Dairy Foods moving from Oracle to JD Edwards

By ADAM GIFFORD

New Zealand Dairy Foods is dropping its Oracle enterprise software in favour of a suite from JD Edwards to run its $470-million-a-year business.

Chief financial officer Jim Sybertsma said the company installed Oracle financials and order entry software in 1998 as part of a planned wall-to-wall rollout of Oracle within then-owner New Zealand Dairy Group.

Its manufacturing of milk and cultured products brands such as Anchor, Fresh'n'Fruity, Primo, Swiss Maid Calci-Yum and Fernleaf was handled by an older AS400 system, Prism, which was maintained with third party rather than vendor support.

As part of the creation of dairy giant Fonterra, New Zealand Dairy Foods was split off and sold to Graeme Hart's Rank Group.

"Throughout the sale process we signalled the need for this investment [in new software] and discussed the rationale for it," Sybertsma said.

"We found that parts of the Oracle CPG (consumer packaged goods) solution did not suit our business. It was expensive to maintain and support.

"It did not give us the level of integration we wanted so we could not get the level of information we wanted ... It was not a platform for growth.

"This is the first time we've had the opportunity to select the software we want."

JD Edwards New Zealand manager John Speed said the deal was significant for his company. "It's not the biggest deal we did last year by revenue but it is the most strategic - this is a fast-moving consumer goods company in the dairy industry, and that is an important slot in New Zealand and globally."

Sybertsma said the key selection criterion was the fit to the business.

The shortlist included vendors such as Intentia and SAP, although Oracle was not lined up again.

"There were several pieces of software we felt could do the job, but we rated on more than the functionality of the software.

"We were looking for a vendor with a significant presence in New Zealand, for clients which look and feel like we do and for a partnership rather than a consulting relationship," Sybertsma said.

New Zealand Dairy Food has three sites processing 600,000 litres of milk a day: a specialty cheese plant at Puhoi, a milk beverages plant in Christchurch and the giant Takanini plant, which processes cultured milk products, UHT and fresh milk.

Sybertsma said the new system would have about 180 users and cost "close to" $4 million, including hardware and implementation.

The hardware upgrade includes Hewlett-Packard ProLiant 8-way capable servers and an HP storage area network.

The software will run on a Windows 2000 operating system on Microsoft's SQL Server database, and access will be through a Citrix thin client network.

JD Edwards is doing the implementation.

Sybertsma said the company expected to save up to $1 million a year through lower hardware and software maintenance costs and by reducing the company's reliance on outside consultants to keep its systems going.

The financials modules are due to go live on May 1, with order entry following in August and manufacturing in October.

"Order entry is the one we consider high risk - we have one million order lines a month and we can't afford to drop one single line," he said. It would still use Exe warehousing.

Sybertsma said customers and suppliers would see little difference initially, but the JD Edwards system would provide a platform for more electronic dealings.