Kraft Foods Inc Case

Introduction

Kraft Foods Inc. (Kraft) is one of the world's largest food and beverage companies founded in Chicago in 1903. Kraft Foods Inc. is listed on the New York Stock Exchange and is a component of the Dow Jones Industrial Average and Standard & Poor's 500. They sell seven types of products namely confectionery, biscuits, beverages, cheese, convenient meals and grocery in approximately 170 countries. To deal with large scale of business, this large company operates with the aid of information technology and information system to smoothen their supply chain process. In the following sections, we are going to discuss how information technology and information system help Kraft to develop their superior position in food industry.

Information system and informaion technology applications

Enterprise resource planning

Kraft implemented a big change on its system by upgrading the ERP system in 2007, as well as carrying out the Master Data Management (MDM) system for data storage in 2008.

Today, Kraft uses SAP ERP 6.0 in operation together with the MDM system by SAP NetWeaver®. Centralizing the data throughout the world by MDM improves the quality of information. The integration of MDM and ERP enables information sharing in systems which smooths business processes, like material replenishment and delivery arrangement. Various parties in Kraft are able to get real-time information which avoids duplicating and interrupting the information. Thus, the accuracy of information can be maintained.

Moreover, the implementation of MDM and integration with ERP improves the efficiency in operation. Since information is being centralized from one source and shared immediately with different internal departments as well as external parties, fewer errors and disrupts are made by delayed information in manufacturing processes. Therefore, production schedule can be stabilized together with the quality of products.

On the other hand, ERP optimizes the operation by sharing the common processes, for example, the delivery of raw materials. As the quantity of raw materials needed could be found within the same system throughout Kraft's centers by ERP, centralizing the order process can thus be made. Kraft can benefit from bulk purchasing.

For Kraft, the integration of Transportation Management System (TMS) and ERP assists a lot in automating daily operation. As the quantity of raw materials needed could be found within the same system throughout Kraft's centers by ERP, automatic replenishment of inbound materials can be made as well as the delivery process by TMS. Besides, load consolidation in the raw materials and delivery over 21 countries for 191 manufacturers can minimize the transportation cost.

Moreover, integrating the system also increases