by Tara Swords
Head to the vitamin aisle in your local grocery, pharmacy, or big-box retailer and you’ll almost certainly find supplements sold under the Nature Made label. It’s a top-selling vitamin brand in the United States, but you could just as easily find it gaining strength in international markets such as Japan, Taiwan, Mexico, South Korea, and China. The company behind Nature Made—and the snack bar brand SOYJOY—is Pharmavite, a 45-year-old company headquartered in Northridge, California. Pharmavite was founded in 1971 by two entrepreneurs, one of them a pharmacist, and today the company makes products that sit in the cabinets of millions of homes around the world.
Headquarters: Northridge, California
Industry: Vitamins, minerals, and supplements
Employees: Approximately 1,300
Oracle products: JD Edwards EnterpriseOne, Demantra Demand Management, Oracle Advanced Supply Chain Planning, Oracle Hyperion Financial Management, Agile Product Lifecycle Management
Vice President of Corporate IT and Business Resilience
Length of tenure: Six years
Education: BS in computer technology, Purdue University
Personal quote/mantra: Focus on the ‘What’ and ‘Why’; only then determine the ‘How.’
Pharmavite, like many vitamin and supplement companies, has been on the receiving end of the world’s growing health-consciousness, as consumer obsession with wellness fuels steady growth in the industry. According to a McKinsey report, the US market grew by US$6 billion between 2007 and 2012 and is expected to grow 5 to 6 percent each year through 2017, both in the US and globally. Today, tens of millions of Americans take a daily multivitamin, and many millions take dietary supplements such as fish oil, probiotics, or glucosamine.
Pharmavite has experienced double-digit growth for much of the last decade, putting it in an enviable position. But growth almost never comes without pain, and for Pharmavite’s leaders, that pain was in the rigidity of its IT systems. A deployment of Oracle’s JD Edwards EnterpriseOne solutions in the early 2000s had given the company a foundation for enterprise resource planning (ERP), but the company had customized so much of the system over the years—along with the many solutions that connected to it—that they soon found themselves stuck.
“The prior team installed the system about eight years ago, and we have been unable to take any upgrades since then,” says Brian Beams, vice president of corporate IT and business resilience at Pharmavite. “In that time, we have doubled and tripled in size.”
Rapid growth tends to make the weak spots show and, for Pharmavite, one such weak spot was the company’s inability to upgrade its highly customized ERP system. Even a simple upgrade would have been an enormous undertaking, requiring IT staff to rewrite code and redo dozens of custom integrations —only to go through the process all over again with each future upgrade.
“It put us in a bad state of affairs for meeting the needs of the business,” says Mike Kuban, divisional vice president of corporate information technology solutions at Pharmavite. “If you can’t upgrade, you have two choices: You don’t do anything, or you continue to customize. We had to get to a position where IT could be business enablers, but to do that, we had to get our house in order first.”
A cross-functional team was created to develop a clear vision for fixing things, but with so many systems affected, they knew it wouldn’t be easy. Pharmavite turned to Oracle and implementation partner CSS International, Inc. (CSS) to help make it happen—and the company is already reaping the benefits.Program Phoenix Takes Flight
Beams and his senior leadership team imagined a complete rebirth of the company’s IT infrastructure, from the data centers to servers to applications. The first step was to lay the foundation. They closed down a backup data center, swapped the primary and secondary data centers, and created a hybrid cloud environment. After nearly four years, they were ready to start work on the enterprise solutions layer. They named this undertaking Program Phoenix, a total business transformation that would take five to seven years.
The idea was to eliminate customization as much as possible—to install off-the-shelf solutions that would allow for fast, painless upgrades whenever necessary. They called it vanillafication, and it meant upgrading nearly 80 applications in their “vanilla” or off-the-shelf form. That way, when the business wanted to make a change, the IT department could support it with agility.Pharmavite Facts
|Number of applications requiring upgrades|
|Number of years necessary to complete the IT transformation|
“Their philosophy was not only to get more scalability, but also to get more flexibility in adapting to whatever the future brings,” says Kenny Ecton, vice president of consumer goods solutions at CSS, Pharmavite’s Oracle implementation partner. “Whether they would be doing an acquisition, going into a new line of business, harvesting new sources of data, or investing in new technology, they wanted to be able to do it quickly and efficiently.”
