In 2000, Binggrae implemented an ERP system based on Oracle E-Business Suite. The system enabled the company to innovate food manufacturing processes, and provide branch offices, agencies, retailers, and wholesalers with accurate data about its dairy product range. The Oracle ERP platform is still in use 10 years later. In July 2010, Binggrae decided to make better use of the data produced by this system, by implementing a business performance management system that could be easily accessed by senior executives and frontline staff. The company had been using Oracle Financial Analyzer as an accounting management system but wanted to introduce new analysis functions that would help executives develop detailed sales and business plans, and track the performance of its divisions and products. It also wanted a user-friendly system that could be leveraged by senior executives and frontline sales staff.

Binggrae selected Oracle Hyperion Planning and Oracle Business Intelligence Enterprise Edition to build its new performance management system. The system enabled the company to track, in real-time, the actual sales performance of its product teams (including the ice-cream, milk, yogurt, and snacks teams) by region and the performance of food products against set targets. The system also tracks sales performance by quantity, price, channel, operating division, and product on a monthly and annual basis. Sales staff (typically those who sell to retailers and wholesalers) can use the Oracle Business Intelligence dashboard to check the profitability of each product. If profits fall, they can quickly take action to reverse the trend by suggesting new ways to boost sales during monthly planning and review meetings. Sales and managerial reports can be run at any time on any product or division. This data can be transparently shared and analyzed, enabling sales staff and senior executives to stamp out any abnormal business activities.

Analyzing sales data on a regular basis empowers Binggrae to take action when it spots an emerging trend. For example, if there is a sharp spike in demand for ice-cream because of exceptionally hot weather, the company can design business plans to take advantage of this demand. More recently, the company had to adjust business and production plans in response to an outbreak of foot-and-mouth disease among the country’s cattle population.

The use of Oracle Hyperion Planning helps Binggrae to respond quickly to changes in the business environment, by reducing the time needed to develop business plans from 14 days to 3 days. The company can formulate plans that take into account feedback from frontline sales and general trends in the market. Executives can also use a simulation function to project outcomes from different scenarios, ensuring plans are designed for the best possible result.

Binggrae uses the Oracle Hyperion,Oracle Business Intelligence system to produce statements of the company’s financial position and to calculate the economic value add of each food division. The system enables the company to aggregate accounting data from the integrated Oracle ERP platform to uncover details, such as the operating profit and margin for each division and product. This information can be analyzed using the Oracle system or imported into a Microsoft Office application, such as Excel or PowerPoint.

The Oracle Hyperion, Oracle Business Intelligence system incorporates K-IFRS requirements. (K-IFRS is a word-for-word translation of the full International Financial Reporting Standards issued by the International Accounting Standards Board, and its adoption is mandatory for Korean companies that are listed beginning in 2011.) Because this system is integrated with the Oracle ERP platform, the changes in business management that were the result of K-IFRS were immediately reflected in the Oracle ERP system. This meant Binggrae did not have to spend time and money applying the K-IFRS requirements to the Oracle ERP system.

Binggrae has improved management by providing a dashboard that facilitates intuitive analysis and encourages all staff, from salespeople to senior executives, to undertake their own reporting. For example, sales staff can create performance reports on the products they manage, while senior executives can generate key performance indicator reports on their divisions.

Monthly executive meetings have become efficient, as participants can produce reports in real-time and display results on the dashboard. In addition to eliminating the need to prepare paper reports, real-time reporting ensures meetings are dynamic and information is always at hand to inform sales strategies.

“At Binggrae, everyone, from worksite staff to executives in all divisions, are engaged in querying, analyzing, and reporting management performance, making full use of the system’s strengths,” said Chang-hoon Park, managing director, Department of Finance, Binggrae.

The company is now looking to introduce new capabilities, such as enabling staff to simulate the effects of variables, such as interest rates, exchange rates, and the cost of raw materials, on production costs.