eCapital Advisors Case Study: Malt-O-Meal
Malt-O-Meal is the largest privately-held cereal manufacturer and the fourth largest cereal company in North America. Its line of hot cereals, oatmeal products and ready-to-eat cereals are distributed through every food wholesaler to all major food retailers in North America.
Products/Services Purchased:
- Cognos TM1
- Cognos Business Intelligence
- Cognos PowerPlay
- Metric Studio
- eCapital Advisors services: consulting, implementation, training
Challenge
Malt-O-Meal’s Finance Department was plunged into challenges each October when it came time to consolidate more than 100 Excel spreadsheets for the annual budget. There was so much effort spent on manual consolidation that there was no time remaining for analysis. Yet no one fully realized how complicated the company’s financial structure was until they began the TM1 implementation process.
Malt-O-Meal also wanted to use this opportunity to shorten its budgeting/forecasting cycles, identify opportunities for quality and operation improvements as well as cost reductions that result in consumer savings, and execute its strategic commitment to reduce the corporation’s carbon footprint..
Strategy
The strategy was to improve connections within the organization to provide timely, relevant information as a foundation for business decisions. There was particular emphasis placed on uncovering information that would lead to a reduction in packaging and transportation costs.
eCapital Advisors knew that we could expand their analytical capabilities by ensuring that their systems were upgraded and current, and by making more tools available to them.
The goal was to use Business Analytics to align and improve every aspect of the business – from the boardroom to the plant floor. So after identifying and setting up tracking for key strategic, financial and operating metrics, we showed Malt-O-Meal how decision making could be pushed deeper into the organization to take better advantage of the skills, knowledge and abilities of the people closer to its operations.
Approach
One of our first tasks was to conduct administrator training with the Malt-O-Meal staffers who were going to be using the business analytic tools. We then turned our attention to the budgeting process. Because of the project’s complexity, Malt-O-Meal decided to implement the TM1 budgeting process in stages rather than involve all departments at once. In the interim, eCapital Advisors helped create Excel templates that collected the necessary information which could then be loaded into TM1 for consolidation.
“eCapital Advisors’ consultants are very dedicated to helping you through the implementation. They are willing to learn your processes, and to work night and day if that’s what is needed to meet a deadline.”
We then turned our attention to helping Malt-O-Meal track relevant organization metrics, and ensuring that appropriate information is distributed throughout the corporation through an integrated system that combines metrics, scorecards, reports, OLAP and self-service analysis and budgeting/planning.
A detailed labor planning model, for example, enabled Malt- O-Meal to more accurately plan taxes, profit sharing and other benefits at an individual employee level, rather than just by department. We also helped set up a better system for inbound and outbound transportation. We took Malt-O-Meal’s production and revenue forecasts – which described how many units would be sold over the next year – converted these units into pallets, and set up a matrix that would allocate to the whole network, thereby giving them a view of how the transportation dollars would stack up based on the volume forecast. We also worked on a new capital plan model that enables them to plug in the assets and expenses down to each manufacturing line to forecast the depreciation expenses for each line.
Because this was a company-wide deployment, one of our last tasks associated with this project was to conduct end-user training, during which we worked with the individuals at all levels of the company who were going to enter data into the analytic tools.
Impact
The improved analytics and forecasting enabled Malt-O-Meal to save a lot of time consolidating and gain more time to analyze. The company credits streamlined processes and more efficient decision making for these dramatic improvements.
Cognos TM1 enabled Malt-O-Meal to condense certain processes within the budgeting and planning cycles from months to weeks. Malt-O-Meal is currently in the process of going from an annual budget to a rolling forecast.
For example…with the budget consolidation now happening automatically, there is much more time for analysis. Using the accurate new forecasting tools, budgeting has transitioned from being primarily reactive to becoming a forward-looking, proactive process.
The Malt-O-Meal staff has become very proficient at using TM1, and continues to add even more enhancements. They now rely heavily on the automated dashboard reporting using information from TM1 and the Cognos Suite. The Finance department simply sends a link via email, and the executives can access results in a very interactive format, with drop-downs that enable them to view the information by month, by year to date, and other dimensions. They are thrilled to be able to see all of the variations that were impossible to get from old-fashioned spreadsheets.
