Supply Chain Management to the Rescue

CIO —

It was an otherwise ordinary Thursday night in February 2008 when Imperial Sugar (IPSU) CIO George Muller got the call. “There had been an accident. People were hurt,” Muller remembers. Some died. “As more and more of the details started to come out, it was horrific.”

In the days following the explosion at the company’s Port Wentworth, Ga., refinery, CEO John Sheptor implored his executives to lead with their hearts, not their heads; efforts focused on helping affected employees and their families. But the $522 million sugar refiner—the third largest in the United States—had customer obligations as well. The disaster destroyed approximately 60 percent of its production capacity overnight. It wasn’t clear when—or if—the plant would operate again.

Imperial Sugar had already weathered some major challenges— bankruptcy, divestiture, new management. The Port Wentworth tragedy was the hardest Muller had faced. “Not too many manufacturing companies can withstand that kind of impact to their business and survive,” he says.

The Georgia refinery remained offline for twenty months. “We didn’t have any safety stockpiles,” says Muller. “We were scurrying to fulfill as many orders as we could.”

Some sugar was imported through its joint venture with Mexican refiner Ingenios Santos, but it wasn’t enough. “We disappointed many customers,” Muller says. He credits supply-chain systems—particularly demand-management software—with helping to make the best of available resources.

In 1998, Imperial Sugar implemented an all-in-one PeopleSoft ERP system, in lieu of best-of-breed software, to manage 20-odd business processes. After several upgrades, it was clear the demand-management module couldn’t handle the complexities of the business. When large beverage and food manufacturers sign an annual contract, Imperial Sugar has to predict how that demand will play out based on seasonal and consumer cycles. “Supply chain is at the heart of our business,” says Muller. “For us, it’s a differentiator. It’s why customers come back.”

In 2006, the company added a bolt-on solution from Demand Foresight: Software that essentially learns how demand ebbs and flows over time. The tool allows Imperial Sugar to see the impact of a wide range of factors on demand, react to changes quickly and track performance.

After the refinery catastrophe, Imperial Sugar needed immediate insight into how many customers it could serve with its available inventory. The software gave them that overview by product line, and its “available to promise” functionality allowed everyone from production to sales to see, in real time, what could be delivered.

Muller won’t reveal how much he spent on Demand Foresight, saying only that it was a “drop in the bucket” compared to his last $5.7 million PeopleSoft upgrade and implementation. “It was our saving grace,” he says. “It took our demand, our inventory and capacity, and the number of new orders coming in and tied it all together. We couldn’t fulfill every order, but we were able to fill more orders than we ever would have had we not had that tool.”

The Port Wentworth plant recommenced packaging operations last September. It now churns out 125 four-pound bags of sugar a minute. “When we knew the first truck was being loaded after year and a half,” says Muller, who is now vice president of administration, “there was a real sense of pride in having been a part of the team that managed our way through tragedy.”

© 2010 CXO Media Inc.