SAN FRANCISCO -- Del Monte Foods Co. here is testing an on-line, computerized system for deduction management it says will speed the process and permit its brokers to handle most it.
The pilot with its largest broker, Food Enterprises of New York, Fairfield, N.J., is proving that with the right tools, responsibility for deduction clearing and administration can largely be transferred to the people who deal directly with accounts, said Ron Sheaves, manager of claims and accounts receivable at Del Monte.
"Because our brokers execute the promotion programs with our customers, they are most knowledgeable about why a promotion-related deduction was taken," he said.
With on-line access to Del Monte's deduction tracking and resolution system, brokers will be able to review deduction information, enter comments and resolve deductions from their own offices. This will trim administrative costs and allow retailers to be credited faster.
"Our people in-house were processing the deductions. Now this activity will be put into the hands of the brokers," said Sheaves. Historical tracking indicates that 80% to 85% of the 1,000 or more deductions Del Monte receives in an average week are trade promotion-related, he said.
"In most deductions we end up issuing credits to the customers because they are entitled to them," he added.
Using the on-line system, Del Monte's brokers will be empowered to clear most deductions, within prescribed promotion programs and funding guidelines, said Sheaves.
The company is committed to extend the on-line capability to all 57 Del Monte brokers nationwide by June or July, said Sheaves.
Jean Briggs, account coordinator at Food Enterprises, who has been working with the new Del Monte system since the beginning of the year, is already won over.
"It makes me more productive," she said.
"To me the most necessary part is my being able to check to see that those credits that I am applying are still open," Briggs added. "I can go into any one of the records for our accounts. It will show me every credit against their account, and every deduction that is open and needs processing."
She added: "My job is involved with working with deductions and managing merchandising funds. I can see if this were to become something that other principles were using, in the time saved I could handle another one or two principals."
Sheaves said that the rollout awaits only the resolution of some technical, data-security issues. Del Monte's supplier, Chi/Cor Information Management, Chicago, is working on it.
"In our initial pilot we weren't able to restrict information access to an individual broker," said Sheaves, explaining that Del Monte is committed to ensuring that each broker have access only to his or her own accounts. "Chi/Cor has created some broker security software that we are going to be installing. Then we will expand to the other brokers."
The on-line system is an enhancement of Deduction Management System, or DMS, a Chi/Cor software application that Del Monte has been using for two years or so. DMS is designed to manage and electronically communicate deduction information to brokers.
Under the existing system, each broker is provided with a weekly report listing all open or outstanding deduction claims, each with aging information, similar to an accounts receivable report.
"Nothing over 120 days is our objective," said Sheaves, who added that this goal was so important that Del Monte has tied it into its broker incentive payments.
Through DMS, deduction reports are currently distributed electronically each Monday using what he called an archival retrieval system, or SAR. Brokers may dial in and download those reports to their computers, but SAR is not interactive.
For the brokers, said Sheaves, the on-line system enables them to conduct search activity within the deduction system. "This currently generates a tremendous amount of record-keeping and paper," he said.
