BEK integrates design teams for operations and information systems cooperation
Jan 1, 2003 12:00 PM, By Gary Macklin
With the increasing need for faster and more accurate management, information technology has become a necessity for all successful businesses. With information systems designed to improve corporate results, operations professionals rely on their information technology departments more than ever to provide the tools needed to run business. However, the implementation of new information technology solutions nearly always involves difficulty for operations and provides the opportunity for friction between operations and information departments.
To smooth the transition between old and new technology, Ben E Keith Foods in Fort Worth, Texas, has adopted a formal program for development and implementation of new information technology solutions using carefully selected teams of managers from both operations and information systems departments.
Ben E Keith Corporation is the parent company of two related distribution firms: Ben E Keith Foods and Ben E Keith Beers. The company was founded in 1906 to sell fresh produce in what was then recently frontier Texas. Following World War II, Ben E Keith added frozen foods to its line of produce. The company was the first distributor for Birdseye in Texas. Today the company operates six distribution centers including Amarillo and San Antonio, Texas; Little Rock, Arkansas; Oklahoma City, Oklahoma; and Albuquerque, New Mexico, in addition to the headquarters center in Fort Worth. It is the 10th largest full-line foodservice distributor in the country, supplying customers in Arkansas, Kansas, Louisiana, Missouri, Oklahoma, and Texas with fresh produce, meat, fish, poultry, frozen foods, groceries, and restaurant supplies.
The company holds membership in UniPro Foodservice, Markon Corporation, and Distribution Market Advantage. UniPro is a buying cooperative with 200 member distributors serving more than 300,000 customer locations. It is the largest buying cooperative in the foodservice industry. Ben E Keith helped organize Markon in 1985 to provide produce buying power for foodservice distributors. Distribution Market Advantage is an organization of foodservice distributors serving multi-unit customers with locations in more than one geographic region.
Ben E Keith has annual sales of $780 million and operates a fleet of 285 tractors, 330 refrigerated trailers, and 25 refrigerated straight trucks, says Keith Pittman, senior vice-president of operations. Each of the six distribution centers stocks an average of 14,000 line items. Total company employment is 1,706 with 360 in operations and 440 in transportation, he says. Operations and transportation personnel select and deliver an average of 800,000 cases per week spread across 14,960 customers.
The largest facility in the Ben E Keith network is its 416,000-sq-ft Dallas-Fort Worth distribution center located just a few miles south of downtown Fort Worth. It operates a fleet of 135 tractors. At the other end of the spectrum is the 64,000-sq-ft center in Albuquerque with a fleet of 14 tractors. Between those extremes are the 245,000-sq-ft center in San Antonio with a fleet of 70 tractors, a 214,000-sq-ft facility in Oklahoma City with 42 tractors, a relatively new 155,000-sq-ft center in Little Rock with 34 tractors, and the smallest of the Texas locations in Amarillo at 135,000-sq-ft with a fleet of 33 tractors.
Team problem solving
Ben E Keith has always taken a team approach to problem solving, Pittman says. As the business has evolved, this approach has become especially important in involving everyone who touches a given project, particularly operations personnel who tend to concentrate on finding operational solutions and information technology personnel who sometimes seem to know only computers. The Ben E Keith team approach bridges the gap between these diverse groups, he says.
Teams work from the grassroots upward, Pittman says. If, for instance, a project involves a new order selection system, some members of the planning team will be night crew supervisors, because they and their personnel will be the ones responsible for using the system. Although Ben E Keith handles change as a series of projects, it insists on making changes only for sound business reasons. “Our goal is to remain at the leading edge of technology without finding ourselves on the bleeding edge,” he says.
A good example of the team approach is a recent transition to on-board computers and route recorders for the fleet to help implement a paperless delivery system. To insure that the information department understood operational requirements, programmers from the information systems department were detailed to ride along with drivers on delivery routes.
Grassroots input, management driven
However, a team approach does not mean that decisions are made by committee, Pittman says. In addition to grassroots input from those that will use a system, Ben E Keith appoints upper level personnel from both operations and information technology departments as champions of the cause. These champions, or captains, help ensure that projects are driven from the top down and make sure that potential problems are solved before they can become an issue between departments, he says.
Ben E Keith has the luxury of multiple distribution centers, giving the company the opportunity to implement new systems at one location and work out all the bugs before spreading changes throughout the company, Pittman says. For instance, the company used its Albuquerque distribution center to implement a new warehouse management system. This allowed Ben E Keith to implement the system in a new distribution center that handled the smallest amount of business in the company. Using a small distribution center allows problems to be solved while inconveniencing the fewest number of customers, he says.
Running a new project at a single distribution center before company-wide implementation allows for more accurate planning, Pittman says. With implementation at a single location, Ben E Keith can project the amount of time required for a project and assign personnel to the job more accurately. With the experience of completing a project in a small location, the company has a baseline for predicting time and manpower requirements for making changes in larger centers. “Knowing how long a project takes in a small center allows me to determine if we can make changes in our larger centers while other tasks are under way or if we need to concentrate our people on a single goal,” he says. “Experience makes manpower planning and time management much easier.”
