Product Lifecycle Management Proving Value at Heinz

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Product Lifecycle Management Proving Value at Heinz: A PLM Case Study from the Consumer Goods Industry – Food and Beverage reviews the strategic value achieved by Heinz from implementing Product Lifecycle Management processed and software in their global business. Please enjoy the free Executive Summary below, or click the report title above to download the full PDF (free of charge, no registration required).

Table of Contents

  • Introduction
  • Heinz Recognizes a Business Need
  • Heinz Takes a Global Approach
  • Unique Considerations at Heinz
  • Unique Technical Considerations
  • Heinz Selects an Industry-Focused Solution
  • The Prodika* Solution
  • Heinz Adopts a Pragmatic Deployment Approach
  • Meeting the Initial Goals
  • Additional Benefits – Satisfying Retail Customers
  • Key Observations
  • Summary
  • About the Author

Introduction

Henry John Heinz believed that “To do a common thing uncommonly well brings success.” And since 1869, the H.J. Heinz Company has supported that belief. Today, Heinz is a premier international food company, with number-one and number-two brands in more than 50 countries.

In early 2000, key Heinz leaders recognized a challenge in their business–namely tracking product specifications, formulas and suppliers across a diverse, global business– and set out to solve it. Along the way, they standardized how they developed and tracked product specifications, reduced the number of ingredients they purchased, increased global communication about product and supplier information, and improved the processes they use to develop and introduce new products to the market. As stated in the Heinz 2003 annual report, “Heinz has launched VIPER (Vendor Improvement and Product Enhancement and Research), a global computerized platform designed to enable the company to dramatically simplify its myriad product specifications. Heinz also reduced its worldwide SKUs by nearly 30% in Fiscal 2003 and is targeting an additional reduction of 10% by Fiscal 2005”.

In short, the Heinz VIPER project is achieving strategic value for their business by combining new processes and technology to form innovative “ways-of-working.” Heinz did not set out to implement Product Lifecycle Management (PLM), Collaborative Product Commerce (CPC), Product Data Management (PDM), or any other suite of software solutions. Heinz’s core objective was to simplify operations by enhancing communication, coordination, and visibility.

In the end, Heinz has accomplished what few others in their industry have been able to do–continually leverage product information across the entire lifecycle. The fact that these new business processes and technologies are now known as “PLM”–other than giving us a good umbrella under which to discuss how Heinz improved their business–is not important. What is important, of course, is the value that Heinz has recognized from their initiatives:

  • Reducing complexity in product portfolios and raw material management
  • Decreasing the proliferation of new materials and sourcing relationships
  • Cross pollinating best practices among and between business units
  • Streamlining the way Heinz brings new products to market

PLM concepts and benefits have been appearing in the annual reports of automotive, electronics, and other high-tech discrete businesses for some time. They are now starting to become more common in the Consumer Goods, Food and Beverage industries. Those that questioned the value of PLM for these industries thought that process industries were too “simple.” In fact, the unique requirements and inherent variability of process industries underscore the benefits of Product Lifecycle Management (PLM).

* Note: Prodika was acquired by Agile, who was then acquired by Oracle.