox Factor
Interestingly enough, the emergence of Sarbanes-Oxley did not initially play a role in Edelman's decision to embark upon a trade promotion initiative.

"When we began introducing Gelco, our accounting department was weary of passing on the responsibilities of managing promotions and clearing deductions to the broker," says Edelman. "Then noise started around Sarbanes-Oxley earlier this year and we realized without Gelco, we would be in big trouble," he continues.

Alltrista originally planned a soft launch for Gelco, with a goal of being 100 percent live by January 1, 2005. Now, however, Alltrista is pushing ahead harder and faster given what Gelco means for compliance with Sarbanes-Oxley.

Lifting the Lid on Benefits
With Sarbanes-Oxley added into the big picture, Alltrista modified its implementation plans to be 100 percent live with all promotions and deductions by September 1, 2004, rather than January 2005.

While the implementation of Gelco for trade promotion management is underway, Alltrista did not meet its September deadline. Still, benefits are already being realized. Here is what Alltrista is seeing so far:

• Visibility - A major objective was to increase visibility and accountability of trade spending. Visibility increases every day and Alltrista expects to see what has been earned against commitments/ promises and paid against that performance -- customer by item.

• Control - Gelco provides controls that support the promotions approval business process. Everyone from the broker to the senior VP of sales has access to the same information with real-time visibility with regard to status, budget, products, etc.

• Accurate pricing - With the ability to see the details of a promotional event, Alltrista can ensure the accuracy of pricing well before the first ship date. 

On the other hand, there are some challenges that Edelman says are worth noting:

• Analysis and Reporting (A&R) - A&R tasks were pushed back in the project plan and Edelman wishes he had more reports available. The A&R requirements, development, testing and release process have taken much longer than anticipated.

• Integration - Alltrista deferred some interfaces because it isn't able to systematically recreate a manual process. As more accurate information comes through Gelco, Alltrista will be able to remove some of the human check points that exist today, redefine a more appropriate business process and then automate that business process.

Wake-Up Call
For a company that Edelman once described as a "behind the times" as far as trade promotion management goes, the acquisition of the Diamond brand and the potential for future brand acquisitions has pushed Alltrista into action.

"With the level of tools we are giving to the organization over the course of the next months with trade promotion and sales reporting systems, we are finally getting into the 90s," says Edelman. "This is a big step for a very sleepy organization."