VINAMILK

VIETNAMS LEADING DAIRY PRODUCTS MANUFACTURER GAINS FULL SALES VISIBILITY

QUICK FACTS

We compared SAP software with what was available in the market, and the SAP solutions were best suited for our needs.
Tran Nguyen Son, IT Director, Vinamilk Corporation

Company Name: Vietnam Dairy Products JSC (Vinamilk Corporation) Location: Ho Chi Minh City, Vietnam Industry: Consumer products Products and services: Dairy products Revenue: 8.381 billion dong (355 million) Employees: 4,000 Web site: www.vinamilk.com.vn/eng Implementation partner: FPT ERP Services Co. Ltd.

Implementation Highlights Eliminated workforce wastage of using 150 staff members to collect secondary sales data Automated the collection of sales data from 90,000 retailers Why SAP Rich CRM functionality Powerful integration capability

Benets Enhance staff efficiency by automating the Challenges and Opportunities secondary sales data collection process Increase visibility of secondary sales data Increase visibility of sales performance Reduce operations cost Improve effectiveness of trade promotions Gain better control of sales channels Improve tracking of trade promotions Objectives program and ensure on-time payment Implement customer relationship manageto distributors ment (CRM) and business intelligence Enhance sales drive to retailers software Existing Environment Integrate enterprise resource planning Enterprise resource planning system and distribution management systems Distribution management system with new CRM and business intelligence functionality Third-Party Integration SAP Solutions and Services SAP Customer Relationship Management application SAP NetWeaver Business Warehouse component SAP NetWeaver Process Integration technology Database: Oracle Hardware: IBM Operating system: IBM AIX

SAP Customer Success Story Consumer Products

In order for Vietnam Dairy Products JSC (Vinamilk Corporation) to obtain daily sales and inventory reports from its retailers, this leading producer of dairy products in Vietnam had to station one staff member permanently at each of the 260 distributors that it works with countrywide.
Headquartered in Ho Chi Minh City, Vietnam, Vinamilk only had an enterprise resource planning (ERP) system that managed the data and process flow between the company and its distributors. We did not have a system that tracked and managed the data that was exchanged between our distributors and the 90,000 retailers that they distribute our products to, says Tran Nguyen Son, IT director at Vinamilk. Our staff had to manually collect data and collate it in Microsoft Excel spreadsheets every day. As a result, the information would sometimes be inaccurate. Our staff also spent a long time consolidating the data. Vinamilk decided in 2006 that it needed to address this inefficiency before it affected the companys leadership position in the long run. This prompted the company to implement the SAP Customer Relationship Management (SAP CRM) application and the SAP NetWeaver Business Warehouse component and integrate them with its existing ERP and distribution management systems. The SAP NetWeaver Process Integration technology was also included in this system upgrade exercise. The goal of this SAP project was to increase the visibility of sales information from our retailers, as well as leverage the information to better understand our customers needs. We also wanted to increase the effectiveness of our trade promotions program, adds Tran. More important, we wanted to reduce operations cost.

pared SAP software with what was available in the market, and the SAP solutions were best suited for our needs, says Tran. The implementation took 10 months to complete for 70 users at Vinamilk. The integrated system went live in June 2007 and, with this, ended the inefficient and costly process of gathering secondary sales data. There is no need for us to dedicate 150 staff members just to sit at our distributors offices to do the menial task of collecting information. Imagine the savings there, says Tran.

Enhancing Control and Visibility

With the CRM feature and a tighter integration of Vinamilks key business functions, distributors are able to consolidate secondary sales data into their systems and send the information directly across to Vinamilks headquarters without human intervention. When the information reaches Vinamilk, it is automatically synchronized with the companys ERP system. This information from the distributors is sent three times daily, giving Vinamilk enhanced visibility of its sales performance and greater control of its sales channels. The SAP solution has improved business transparency across our enterprise. It allows us to easily track and monitor our sales performance closely, and data integrity is ensured as well, adds Tran.

Staying on Top of the Game

Vinamilk has 4,000 employees and one of the largest portfolios of dairy products in the country. Its offerings range from core dairy products, like liquid and milk powder, to value-added dairy products, such as condensed milk, yogurt, ice cream, and cheese. Voted by consumers as the number-one brand in the Top Ten High-Quality Vietnamese Goods survey every year since 1995,

Immediate Savings
After evaluating the SAP offerings, Vinamilk selected them because of their rich CRM functionality and powerful integration capability. We com-

The goal of this SAP project was to increase the visibility of sales information from our retailers, as well as leverage the information to better understand our customers needs.

Tran Nguyen Son, IT Director, Vinamilk Corporation

Improving Effectiveness of Trade Promotions

Previously, Vinamilk also faced challenges in executing its trade promotions scheme. Trade promotions are temporary price cuts that manufacturers typically offer retailers to encourage them to reduce retail prices. For Vinamilks trade promotions program, distributors will undertake the trade promotions that the company gives to its retailers. Vinamilk will then pay its distributors for the price difference at the end of the month. The amount it pays will be based on documents submitted by distributors at every months end. Before the SAP solution was in place, the information that we received was

Empowering the Sales Force

The SAP CRM application and SAP NetWeaver Business Warehouse component have empowered Vinamilks sales force too, giving them a clearer picture of their retailers sales performance and stock position. Our sales force people carry with them a personal digital assistant that contains data that is synchronized with our central enterprise system. With this, they are able to better engage our retailers and drive sales, says Tran. Vinamilk operates in a very tough and highly competitive environment. We have to manage our margins very carefully, and we must do all that we can to drive revenue and reduce cost. The

growth and create significant new value for our customers, SAP, and, ultimately, entire industries and the economy at large. Today, customers in more than 120 countries run SAP applications from distinct solutions addressing the needs of small businesses and midsize companies to suite offerings for global organizations.

Knowledge, Experience, and Technology for Optimizing Business

We leverage our extensive experience to deliver a comprehensive range of solutions that empower every aspect of business operations. By using SAP solutions, organizations of all sizes including small businesses and midsize companies can reduce costs, improve performance, and gain the agility to respond to changing business needs. SAP also has developed the SAP NetWeaver technology platform, which enables our customers to achieve more value from their IT investments. Our professionals are dedicated to providing the highest level of customer service and support.

The SAP solutions that we have implemented will help us achieve our business goals and enhance our competitive edge.
Tran Nguyen Son, IT Director, Vinamilk Corporation

not 100% accurate. This affected payment processing and resulted in payment delays, explains Tran. But things are different now. With improved visibility of our sales performance, we are able to better control our product prices and the discounts that we give. Every sale that our distributors push through under trade promotions is also recorded in a centralized system. This allows us to pay our distributors on time, he adds.

SAP solutions that we have implemented will help us achieve our business goals and enhance our competitive edge.

SAP: Delivering IT-Powered Business Innovation

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* SAP defines business software as comprising enterprise resource planning and related applications such as supply chain management, customer relationship management, product life-cycle management, and supplier relationship management.

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