The iSeries is Comfort Food for the Food Industry
February 13, 2006 Mary Lou Roberts
Who would have thought that the iSeries was behind the manufacture and distribution of so much comfort food? It seems only fitting that the quiet, low-hassle platform that so many have come to trust for its simplicity and ease of use should be instrumental in delivering our snacks and treats. But for decades, many companies in food distribution have seen the iSeries as a sort of comfort food of its own.
An April 2005 Sageza Group report discusses the challenges faced by an industry where food–often perishable–must be produced and delivered rapidly and in adherence with tough standards. But this is an industry where the iSeries has been a stand-out. According to the report, “30 of the top 50 global retailers are iSeries customers, as are six of the top 10 U.S. grocery chains. In 2004, 37 percent of new iSeries customers were in distribution industries, with nearly half of these in wholesale, 21 percent in retail, 18 percent in consumer products, and 15 percent in transportation.”
If that’s true of new iSeries customers, it’s a continuation of a long-standing tradition that the four companies profiled below. Each of these companies has lived with and loved the iSeries for at least three of its previous names (not counting the new name, the System i5).
Beer Nuts has been around since 1937, though the company was not named that until the 1950s when the tasty snack was prepared for sale from a small confectionary store in Bloomington, Illinois. And not much has changed for this highly successful product, except the size of the operation. Beer Nuts remains a family owned business, still producing its products (a range of nuts and pretzels) from its manufacturing facility in Bloomington. But today, Beer Nuts are everywhere, distributed in all 50 states.
The iSeries and its predecessors have played a major part in the operation of this business since the 1970s. Back then, says Chief Financial Officer Jeff Combs, the first System/3X was installed, which was also the company’s first computer. “Using punch cards to submit data, the box was extremely reliable for the large amount of transactions. Keep in mind that selling snack food 12 bags at a time all across the national through a vast distributor network creates a multitude of small transactions–the forte of the IBM iSeries.
“The heavy transaction load hasn’t changed either,” says Combs. “We built our business on freshness and on having the best possible product in distribution. Consequently, we emphasize with our distributors the need to place small, frequent orders. This creates the need for strong, centralized customer service to monitor distribution stock levels, anticipate the need for product, and facilitate orders through production, shipment, and arrival.”
Today, all that is done on an i5 520 with 2 GB of main storage and 141 GB of disk capacity, running all of the company’s Extol-based ERP applications, including the warehouse management and shipping systems. “We also use the iSeries to serve up our integrated Web site, and an extranet, which provides a knowledge colony and library of collateral for our field staff,” says Combs. In addition, he reports that the company’s most used tool is the dashboard in Client Access. “It’s a very nice integrated tool for operating the iSeries box.” In addition to the iSeries, a Hewlett-Packard (Compaq) server with Dell clients are used for the businesses PC applications, with the iSeries as a client accessed through the server.
How large is the staff that handles all this? Combs reports that the company has no IT staff, per se. “Our user group (roughly 10 users) is well trained to handle most PC issues and has a great deal of common sense when they approach the iSeries box.” It’s that easy.
Beer Nuts has no plans to change its choice of platform–any more than it plans to change one of America’s favorite snacks. “We plan to keep our iSeries and migrate as our business grows,” Combs says. “We appreciate the reliability of the product and as IBM continues its development of server partition, we may consider using it to serve-up everything. It has been an extremely reliable and stable technology for us.”
Oddly enough, 1937, the year that Beer Nuts debuted, also saw the sale of the first Krispy Kreme doughnuts. And like Beer Nuts, Krispy Kreme has grown and expanded as its products have grown in popularity from coast-to-coast.
Greig Radford, Krispy Kreme’s manager of iSeries and e-commerce, reports that the company got its first System/38 at its corporate headquarters in Winston-Salem, North Carolina, in 1982, having previously had a Burroughs mainframe system from many more years back. In 1985, the company began putting System/36s out in field stores, which are also wholesale distributors of the donuts in their geographic areas, and in about 1989, these were replaced both in the field and at corporate headquarters with AS/400s.
Today, Krispy Kreme has a rack-mounted i5 520 at its headquarters location, configured with 8 GB of main memory and 1.4 TB disk capacity. The company still has approximately 40-plus AS/400s in the field, which they are gradually displacing, moving the field functions to a hosted environment back at headquarters. Those systems still in the field talk to the home office through a virtual frame relay network that is linked into all the shops, transferring accounting and sales data.
How do they support all of those AS/400s that are spread all over the country? “We don’t,” says Radford. “That’s why we have the AS/400. Right now, I’m the development manager and the EDI manager and the hardware guy–the Jack-of-all-trades. There’s no way I could support 50 servers that are spread all across the United States, unless they were AS/400s.”
Krispy Kreme’s total corporate IT staff numbers 28, supporting 4,000 users. Only nine of those work on the iSeries; the rest support the network and the Windows servers that house SQL Server databases and the applications that run on them, most of which are Web-enabled. According to Radford, the Wintel servers at corporate are “breeding like rabbits,” but it’s the i5 that’s doing the heavy lifting for the EDI (from Extol), the centralized systems, and all of the support for the field accounting systems.
