ROI: Popping at the Seams and Nowhere to Grow

Collaborative trade management is one way to make sure future growth isn't stifled by past systems.

[From iSource Business, November 2001] The popularity of "Poppers," the stuffed jalapeno appetizer and signature product of Anchor Food Products Inc., soared in the 1990s, forcing the Wisconsin-based company to deal with the exciting, yet demanding challenges of rapid growth. The growth spurt meant that Anchor Foods, a leading manufacturer of frozen appetizers and snacks, was dealing with an increased number of national food brokers, processing more orders, and managing a larger volume of shipments and inventory.

Since increasing the number of employees to handle the growth was out of the question, Anchor Foods turned to e-commerce as a means to help it manage the larger volume of business. However, it found the electronic data interchange (EDI) system it chose to be slow, expensive and down much too often to be efficient, recalls James Marsh, IT operations manager. The growing company realized quickly that it had to find another technology-based solution. After a thorough search, Anchor Foods discovered the answer to its needs in InterTrade Systems Corp., a 5-year-old company that provides a commerce platform for collaborative trade management solutions.

Marsh says InterTrade's platform, TradeLinks, offered Anchor Foods the efficiency, speed and cost savings it needed to transform its operations to meet the needs of its growing business and market.

Whereas no solution might have stifled Anchor Food's steady growth, the trade solution has enabled the company to realize an astonishing expansion of more than 700 percent since the early 1990s, Marsh points out. In addition, one of the biggest advantages of using such a solution is that it takes the "hassle" out of linking up with trade partners, many of whom use different value added networks (VANs) and connections. For example, a trade partner enters an order through its system, sends it to Anchor Foods, and InterTrade's TradeLinks "translates" the order no matter what system the trade partner is using.

"As long as our partners have an EDI software system, InterTrade makes it work because it accepts information from a myriadof EDI software suppliers. The information becomes one universal language, one data set," Marsh says.

Additionally, Anchor Foods uses the TradeLinks platform for shipping confirmation and inventory adjustments, stretching efficiencies and cost savings across the supply chain. Marsh says the system "keeps all departments connected."

Marsh explains that once an order comes from a trading partner through TradeLinks, Anchor Foods checks inventory levels to confirm that the order can be filled. The order is forwarded to the warehouse where it is picked up and a shipping confirmation is sent to the proper departments. That information is then used to update and adjust inventory levels, as needed. Marsh says the automated shipping confirmation is just one more plus for the company: "As a result, our forecasts are not only more timely but of better quality."

The ordering, shipping and confirmation process is now extremely efficient, occurring over a one or two-day period, instead of a week. Marsh adds that the solution has delivered "dramatic savings," cutting the cost of processing orders by approximately 50 percent. The speed and efficiency of the system is evident in the number of transactions Anchor Foods can now process, which is about 10,000 to 12,000 a month compared to 2,000 before InterTrade.

Anchor Foods' return on investment is realized through the cost and time savings offered by InterTrade's system, as well as the fact that there were low start-up costs with the Internet-based system; and the charges are issued per transaction, as opposed to its other EDI system that charged per character. "Those two points alone were an immediate cost savings to us," Marsh says.

Anchor Food's collaborative automation solution was up and running quickly. Within four months, 119 of Anchor Foods' trading partners were connected.

Anchor Foods sought seamless integration among disparate applications, data standards and protocols, which many businesses view as a key component, says Scott Munro, CEO and chairman of InterTrade. "We provide a commerce platform which can be used by all trading partners up and down the supply chain. One of the benefits is that businesses can now gain visibility and view all the information within one place and on-demand. This provides a tremendous amount of value for all the players since they can make more intelligent decisions based on correct information," he explains.

Marsh says the efficiencies realized with the collaborative solution have given the 46-year-old Anchor Food Products Inc. a competitive edge because it can process orders quicker, keep overhead costs down and be more price competitive.