THE COMPANY

This joint venture between two large consumer product companies was the largest operator of bottled water deliveries to home and small commercial markets in the United States. The company runs over 2000 routes across the continental United States under several well known brands built through acquisition and merger over time.

THE CHALLENGE

In the process of being taken private, all operations were under review. Normally the various operating units ran company owned and operated routes. There was a relatively small channel of independent owner operators (distributors), which required exception based and or manual processing. The company was moving to popular ERP system and this profitable but small segment didn’t “fit”. The process differences included:

• The ability to provide common customer billing and pricing to commercial accounts across the independent distributor network.
• Operational processes such as loading and inventory control across different types of distributors.
• A variety of custom accounting transfers and credits that supported pricing flexibility by protecting the channel from cash flow issues arising from corporate pricing and product mix decisions.
• Providing end user support “outside” the corporate norm was problematic.

The costs of building and supporting the required customizations into the ERP were high in terms of budget and existing internal capacity. The 3rd party channel was critical to servicing geographically remote locations that were not cost effectively served by company routes. The channel was small in terms of gross revenue (12 million annually), but provided high incremental operating margins.

THE SOLUTION

Ordinal provided the following services:

• We led an analytical effort that identified key processes and the cost/benefit impact of several corporate alternatives to managing the channel including shutting the channel down.
• We modified one of our own existing products (RouteXL application framework) to provide custom web access for company management, warehouse and dispatch personnel as well as 3rd party distributors and customers
• We provided hands on trial implementations and modifications to ensure the solution “fit” the various types of distributors and provided integration for Sales and Inventory to the corporate ERP system (Oracle).
• We provide a hosted support environment that requires minimal corporate IT effort and strong end user support.

THE RESULT

• The company was able to close 4 small distribution centers dedicated to the channel and run channel operations within existing company distribution centers. Corporate capital gains realized from these transactions were approximately three million and annual operating cost reductions from plant and personnel were about 500K.
• End users enjoy dedicated support familiar with their business and a 99.8 up time percentage with an ongoing total cost of ownership of slightly less than 1% a year of revenue.
• The solution was deployed inside the schedule of consolidations and integrations which would not have been possible using internal resources or traditional external technology consulting resources.