As Krispy Kreme moves to host more and more of the field systems in-house, Radford notes that, “The most difficult thing we deal with is communications. We’re spread out all across the U.S., and as we host more and more shops, communications becomes paramount. If the system goes down, we’d take more and more shops down with us. Communications and high availability, which we are getting ready to implement, is becoming more and more important.”
Why is the iSeries a good box for the doughnut business? That’s easy, Radford explains. “The iSeries is a great business box. Its performance, stability, and languages all lend themselves to dealing with transactional data, which is a segue to the invoice detail lines. The people in the food industry are a different breed. Our people are doughnut people and bakery people, they’re not IT people. And with the iSeries, you don’t have to know all the technology. It appears to the end user to be the same year after year. That’s good from a user point of view, even if it is bad for marketing. It changes under the covers, but it looks and acts the same way to the user. It’s consistent. We’re always available, and it works.”
Another tasty treat whose manufacture and distribution is driven by the iSeries is Mrs. T’s Pierogies. Every single week, this family owned business, which was started back in 1952, produces 11.4 million pierogies in 11 different flavors to wholesalers, distributors, brokers, and grocery stores across the country and beyond. The company even has a contract with the Department of Defense to supply pierogies to large U.S. military commissaries in Germany and Japan.
Tim Coyle, information systems manager for Mrs. T’s, which is based in Shenandoah, Pennsylvania, isn’t certain of the date of the first System/36 that was installed before his time with the company. But he does report that the first AS/400 was installed in 1999. The current AS/400 820, which he describes as the “central nervous system of the business,” currently runs its legacy applications, including financials, general ledger, order entry, warehousing, bill of material, invoicing, and cash applications, along with EDI, payroll, and human resources. This is all accomplished with a staff of two people: Coyle and a second staff member who provides system support.
What makes the iSeries right for Mrs T’s? Coyle stresses the importance of controlling production and distribution, which can only be done on a reliable system with good software. “We need to control the raw materials that go into the product, lock in control of the finished goods to the customer, and know that they are receiving a quality product. The AS/400 gives us reliability and total cost of ownership. We only have a small IT shop, and we don’t budget for a database administrator or a network administrator or developers. But putting all of our applications on the iSeries, we have a good return on our investment–and it never goes down.”
For many years–indeed since it’s founding more than 100 years ago as the producer of the first commercially made pure jam ever made in Canada–E.D. Smith & Sons Limited was privately owned. But this growing business just went public last June and the iSeries remains a key component of its growth support strategy. Though the company continues to focus on the manufacture and marketing of blended fruit, E.D. Smith has expanded into sauces and tomato products that are distributed through North America.
Beverly Russell, the company’s IT manager (who is also president of the COMMON iSeries user group), recalls the history of the iSeries in her shop: “Going back to the beginning of time in IT, as I understand it, the company operated a Honeywell machine. From there, we went to dual System/34s running MAPICS from IBM, which was the reason for going to the System/34. In the mid-1980s, we moved to the System/38, prior to my joining the company in 1986. In 1989, we moved to the BPCS system from SSA Global, still on the System/38. Soon after the introduction of the AS/400, we went to a B50 and haven’t looked back. Our current configuration is an i5 570. We still run BPCS as our ERP backbone.”
E.D. Smith generally upgrades hardware about every two years, reports Russell, who maintain that if she buys a system to last more than two years, they’ve paid too much. “We’ve been through an AS/400 B50, D50, F50, 510, 620, 720, 820, and now the i5 570 using logical partitions.”
That i5 570 runs a full gamut of applications, from formulation development to sales analysis and business intelligence. The base ERP system is BPCS, but Russell says that this software has been heavily customized over the years with several unique differentiating applications that were completely custom-written. “We also run Infinium H/R payroll, Warehouse BOSS, Shipper Management System for freight management and rating, Logility Demand Planning and Manufacturing Planning and DBQ (Database for Quality). Our business intelligence system is InfoManager. EDI is an integral part of our business (and very prevalent in the food industry) and has been automatically integrated into our applications. We also run Lotus Notes on our i5 and have quite a few Notes applications integrated with our core business systems. Our system has evolved over many years.”
In addition to the i5, E.D. Smith has installed two IXA-attached xSeries boxes that run terminal services and support the 90+ network stations around the company. These run their Lotus Notes client software, Microsoft Word and Excel, the BI client software, the Logility Demand Planning client, and the Manufacturing Planning client software.
Supporting all of this is a team of eight, including Russell. Her additional team members include an application development team lead for the i5, one programmer analyst (i5), an EDI coordinator, a technical support manager (i5 and all other hardware), a Lotus Notes administrator, and two help desk staff.
What makes the i5 a good choice for her company and industry? “The food industry is very focused on understanding margin,” Russell explains. “We are a low-cost producer, and we need to understand every aspect of our product costs as well as our expenses. We are very analytical, yet still focused on delivering exceptional customer service and on-time delivery. The i5 is very reliable and very versatile. It offers exceptional uptime, and an excellent array of applications that meet our industry’s needs. The ongoing support cost is also very reasonable, allowing us to run a very full complement of IT applications and services for much less than 1 percent of sales.”
It would take a lot to get E.D. Smith to switch platforms after all these years and with all that’s been invested in it. “The i5 is at the core of our business processes and is even closely intertwined with many of our manufacturing processes. We rely on this platform to cost-effectively take care of business. We will continue to invest in it and reap the benefits,” says Russell.