Beams likens Pharmavite’s JD Edwards system to the tent pole that holds up the whole application infrastructure. That system was at the center of everything, so it would have to be upgraded first. After that, they would upgrade dozens of their other applications, including Oracle Hyperion Financial Management, Oracle Demantra Demand Management, and Oracle Advanced Supply Chain Planning.
Kuban says there was never a question that Oracle was still the right partner for Pharmavite.
“Oracle has been a strong partner for us,” Kuban says. “We’ve had great support, from a service and directional standpoint, and we felt the vision was something that we could get onboard with.”Healthier Data at the Ready
Aside from the inability to take advantage of the latest software releases, another problem was inconsistent data across the enterprise. Data sprawl affected all areas of the company, including finance.
“Finance is often the recipient of everyone else’s transactions, so when things go wrong somewhere else, they always wind up here,” says John Wilson, director of finance and corporate controller at Pharmavite and the program’s business sponsor. “A lot of the problems were due to one system having data one way, the master data calling it something else, then it being called something else in Oracle Hyperion and JD Edwards.”
Pharmavite’s leaders needed not only to make sure data was consistent across the enterprise but also to access it quickly and derive insight from it at a moment’s notice. Because Pharmavite produces consumer health products, it follows strict manufacturing requirements. The company’s leaders need the ability to validate data and ensure that every process is traceable for auditing purposes. They’ll improve this ability with JD Edwards EnterpriseOne One View Reporting solutions, which will provide intuitive, user-friendly reports that will increase productivity and enable decision-makers to act quickly.
“The opportunity that JD Edwards EnterpriseOne One View Reporting solutions are going to bring to us is going to be phenomenal for day-to-day execution,” Kuban says.
These new solutions will enable much better decision-making on the finance side of the house as well.
“I’m really looking forward to having more real-time metrics like daily dashboards, so we don’t have to spend so much time trying to pull data and then create all of those dashboards ourselves just to see where we are,” Wilson says. “When responding to an issue or a change in the business climate, being able to get at your data quickly and effectively is really important.”No More Manual Workarounds
Many of the company’s customizations had led to complex manual workarounds. For example, accounts payable ran on manual processes, requiring paper for invoice approval and matching. Demand planning was also done manually, and then loaded into the Demantra system. A central goal of the upgrade project was to automate these and countless other processes, freeing up employees.
“This will create capacity for employees so we can focus on other value-added work, and their jobs can transform over time into more-analytical roles,” Wilson says. “People can respond to exceptions and focus on insights as opposed to getting bogged down in manual work.”
The newest version of JD Edwards will also enable employees to work from mobile devices, making processes much more efficient.
“We’ll be able to bring other technology into play,” Beams says. “Right now, we have computers on our forklifts, but in the future we could have iPads, iPhones, and smaller handheld devices that will function better.”Ready for the Future
Program Phoenix has already brought about significant change in Pharmavite, and more exciting developments are on the way as the team completes upgrades to its dozens of enterprise applications.
For Kuban, the biggest benefit is that IT now doesn’t just keep the lights on; it plays a very different role in the organization.
“In the past, the business would request something and we’d go do it without really understanding or asking whether it was really the right thing to do,” Kuban says. “But now, we’re creating a relationship where the business sees us as partners. We’re developing our staff to understand how the business executes and what their goals are so we can enable them through technology and systems.”
For Beams, one exciting outcome of the project is that it will enable some innovative uses of technology down the road. For example, he envisions a digital transformation that will change how consumers experience Pharmavite products at the retail shelf—a way to finally connect the work of IT with the end consumer.
“We have different types of shoppers and consumers. How do we create that analytic infrastructure to help determine what we should be doing in the way of advertising, marketing, and education at the shelf?” Beams says. “I’ll know we made it when we start helping our marketing and sales teams with that data. That is where I really want to get to.”
Photography by Shutterstock