Interest in success
In choosing a project champion, Ben E Keith tries to pick personnel with the best background for a given task and who have a vested interest in its success, Pittman says. A good example comes from implementation of the warehouse management system. “During our research, we visited one of our colleagues in the foodservice industry who had decided to give control of warehouse inventory to their accountants,” he says. “The result was that accounting and operations did not communicate very effectively. In addition, our colleagues learned that the operations department has more impact on inventory levels than they had thought previously. Our lesson from this was that giving ownership of inventory to operations will result in effective inventory management.”
While Ben E Keith wants to remain a leader in the application of technology to foodservice distribution, it does not implement new technology simply for the sake of technology, says Jim Stone, vice-president of information services. Every technology project must represent a business solution, not a technology solution. Implementation teams must apply business knowledge in developing the functional requirements of every project. Putting the project champions in place means finding the right people with the right knowledge of the business, he says.
“Call them what you want, team champion or user sponsor, team leaders must have deep knowledge of the needs of the business,” Stone says.
Another rule followed by Ben E Keith information services is to develop or acquire technology solutions that fit into the company's existing technology infrastructure. The company uses centralized processing, software, and technical support in conjunction with decentralized, local decision-making, and local operating schedules, Stone says. Any new technology must provide strategic advantages by supporting the Ben E Keith business plan. “Any time the company spends money on a new technology project, there must be a compelling business reason for the investment,” he says.
Keep the business running
In addition, new technology must be implemented with the least possible disruption of regular business, Stone says. Planning, scheduling, and implementation all have to minimize the risk of disruption. In general, this is done by rolling out new systems one distribution center at a time. If the project is complex enough, it may be put into just one section of one center or even one aisle of one environmental zone of a center before spreading it throughout the company. Warehouse management systems are a good example. They usually are implemented by departments in warehouses. “We would never simply throw the switch and bring up new technology throughout a distribution center,” he says.
The first step in adopting new technology is to assemble a design team and to designate a team champion, usually from operations. In addition, an information systems applications development manager must be assigned for the team. Working together, the operations and information systems team leaders develop a time line for the project, Stone says. The time line is critical, because it identifies the necessary steps that must be followed and the objectives that must be met from the beginning to the end of the project.
Once the personnel have been assigned, the team develops a system narrative to describe the functional requirements of the new system. With a complete description of system requirements, the company has a basis for deciding to build the solution in-house or to buy it from a vendor, Stone says. “Historically, we have purchased about half our technology solutions and have built the other half internally,” he says. “The decision to build or buy is made on an individual project basis. We have no bias toward either source.”
If Ben E Keith decides to buy a system, the design team prepares a request for proposal to help select the vendor. That request contains the system narrative along with a complete description of the company, its information system infrastructure, and the projected costs of the project. “All this is done before entering any negotiations with any prospective vendor.
A lot of research is done prior to issuing a request for proposal to make sure that prospective vendors can meet Ben E Keith requirements. Once vendors are identified, requests are sent out, usually to no more than 12 possible suppliers. The initial responses from vendors are used to select a number of finalists to bid on the project. The number of finalists usually is between three and five. Once selected, the finalists must make a presentation to the design team to demonstrate that their proposed product will satisfy all the requirements set out in the request for proposal, Stone says.
“Following the vendor presentations, we narrow the field to what we call ‘products of choice’ and begin checking vendor references and making visits to other distributors using the proposed technology,” Stone says. “Following the visits, a decision is made and contract negotiations are completed. At that point, most of the emphasis shifts to the information systems department. Whether the project is built or bought, the information systems department must build the interfaces that allow the new technology to work with existing computer systems.”
IS handles internal design
If Ben E Keith decides to build its own technology, the information systems applications development manager takes charge of technical design. After all the technical work, things like programming, screen design, reports design, and personnel resources, has been completed, the project goes back to the design team for review to ensure that it meets the requirements set out in the system narrative. Once the technical design is approved, the project moves into the construction phase for development of software and other requirements. Following construction, a prototype of the project is reviewed by the design team. A prototype review is absolutely necessary before final software approval, Stone says.
Following the prototype review, implementation is begun. One of the most important parts of implementation is a plan to train the personnel that will actually use the new system. The last steps are system testing, final implementation, and user training.
Technology projects are a constant at Ben E Keith. For instance, the company has recently completed a wireless order entry system, implemented an Internet order entry system, automated its credit system, set up a new warehouse management system, and moved into a new facility in Little Rock. Projects currently in progress include a system for evaluating vendor performance, development of engineered labor standards, installation of on-board computers for the delivery fleet, and redesign of the accounts payable, accounts receivable, and credit management systems. Within the next two years, Ben E Keith will have a voice-directed order selection system in place and will have a completely paperless delivery system, Stone says.
The keys to making all these project work, he says, are to insist absolutely that new technology fits the Ben E Keith business plan. This can only be done if the project leader, the champion, has the support of upper management and has the business knowledge to keep the project concentrated on its business purpose. The design team itself must be selected from the best the company has to offer, and it must develop a strategy that completes the project with the least amount of operational disruption possible. Before any project can be successful, all personnel involved must be fully trained. “Finally,” says Stone, “follow the plan from beginning to end without shortcutting the process at any point.”
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