As Published In July/August 2006

Brewing Good Business
By Michael Miley

Green Mountain Coffee Roasters uses PeopleSoft to deliver the ultimate coffee experience.

Green Mountain Coffee Roasters (GMCR) is serving its customers and sales force today and brewing big plans for its future. The IT team at GMCR recently implemented new tools for sales force automation and expects to deploy campaign management tools to sharpen marketing intelligence, outfit an e-commerce Web site with new and innovative products to enhance consumer-direct sales, and update GMCR's supply chain and financial systems before year's end. It seems like a lot to accomplish, but this team has a lot of experience with systematic deployment of Oracle's PeopleSoft applications.

"Since 1997, we've been engaged in a strategic, business-process-by-process rollout of integrated PeopleSoft products for supply chain management, financial management, enterprise performance management [ERP], and customer relationship management [CRM]," says Rod Ely, system architect and development manager at GMCR. "Tools for enhancing sales and marketing are just two of the more-recent functions we're putting into place to drive new business. But we couldn't manage that growth efficiently had we not built our infrastructure carefully over time, with an eye to the needs of the entire business. Our goal has always been to support within one system, one data model, all the ways that we strive to deliver the ultimate coffee experience to our customers. That's what's evolving at GMCR today."

Born from a coffee shop with a small roasting operation in Waitsfield, Vermont, the company now serves more than 4 million cups of coffee a day and sells nearly 20 million pounds of coffee a year. A leader in the specialty coffee industry, GMCR's revenue is largely derived from its wholesale operations. It sells most of its coffee through resellers—restaurants, supermarkets, specialty food and convenience stores, hospitality and food service, and office coffee services. It also operates a direct mail-order business and a Web site where customers can buy coffee and coffee-related products. For the past three years, Forbes has recognized the socially and ecologically conscious company as one of the "200 Best Small Companies" in America, a reputation it has worked hard to achieve.

GMCR's IT team supports the business by "working smart." Moving from homegrown supply chain and financial applications housed in a Btrieve database to PeopleSoft products running on an Oracle database, GMCR took its first steps in 1997 to implement an integrated ERP solution with broad functionality that could both manage its coffee production and distribution processes and drive its growth.

"The first group of apps we deployed included PeopleSoft General Ledger, Purchasing, Accounts Payable, Inventory, Production Management, Cost Management, Bill of Materials, and Routing—the purchasing and receiving side of finance along with the general ledger," says Ely. "At the same time, we brought up the manufacturing modules so that we could build inventory and push it to finished goods. We were the first live customer on PeopleSoft Manufacturing at that time. A year later, we implemented Accounts Receivable, Order Management, and Billing, followed in 1999 by Human Resources, Mail Order, the PeopleSoft eStore, and Asset Management."

Snapshot Green Mountain Coffee Roasters www.greenmountaincoffee.com Location: Waterbury, Vermont Annual revenue: US$161 million Oracle Products: Oracle Database; Oracle's PeopleSoft Customer Relationship Management, PeopleSoft Enterprise Performance Management, PeopleSoft Financial Management, PeopleSoft Human Capital Management, PeopleSoft Supplier Relationship Management, PeopleSoft Supply Chain Management

The company has steadily added more PeopleSoft applications critical to its business, even as it worked to be rock solid on the earlier modules. GMCR added PeopleSoft Stock Administration in 2002; Production Planning and Online Marketing in 2003; and upgrades to CRM, Human Resources, CRM Sales Lead Tracking (a new warehouse control system/distribution center), and a new consumer-direct Web site in 2004. "We're up on more than 20 PeopleSoft modules today," Ely says.

It's been quite a journey, one that began with deploying tools for optimizing accounting, while building more control over inventory in raw materials and pushing more out to finished goods.

"Other benefits in the early stages of our enterprise planning project included more-timely order management and billing; greater analytic visibility for accounts, balances, and receivables, since everything was on one system; and the reduction of losses in raw materials, since transactions taken right on the manufacturing floor could be more accurately accounted for," says Ely. "When our Production Planning kicked in, the bill-of-materials explosion—along with production routing—were feeding our purchasing requirements and our production capacity scheduling by work area based on what the system saw for demand and scheduled production netted out against inventory. It gave us what we needed to coordinate our daily production plan with a set of tools and processes that would scale easily as we grow."

GMCR's online marketing CRM activities include a consumer newsletter that goes out to 80,000 consumers each month. "With that tool, we can dynamically create content in the e-mail to our consumers, based on their preferences as coffee purchasers," says Ely. "We can tell if a consumer is interested in flavored coffees, decafs versus regular, fair-trade organic—or if they own one of our single-cup Keurig brewers, they need K-Cups to brew."

GMCR redesigned and launched its consumer-direct Web site in 2004. "The Web site provides excellent 24/7 convenience for our consumers while not requiring more call-center reps. In fact, the new system capability in the consumer-direct business has been a key enabler, more than doubling the sales in two years, while dramatically improving our net profit," he says.

Next Steps READ more about Oracle's PeopleSoft Enterprise applications LEARN more about Oracle Applications DISCOVER Oracle Fusion

With 350 employees now on the PeopleSoft systems, GMCR went live early this year with a sales pipeline management project for about half of its sales force, so salespeople can access its PeopleSoft CRM applications from a browser on their laptops. IT is also putting an enterprise data warehouse in place to offload data from the operational system and to provide the historical data for PeopleSoft Demand Planning modules being put into place. GMCR has also launched a marketing campaign management project, adding PeopleSoft tools to drive even more leads into its wholesale business, while ramping up consumer-direct marketing and sales.

The upshot of these software implementations is improved profitability. "When we implemented the first module of PeopleSoft, we were about a [US]$20 million company," Ely says. "We're at $160 million now. Three years ago, we were in the top 10 performers on NASDAQ. We'd gone from less than US$10 a share to more than $60 in about a year."

The merger of Oracle and PeopleSoft has also brought benefits to GMCR's IT strategy. "Now that we have one vendor that can cover everything from database through application server to applications, we're expecting even better total cost of ownership out of that relationship," says Ely. "Indeed, we're fully in gear to implement the rest of PeopleSoft CRM in the enterprise and are poised to phase in the upgrades to Oracle Fusion—to benefit even more from the efficiencies gained from our integrated PeopleSoft functionality."