In-Depth
United Signature Foods Improves Enterprise Performance
United Signature Foods (USF), formerly Rykoff Sexton Foods, is a highly regardedsupplier of food products to U.S.-based foodservice and retail customers. Rykoff SextonFoods was originally an independent company, but was purchased by US Foods in late 1997.The new United Signature Foods company was formed when a venture capital firm purchasedthe Rykoff Sexton manufacturing operations from its parent company US Foods. Thenewly-formed company, consisting initially of manufacturing operations only, required thedevelopment of a sales and marketing capability as well as warehouse and distributionoperations. Current manufacturing operations are located in Los Angeles and Indianapoliswith headquarters in Chicago.
United Signature Foods' initial investment thrust was in the selection andimplementation of an ERP solution to support existing manufacturing operations as well asfuture sales and order management requirements.
Following the award of the application selection contract to TRW Integrated SupplyChain Solutions (ISCS), discussions with the company’s CEO revealed the followingadditional requirements: 1) development of a supply chain strategy to define and improvecurrent operations and to define new required processes in the area of sales, and ordermanagement, and 2) development of a short and long term warehouse strategy to support theIndianapolis operations.
Also, because there was no IT strategy for the company, and the IT infrastructure wasin poor condition and poorly documented, TRW recommended that IT assessment and ITstrategy development effort be conducted prior to the ERP selection process. USF made aninitial award of $40K to perform the IT-related analysis as well as to select an ERP anddevelop a timeline and budget for IT infrastructure development, ERP implementation,supply chain strategy and warehouse Strategy.
The Enterprise Consulting (EC) and Enterprise Integration (EI) groups from TRW launchedthe project with an evaluation of the current IT infrastructure and development of an ITstrategy based on a centralized network using both UNIX and NT using Citrix technology. Inaddition, all of the infrastructure enhancements were defined at a detailed level and abudget for IT infrastructure development completed. In tandem with the IT evaluation, asoftware evaluation and selection process was conducted. The process includedidentification of USF’s overall business requirements to assist in identifying anappropriate ERP application for their food service business. This was accomplished byemploying an ERP selection and evaluation methodology that uses a requirements database tocapture, analyze and present the weighted functional requirements identified as criticalby the operational managers at both the Indianapolis and Los Angeles facilities. Uponnarrowing the selection to two ERP software applications, USF chose QAD’s MFG/PRO.
Upon selection of MFG/PRO, USF awarded TRW an implementation contract to includeinfrastructure development, ERP implementation and development of a supply chain strategyand a warehouse strategy. The team’s goal was to implement MFG/PRO at theIndianapolis plant by April 30, 1999 and at the Los Angeles facility by July 31, 1999.Total award was for the entire effort was $1.84M. In addition, because of the shortimplementation schedule and the lack of qualified support staff at USF, TRW proposedmanagement of the ERP on an outsourced basis at least until the USF IT staff could bedeveloped to support the new technology. USF requested that TRW provide a proposal fortransitional outsourcing.
Outsourcing was originally proposed as an interim solution while the company wastransitioning to the new computer system. But, after assessing the pros, cons and costsassociated with the company’s strategic objectives, USF determined that outsourcingwas a long-term solution.
TRW proposed managing the ERP solution as well as all of the desktop applications,networks, databases and operating systems on an outsourced basis. The overall value of theoutsourcing arrangement was $1M per year for a five-year period or $5M.
The go-live for MFG/PRO was accomplished within three months of the project'sbeginning, meeting USF’s very aggressive implementation schedule. Go-live for the LosAngeles plant is on schedule for July 31, 1999
USF is currently growing aggressively though acquisition of new manufacturingoperations. TRW’s position as the USF information technology service provider willmean significant opportunities to support expansion of MFG/PRO to newly-acquired plants,as well as to provide all future IT infrastructure-related services.