The Journey ConAgra OTM Implementation

Ryan Oswald

Amy Smith Dawn Wilson

ConAgra Foods, Inc

Agenda

• ConAgra Overview • Reasons for OTM Implementation • Timeline • Implementation Approach • FTI • Rate & Award Maintenance • Master Data • Alerts & Notifications • Freight Pay/Finance • Challenges and Opportunities • Future Enhancements

ConAgra Foods Overview

• ConAgra Foods started in 1919 as Nebraska Consolidated Mills • In 1971, it was renamed ConAgra, Inc. and the company

became ConAgra Foods in 2000 • ConAgra Foods is a Fortune 500 company with more than

23,000 employees, with the company’s world headquarters located in Omaha, Neb

• In fiscal year 2012, ConAgra Foods brought in $13+ billion in net sales

Our Brands

Consumer Foods •ConAgra Foods is one of North America’s leading food companies, with brands in 97 percent of America’s households •25 of these brands are No. 1 or No. 2 in their category •19 of these brands generate more than $100 million in retail sales each year •ConAgra Foods offers 140 meals for $3 or less •ConAgra Foods sells nearly 12.3 million packages of food products each day, including 3.8 million frozen food packages.

Reasons for Implementing

Legacy Systems Outdated

Optimization Opportunities

Fusion Transportation Intelligence

Inbound Freight Management

Material Allocations

Rail & International Planning Centralized

Timeline

Aggressive timeline: Two years from blueprinting to implementation

Phase 1 Go Live June 2011

Design Aug 2010

TMS Selection May 2010

Blueprinting June 2009

Implementation Approach

Phase 1

• Inbound to 4 Plants and Consumer Rail • June 20, 2011

Phase 2

• Outbound Stock Transfers & Customer • July 25, 2011

Phase 3

• Remaining Inbound • January 9, 2012

Phase 4

• Customer Pick Up • June 11, 2012

Implemented in four phases

Implementation Approach

Following modes now planned in OTM

Truck LTL IM

Rail (new)

Ocean (new)

CPU (new)

FTI – Operations & Procurement

• Standard Reports – OTD – Route Guide Compliance – Rate Inquiry – Load Planner Scorecard – Freight Cost Reporting – Carrier Scorecard

• Adhoc Reporting

Alerts & Notifications

• Supplier – Pickup notifications

• Insurance Certificates – Notification to carriers and procurement

• Event management – Missing statuses

• Rate Pages – Auto generated report

Rate & Award Maintenance

• OTM UI Rate Maintenance – Cumbersome at best – No lane integrity to match to award

• Awards – Business model requires Capacity Commitments – Maintenance is nearly impossible through UI – Overrides?

• Developed web based tool outside of system – Tool populates & loads .csv files through integration

Master Data

Master Data maintenance is full time job • Rail

– Routes, itineraries, rates • International

– Itineraries, accessorials • Inbound LTL

– Transits • Customer calendars • Inbound raw materials • Commitments

Freight Pay Systems

Pre-Go Live • SAP

– Orders (Customer) – Orders (Supplier-unplanned inbound) – FI – AP & G/L – BI Reporting

• Preferred Carrier • HUB • Manugistics

– Movement – Freight Pay – Chrystal Reports

• Walker Procurement & AP • Oracle G/L • Access Databases

Post Go Live • SAP

– Master Data (Cust./Mat./Vend.) – Orders (PO/STO/SO) – FI (AP & GL) – BI Reporting

• OTM – Order base – Shipment – Invoice – FTI Reporting

• MarkView Workflow (TransQ)

Internal Use

E2E Process – Finance Dependency

Order Creation • Master Data • Customer • Plant • Vendor • Material

• Order • PO • STO • SO

Trans - Planning • Rate Offerings • Awards • Modes • Lanes • Itineraries • Bulk Planning

Trans - Execution • Tendering • Status • Delivery • Returns

Settlement • Invoice Receipt • Match • Approval • Voucher • Payment • AR Inquiry

Finance Reporting

Budget Standards Metrics Reconciliation

Accounting/Finance Material Ledger

Accruals Cost Allocation Assessments

Dynamic Dialogue/Challenges

• Cutover Plans – Order Create date or ship date – Conversion of transactions or “bleed out” – Business and Carriers transacting in two systems – Clean cut-off for deferred/incurred vs. reconcile

