International Multifoods

Epilogue

The Renaissance system was redesigned and put onto a positive track and, in time, management moved from "containing the crisis" to "profiting from the crisis." Working in conjunction with IMC, VSA took over project control, reducing the role of the outside consultants. Management concluded that the system was incompatible with the way in which the business had to be run (decentralized) in order to provide good customer service in the vending industry. Consequently, Renaissance was redesigned to operate in a decentralized way, moving merchandizing back to the local level. 200 people were taken out of Denver and put into the field operations to take critical processes back to the local level.

Devendra left VSA within a month after Bob Price’s appointment as interim CEO. VSA hired a new President. Four people from SYSCO were hired to help with the project redesign. All changes were made internally, with little involvement of consultants. The consultant’s role in Renaissance was limited to fixing the bugs and writing specifications and helping with rollout and implementation. The consultants stopped making directional decisions, as these were taken internally to VSA staff.

Some specific systems redesign efforts were as follows:

It took 14 months to do all this and resume the main conversion. From there, the project went back to the a large-scale conversion plan involving all of the distribution centers. They now had a much more systematic approach for systems development, with very

good data controls and disciplined processes for error checking and cleaning data. Most important, mechanisms for organizational learning were in place, and operating.

As of May of 1999, all Renaissance-related systems were Year 2000 compliant. Functionality was considered solid and working well. The system is viewed as critical to the future of the company, and management estimated that the system will last 6-8 years before it has to be upgraded as the business grows and changes.

Eventually, VSA and Multifoods Specialty Distribution were merged into one organization, the Multifoods Distribution Group (MDG). Renaissance is the base information system being used today by the merged organization. Because of the lingering taint of the old name, the system has been renamed to "GEMINI," but it is the same system. The system is working very well, especially for vend customers, and there is high customer satisfaction. Customer business was won back and VSA is now doing well, with revenues in the (approximate) $1B range. A recently interviewed manager reported, "We are meeting our objectives and customers are happy."

IMC Overall IMC’s learning and experience gave them a necessary basis for future competitiveness in the food distribution business, which is their strategic direction.

A new CEO was hired within a year of Bob Price’s interim appointment, and Price returned to his role on the Board of Directors. The company worked to "reduce debt, consolidate operations, and focus the business. EVA was implemented to push the reality of balance sheets deep inside the organization and changed the compensation scheme to be based on EVA results." In general, there were efforts made across the board to build a culture of discipline and measurement. Eventually, IMC sold off the MONACA division and other non-North American subsidiaries. The plan has been to focus on North America for the time being and grow internationally in the future, once the North American businesses achieve an acceptable level of stability and growth. IMC stock rebounded, and the company is on a positive course for the future.



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