Magazine Article | January 1, 1999

Cooking Up A Better Way To Process Catalog Orders

Source: Field Technologies Magazine
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Betty Crocker Direct Marketing processes over 500,000 catalog orders annually. Investing in a forms processing system eliminated outsourcing costs and reduced the time is takes to process each customer order.

Integrated Solutions, January-February 1999
From a single free teaspoon offer in 1931 sprung one of the longest-running mail-order promotions in America, helping millions stock up on quality housewares. In its seventh decade, the Betty Crocker catalog represents a recognition program that offers quality merchandise at below-retail sale prices. Those who redeem the Betty Crocker catalog points found on more than 200 General Mills products are eligible for these discounts. Today more than two billion General Mills packages carry redeemable points.

The aim of the point-redemption program is not so much to sell merchandise as to reward repeat buyers of General Mills products for their loyalty. The company is committed to delivering merchandise in a timely manner. In most cases, customers receive their items in just two weeks.

To stay ahead in the mail order business, a company must be competitive in terms of quality, service and timeliness. Jodi Cochlin and Cherie Handberg, systems and operations planners for Betty Crocker General Mills Direct Marketing, are responsible for managing all systems operations including inventory, purchasing and payables. Cochlin and Handberg aim to increase order processing efficiency and reduce costs.

Swamped With Catalog Orders
Betty Crocker Direct Marketing typically receives in excess of 500,000 catalog orders annually. Some come in by telephone, but the bulk of the business is done by mail. Customers generally send in the redemption points they've clipped from General Mills products in order to receive merchandise discounts. Betty Crocker services about 25,000 orders each month and doubles that amount during the holiday season. From September through January, the company brings in a number of temporary workers to handle this increased volume.

Outsourced And Out-Of-Pocket
Catalog orders are mailed to Betty Crocker Direct Marketing where teams traditionally pre-processed, opened and sorted the mail. Additional teams were hired at peak times to help sort the increased influx of orders. Data entry was outsourced to a third party. Orders were keyed online to the mainframe and edit checks were performed overnight.

The data file was then routed back to Betty Crocker. If a discrepancy were found, data entry personnel had to first find the hard copy of the questionable order. They then made corrections and reentered the order. Credit card orders were sent to an automated credit validation/approval system. If the credit card were rejected, the order was manually deleted and reprocessed.

"The system was manageable because it was outsourced," says Cochlin. Handberg added, "But we wanted to grow the business without growing our staff and incurring the extra expense." They spent about four to five years investigating technology that would allow them to take over the process. Their main goals were to:

  • Bring the data capture process in house in order to gain added control over the process.
  • Reduce time needed for data entry.
  • Reduce the number of orders rejected during the validation process.
  • Eliminate duplicate entries into the mainframe.
  • Eliminate paper retrieval/handling.

Increasing Business Without Increasing Cost
Handberg and Cochlin were familiar with the idea of scanning orders, but their main concern was accuracy. "We needed a system that would be able to interpret the thousands of handwritten orders we receive each month," Cochlin says. "Of the systems we initially studied, none of them, in our estimation, were up to snuff."

As the technology evolved, a few competitors emerged, including Captiva Software's Intelligent Forms Processing System (IFPS). In addition to IFPS' high accuracy, Captiva Software was able to design a solution to meet the specific needs of Betty Crocker Direct Marketing. Protocols were tailored to work with the company's existing assets and procedures. The system consists of five editing stations, a processing station, a scanning station and an NT server.

Bringing The Process Home
With IFPS, teams receive the mail at 7:30 a.m. each day. They open and sort the mail which then is batched, scanned, edited and sent to the mainframe all in one day. Previously, when orders were keyed in manually, mistakes were noted the next day. Now, validation checks take place up front, resulting in cleaner orders and less time required to process. IFPS scans and recognizes customer information whether it comes in the form of inkjet printing, peel-off laser labels or hand-written orders.

Many of the manual checks are automated, including math calculations, range checks, item number validations, address validation and personalization checks. The edit operators check to make sure the total order amount matches the payment amount.

The Competitive Edge
Since the implementation of IFPS, the number of personnel required to run the system has not changed, so internal costs were not initially affected. However, Betty Crocker Direct Marketing did not have to increase staff to bring the entire process in-house. In addition, they do not anticipate having to beef up the staff with temporary help for the peak season. Their main savings are chiefly due to reductions in external costs.

Rekeying of the orders to the mainframe previously resulted in added cost of operations. Now IFPS catches errors up front in the data capture process before the order gets to the mainframe. Thus, it reduces production costs and decreases error reconciliation time. In addition, the automated system allows General Mills to process orders one to two days faster.

A Win-Win Situation
"We were pleased to find that Captiva was able to fit its system in with the components of our processing cycle that we wanted to keep," says Cochlin. "We didn't have to reinvent the wheel. We just improved it." Adds Handberg, "We've definitely seen an improvement in efficiency. We've literally cut days out of the processing cycle which means orders can be sent out even more quickly. That's a big win not only for the company but for consumers as well."