BPM Magazine: You implemented a hosted BPM software system last December. What motivated you to change your planning process?

Kent Wegener: The first thing we were looking to achieve by utilizing Host Analytics — which we thought would make a big difference, not only in terms of the integrity of the budget, but also potentially in terms of helping us drive more efficient supply-chain decisions — was to forecast in quantity. Now we budget in case volumes, in addition to dollars. Our previous budgeting process, in Excel, was simply a dollar-based revenue forecast. And because of the unwieldiness of Excel, we did not have the field sales organization forecasting.

So two big differences, right off the bat when we started using Host, were that we could add in case volumes and we could drive the forecasting down to our individual sales regions. We also wanted to add in the customer dimension. In our previous Excel process, we had a product dimension only. Now, within our new process, we also have a customer dimension.

BPM: So previously, was the finance department doing all of the forecasting?

Wegener: We were not doing it. What we were doing in finance was setting up the Excel templates and passing them over to certain folks who were knowledgeable about particular channels of business. For example, our largest channel of business is food service; the marketing department was forecasting food service. We have a military business, and our military sales leader was forecasting that one.

BPM: And now you have the actual salespeople forecasting their territory?

Wegener: Yes. First, we have a strategic planning process that sets an overall growth objective for the year in all of our channels. This year Joel seeded the Host budget with the growth expectation from that three-year strategic plan. Then marketing went into Host and added new products that they planned to introduce to support the growth objectives and subtracted out the products that they were planning to discontinue. After that was done, the lowest level of sales management tweaked that based on the information they had. Then the budgets rolled up to the next level, they had a review — an adjustment and sign off — and it rolled up to the next level.

BPM: How have these process changes led to more accurate forecasts?

Wegener: We’re in a period in our business where food commodities — corn, oil, eggs, chocolate, wheat — are undergoing a large amount of inflation and volatility, so it’s important for us to be able to change pricing assumptions up to the very last minute in the forecasting process. This year, rather than try and get every salesperson to forecast based on a pricing-increase assumption, Joel handled that at the top level by doing an overlay of new pricing actions that the sales organization might not be aware of. It was a shortcut, doing it at the top level, and we were able to generate a more accurate budget. We were making adjustments for pricing all the way up until a few days before we had to finalize our budget.

BPM: How has the better forecasting process benefited your business?

Wegener: One key area is in our muffin plants. We’re operating at a high-percent capacity utilization in our three muffin plants, and during this year’s budgeting process, we were concerned about whether we would have enough capacity to meet the growth in demand. One of the key benefits provided by this new budgeting process was to get a more definitive idea of timing as to when we actually had to plunk down a very large dollar investment. That was definitely an immediate benefit, that it allowed us to plan a major capital outlay.

Joel Feldman: That’s obviously a big strategic win. On a smaller, tactical level, by having a little more detail on the customer and the product side, we were able to avoid having manufacturing plan for obsolete items. In the past we’ve kind of peanut-buttered things down, but because this year we were able to exclude obsolete items from the budget, we’ve done a better job of pulling the production out of obsolete items. That should result in throwing away fewer items moving forward.