Customer Management: Driving to The Store

When entering uncharted territory, it pays to have an experienced partner, even if you're a hefty CRM technology company like SAP.

Partly because of that, SAP has brought on a partner, Coca-Cola Enterprises, to help it build a new direct-store delivery component into its existing enterprise resource planning system. The goal is to help consumer goods companies improve direct store delivery, full-service vending and equipment service, according to SAP.

The arrangement is mutually beneficial for Coca-Cola Enterprises because up until now the company hasn't found an ERP application with direct store delivery built into it, says Margaret Carton, vice president and chief information officer for Coca-Cola Enterprises. According to SAP, the relationship is a license and development deal that involves implementation and training as well.

SAP did not disclose a timeline for the project or an estimated completion date. However, SAP says that pieces of the solution would be made available in phases prior to the completion of the final product.

Coca-Cola Enterprises is The Coca-Cola Company's largest bottler and distributor, bottling and shipping 2 billion cases of Coca-Cola products each year representing 21 percent of Coca-Cola's worldwide volume. Coca-Cola Enterprises products reach 80 percent of the North American population as well as Belgium, France, Great Britain, Luxembourg, Monaco and the Netherlands.

"We operate in the direct-store delivery environment every day," says Carton. "Our contribution is expertise in this market and an understanding of what the requirements are."

Reaching the Pinnacle
When finished, the effort will result in the incorporation of direct store delivery into the MySAP Business Suite. The focus of the project will be on integrating mobile and back-end functions including field sales, inside sales and logistics.

The direct-store-delivery development project is just part of a technology initiative, dubbed "Project Pinnacle," being undertaken by Coca-Cola Enterprises with SAP. Coca Cola Enterprises is deploying the mySAP Business Suite in North America and its European markets over the next three years. This is includes mySAP CRM, mySAP Supply Chain Management, SAP solutions for mobile business and mySAP ERP.

Coca-Cola Enterprises' relationship with SAP dates back several years. It implemented SAP technology in the late 1990s while replacing some supply-chain systems that were non-Y2K compliant.

At that time, Coca-Cola Enterprises began considering implementation of an ERP solution, according to Carton. The company realized it was coming to ERP late in the game--the technology had been around for some time at that point--but had to ask itself whether an ERP system made sense.

There were no ERP systems available that addressed the needs direct-store delivery companies specifically, says Carton. In 2002, SAP expressed an interest in developing direct-store delivery capabilities inside its ERP system to Coca-Cola Enterprises. Consumer goods companies often deliver products to a warehouse operated by a retailer, which then carts the products to the store. In direct store delivery, the CG company takes the product to the store in its own trucks, meaning it needs a more complex system in place for order processing and delivery.

For example, Coca-Cola Enterprises account managers visit stores every few days taking orders, Carton says. Those orders eventually get processed into truckloads.

An ERP system with a direct-store delivery component would have an order entry component and would assist in handling logistics, such as the loading, routing and dispatching of trucks in order to ensure maximum efficiency in delivery. It would eliminate paperwork and minimize empty space on trucks.

Handheld Assistance
In addition, SAP's direct-store delivery system would also assist in the acquisition and management of customers. Price list management, promotions, merchandising and customer prospecting capabilities would be included.

The application would be mobile, including a capacity for handheld support. In addition, the application would include functions related to the service or fulfillment of vending machines as well as management, maintenance and repair of equipment for food and beverage companies.

Applications that handle these sorts of jobs are available, says Carton. However, the ones that exist are "bolt-on" solutions that attach to ERP systems already in place.

It costs more to maintain an outside system, and creates the need to build interfaces between the direct-store delivery application and the overarching ERP system, according to Carton. Furthermore, such "bolt-on" systems are inherently less flexible because they aren't part of a grand ERP solution.

With the announcement in February that SAP and Coca-Cola Enterprises would jointly work on creating such a system, the development process began in earnest. The partnership makes sense, said Christine Overby, senior analyst with Forrester Research.

"Nobody knows DSD better than the companies who live it," says Overby. "Companies like Coke that lend its expertise to applications development will benefit from the customization." Moreover, the partnership will help to fill a gap unfilled by existing consumer goods CRM offerings, according to Overby. CRM applications need to grow to meet the needs of increasingly mobile field sales forces.

"CRM systems in consumer goods need to beef up their retail execution component because of the growing need to support the field sales reps who can verify in-store promotions, planograms and inventory," says Overby.

For Coca-Cola Enterprises, the development project with SAP means it doesn't have to go to an outside vendor to address its direct-store delivery needs. "This is filling that gap that would have left us with a legacy system," says Carton.