Analysis of Kellogg - Databases and Database Application Programs

Analysis of KelloggÐŽ¦s Databases and Database Application Programs

ÐŽ§Consumer product companies have one mission: to build a customer base by giving customers the products they need ÐŽV fastЎЁ (www.sap.com). In order to achieve this mission, real-time sales information needs to readily available of analysis. The purpose of this paper is to illustrate what databases Kellogg Company currently uses at their Wal-Mart field sales office, in order to build a customer base and provide customers with the products they need. In addition, the paper will explain what database application programs are utilized when working with the databases.

Kellogg Company Background Information

ÐŽ§With 2004 net sales of nearly $10 billion, Kellogg Company is the worldÐŽ¦s leading producer of cereal and a leading producer of convenience foods, including cookies, crackers, toaster pastries, cereal bars, frozen waffles, and meat alternativesЎЁ (Kellogg Company 2004 Annual Report). Their business goals in 2005 include growing their cereal business and expanding their snacks business. In order to achieve this, KelloggÐŽ¦s will need the assistance of numerous information systems to ensure that sales forecasting is accurate, budget goals are met, trade spend is on target, and business is trending in the right direction.

The databases and database applications that are utilized the most at KelloggÐŽ¦s are:

„« Wal-MartÐŽ¦s custom data warehouse ÐŽV Database

„« DB2-Database

„« Retail Link ÐŽV Database Application Program

„« SAP-Database Application Program

KelloggÐŽ¦s Databases

ÐŽ§A database is a collection of data and relationships between the data stored in secondary storageЎЁ (Nickerson, 2001, p 114). At KelloggÐŽ¦s Wal-Mart field sales office, they employ the use of Wal-MartÐŽ¦s custom data warehouse and DB2 databases.

Wal-MartÐŽ¦s custom database

Wal-MartÐŽ¦s custom database is the worldÐŽ¦s largest database. The vendor supporting this database is NCRÐŽ¦s Teradata division. NCR ÐŽ§is a primary thought leader for active data warehouses and a paradigm shift toward trickle feeds and event-driven exploration. Application servers, message-based middleware, and business rules engines are tools of the trade for next-generation data warehousesЎЁ (http://www.intelligententerprise.com/040101/701dozen1_11.jhtml). Not only is this system used as customer CRM system, but is the base for Wal-MartÐŽ¦s Retail Link decision-support system that is utilized by Wal-Mart and their suppliers, such as KelloggÐŽ¦s. Wal-MartÐŽ¦s database gives Wal-Mart the ability to make critical business decisions based on real-time information. The only problem is the real-time information does not get inputted into Retail Link until the following day. Therefore, KelloggÐŽ¦s data retrieved from Retail Link is a day behind and can cause problems which will be noted later in this paper.

DB2

DB2 is one of the worldÐŽ¦s leading relational database management systems that assist small orgainizations as well as large global enterprises meet their business demands (http://www-1.ibm.com/solutions/sap/us/en/db2). At KelloggÐŽ¦s the DB2 database platform is utilized by their SAP system. The DB2 database ÐŽ§reduces the complexity of data management by eliminating, simplifying and automating many task traditionally associated with maintaining an enterprise class databaseЎЁ (http://www-1.ibm.com/solutions/sap/us/en/db2). At the current time, there does not seem to be a need to improve or change the current database used by KelloggÐŽ¦s SAP system. The problems KelloggÐŽ¦s deal with is more related to SAP rather that the DB2 database. These problems will be discussed in later portion of this paper.

KelloggÐŽ¦s Database Application Programs

Database application programs allow users to manipulate data available in databases. In the case of KelloggÐŽ¦s, they utilize Retail Link when manipulating data stored in Wal-MartÐŽ¦s custom data warehouse. In addition, they use the SAP system to work with data in the DB2 database.

Retail Link

Retail link is a tool that is provided via Wal-MartÐŽ¦s custom database to all customers that service Wal-Mart. There is a multitude of information available to all suppliers, and can be used with much detail to drive business needs. For example, Retail Link provides suppliers with a forecast by item, by store for their planning purposes. The data is drilled down to store level to improve forecast accuracy, and ensure 100 percent in-stock levels at stores. This information is important in the production planning process at KelloggÐŽ¦s to improve efficiencies and increase cash flows. KelloggÐŽ¦s manufacturing facilities uses this information to schedule production runs. Since Wal-Mart is over 20 percent of KelloggÐŽ¦s business, this is an advantage to have this data available.

Retail Link also provides store and item level sales information to suppliers. At KelloggÐŽ¦s, this information is used as a planning tool for promotions. Generally, a promotion at Wal-Mart must deliver 2 million dollars in sales to hit Wal-MartÐŽ¦s goals. The account managers can specify the items that are going to maximize sales and deliver the goals that Wal-Mart sets for the promotion. In fact, account managers can customize promotions for different stores so the stores are receiving the best selling Kellogg items. In addition, Retail Link provides demographic information to support these promotions. For example, Retail Link identifies stores that have a high index of Hispanic consumers. KelloggÐŽ¦s can then research the best items for this demographic, and ensure the correct assortment of products are sent.

Although Retail Link provides detailed and extremely useful information, it is not without opportunities. Retail Link provides customers with information on a daily basis. However, the day the customerÐŽ¦s receive the information, it is actually a day behind. For example, for customers that manage distribution