Case Study: Ferrero USA

Ferrero SpA is an Italian founded and headquartered family-owned confectionery company. The company is one of the top five confec-tionery companies worldwide with annual sales in excess of EUR 4.4 Billion. In the United States, the company is well known for its market leading Tic Tacs® breath mints and Rocher Hazelnut Chocolates® brands. These products are widely distributed through the United States’ largest retailers.

Prior to use of Cforia’s Software, Ferrero USA had a good DSO number of 27 days, which was attributed to a 2% cash discount to customers who pay within 10 days of receipt of goods. A bigger problem for Ferrero USA was numerous deductions taken by large retailers. Most vendors to these large retailers have experienced the plethora of deductions stemming from delivery times, EDI communications and other minutia specified in the onerous terms and conditions section of Purchase Orders. Mining inappropriate deductions was further complicated by a distribution channel that has brokers originating 40% of the overall sales volume. Before automating with Cforia’s solution, numerous manual meth-ods including Outlook Calendars, Post-It Notes, aging reports and Excel spreadsheets were used to manage a Collections Agent’s day. Follow up correspondence was done only for extreme cases using MS-Word Templates accompanied with a stroll to the facsim-ile machine. The majority of a Collection Agent’s day was spent leaving messages for creditors who were hiding behind their voice-mail.

Solution

Cforia Software’s MC2/MD2 collection/deduction platform was pur-chased by Ferrero during 2004 and installed on its accounting system within a one week implementation and training service en-gagement. Ferrero transitioned from AS/400 to SAP 4.7 in 2007. They were able to Go-Live simultaneously with SAP and a Cforia connector that tied into their new ERP.

“Cforia’s Deduction Collaboration Portal enables our team work with direct sales and brokers who are onsite with our customers. They are able to verify compliance with trade fund promotions. Since going live with Cforia, we have recovered $1.6 to $1.8 million annually in un-earned deductions.” Michael Hamalak, Credit Director

www.cforia.com

Key benefits of this project include:

Decreased an already good 27 DSO down to 25 Allowed Ferrero USA to avoid hiring replacements

for two A/R persons who retired during the first year after Go-Live

Has supported subsequent company revenue growth of 25% without adding headcount

During the first and subsequent years after Cforia installation, Ferrero’s Deductions Department has averaged $1.6 – 1.8M annually in successful rebilling inappropriate deductions taken by large retailers

DDO was reduced from 100 to 44

Customer Comment:

Michael Hamalak, Credit Director

“During the first year after going live on Cforia, I had two staffers leave my group. After querying the team about their ability to handle the workload, we decided that we could proceed without hiring replacements. Business volume has grown by 25% since then, and we still have not added headcount.”

The key features of the solution are: Real-Time Integration using Cforia’s SAP Certified

Connector Real-Time Integration with email and fax server Cforia MC2/MD2 Collections, Credit and Deductions

Automation Platform Cforia Deductions Portal used to collaborate with

internal sales and independent brokers

Case Study: Ferrero USA

www.cforia.com