Shortly after joining Arnott's a little over half a year ago, new CIO Sue Sutton gave a presentation to the leadership team outlining her diagnoses of the current state of affairs on people, process and technology, and suggesting her vision for the road ahead. Several of those attending were clearly nonplussed, with one of them remarking what a new experience it was to have IT coming in and telling the team what it should be doing. Not that he was displeased - the experience may have been new but it was clearly welcome.
For Sutton, the meeting gave graphic evidence of the sea change that has been under way in manufacturing over recent times, where until recently IT has been a utility function and the emphasis has been on engineering, not IT. Indeed there are signs of a new world order in FMCG (fast moving consumer goods) companies, heralded by a growing sophistication and rigour in IT.
While only able to speak for Arnott's, Sutton has little doubt other FMCG companies are also being forced to make significant new investments in IT to meet the demands of their trading partners. Consumer goods manufacturers find themselves squeezed from both ends, as major retailers move aggressively into full electronic collaboration with suppliers, and suppliers like Amcor and Goodman Fielder pressure FMCGs to react and react fast to calls for vendor managed inventory and other technologies.
"Because the retailers in the food or retail based consumer goods [areas] - like Woolworths and Coles - are now driving a very aggressive, technology-based agenda around collaborative commerce, and even some of the large suppliers - the Amcors of this world - are driving for collaborative commerce type scenarios, all of a sudden IT has become critical to the actual trade and to the supplier," Sutton says. "It's now very much on the agenda of the supply chain. So I suspect we'll see in manufacturing more generally a complete evolution of the role IT plays, and that's certainly what I'm seeing here at Arnott's."
The phenomenon is not unique to Australia, as Sutton's colleagues at parent company the US-based Campbell's Soup Company have made clear. In America, Wal-Mart and retailers are leading the push. In Europe, Tesco is the prime mover. As Sutton positions herself to take a process leadership role, in Europe her counterpart Roberto Depani is being asked to perform exactly the same function within the European leadership team, although admittedly facing much more complex issues because he must deal in multiple companies with different business models. In the US also, the supply chain IT people have to take leadership on process to cope with a seismic transformation in how Campbell's deals with organisations like Wal-Mart, and vice versa.
For instance, in April Campbell's announced plans to consolidate the multitude of intranet sites from which its sales force, other employees and eventually some business partners will be able to get information. Director of enterprise architecture Joe Brand said the portal, which is based on IBM software and is being developed through an IT services contract with IBM, has an infrastructure that should let Campbell's rapidly bring its other applications and databases online. The next applications to be tied to the portal will be sales force automation tools. Campbell's also plans to add business processes, such as online procurement activities.
In her new role Sutton works with a global CTO based at Campbell's in the US who looks after all technology for the entire operation. "We have a good relationship, we're peers, we're on the same team. We get an opportunity to get together three or four times a year," she says. "He came travelling around Asia with me so he could get a better understanding of what the Asian environment is like, as well as the Australian environment." Sutton and the CTO negotiate on planning to achieve a joint view on global infrastructure projects and she also keeps him informed on any local developments with infrastructure implications. The arrangement, she says, is working very well.
But with the relatively unsophisticated manufacturing industries under pressure on IT like never before, for Sutton the main game is to ensure Arnott's can work with its customers to build the future, rather than being pushed into it prematurely, and to take a process leadership role within the organisation.
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