• Implementation – Master data, master data, master data – Automating manual and disparate steps – Defining standards, exception processes and fixing errors – Transitioning ad-hoc and database reporting to centralized

‘business intelligence’ structure

Finance Change Management

• Communications and training for Carrier AR – Coordinating EDI IT resources for EDI 210 transmission

before, during and after cutover(s) – Documentation and delivery of training for access to web

portal for invoicing, attachments and payment status • Internal business partners

– Preparation for accounting impacts on planning, processing and reporting

– Collaboration with procurement and supply chain • Training for plant buyers – inbound transportation • Introducing workflow for invoice exception approvals • Communicating with carriers on e-commerce changes

Accounting Highlights

Accrual •Point in Time • IB Ship Date •OB PGI

Allocation •Actual Cost •Material Level •Weight & Cube

Voucher • Invoice

Approval •SAP PI &

Payment

Costing •Material

Ledger •Assessments

Challenges/Opportunities: • Moving from more generic allocation of costs to specific by material

weight/cube • Change management business alignment with budgeting/accounting design

changes • Difficult to correct transaction data errors and reconcile financial timing

differences between systems/GL and reporting.

Reengineering Freight Pay

Freight Related Invoice

Is Order Ref. in SAP PO or

STO?

Is Invoice for Mills or Rail?

Is Invoice for Return or

Detention?

Is invoice Freight Forwarder, Ocean or

International?

EDI or Web Invoice from

Carrier

Clean to Voucher?

Post to Walker for Payment Process

Is MBOL in Manu?

Chack Status Error (10,19, 29, 39, 69)

and manually get additional

approvals/documents

Use SOP & Spreadsheet

to track, email, get additional approvals

Manually audit/enter in Database

& Walker

Manually audit/enter in Mills

Freight Pay Sys.

Send to Imaging for PO Queue

Send to Imaging for

NonPO Queue

Posted to SAP AP for Payment

Processing

Unplanned Freight on

Supplier PO

Record on spreadsheet and go into SAP to change due date base on carrier terms

Route for G/L coding & Approval

PO

NonPO

YES

NO NO

Manually edit/match/approve invoice in Manu

YES

NO

NO

YES

YES

NO

Freight Related Invoice

Scan, Index & route to FP specialist in

TransQ

Match to shipment in

OTM?

Manually (match/edit)

invoice & Approve in

OTM

Route for additional

approvals or edits to

shipment

Voucher to SAP awaiting

terms & payment process

EDI & Web Invoice from

Carrier

Auto Match to Shipment in OTM &

Auto Apporved

YES

YES

NO

NO

From six decision points To two and

From three invoicing systems to One

Kofax-Non SAP Freight (Workflow)

Freight Pay • Invoice Sourcing / Automation

– Activity Summary prior day, week, month

• Invoice Blocks – Invoice Errors / Tolerance Summary

• Delivered Shipments without Invoice – Carrier Open Accrual

• Ad hoc Query – Actuals by cost type (detention,

unloading) • Enhance – FP/Carrier Scorecard

Finance • Open Accruals

– Delivered Shipments, without invoice or with balance dues

• Plan to Actual – Performance – Forecasting – Compliance

• Enhance - Reconciliation – Transactions reconciled

between systems landscape

Freight Pay FTI Reporting

Before

Paper • Invoice audit manual/e-mail • Key into Manu

Ship • Load Planner notes for pre-

approvals “unplanned items”

Auto • Approvals >75% • Error Statuses in detail

Pay

• Accrual reversed @ invoice • Fewer “clicks” • Delegate Exceptions

After

Paper • Index/route MarkView • Key into OTM / close MVT

Ship • No Notes / unplanned items must

be coded on shipment

Auto • Approvals ~70% • Query & Status Indicator

Pay

• Accrual net reversed @ 6/36 mo. • No short pay • Req. Unloading Receipts

Challenges/Opportunities: • Use Line Item Tolerances without creating unnecessary blocked invoices. • Integrated screen to see planned shipment costs, applied actual costs by

line item when manually approving invoices. • More shortcut keys to process faster.

OTM – FP Processing Impact

Challenges & Opportunities

• Rail • FTI Reporting • Awards and Load Balancing • System Performance • Master Data • Change Management

Future Enhancements

• Cooperative Routing • Business Monitors • FTI • Automating Rate Pages • Screen Sets • Performance & Optimization • Rail Umler & CLM’s

Q&A

Questions