Nobody delivers tasty treats like Harry and David. In 1910, Samuel Rosenberg, father of Harry and David, traded his hotel for 240 prime acres of pear orchards in Southern Oregon’s Rogue River Valley. Now, a hundred years later, Harry and David is a vertically integrated, multi-channel, specialty retailer and producer of premium, gift-quality fruit, food products, and gifts.
Success Doesn’t Grow on Trees
During the Roaring 20’s, Harry and David’s succulent Royal Riviera pears were a must-have treat, but the Great Depression quelled the affluent market and sales dried up quickly. To reach new buyers able to pay for premium brand fruit, the brothers decided to start selling their pears by mail. Soon orders were rolling in again and Harry and David developed into America’s leading direct marketer of high-quality fruit and food gifts.
Over the years, trend-setting ideas such as the Fruit-of-the-Month Club and the Tower of Treats kept Harry and David ahead of the competition, but long-term success doesn’t grow on trees. The recent downturn in the economy hit the company hard and once again forced it to find innovative ways to stay in business. Today it’s not so easy to simply uncap new distribution channels and find new customers. This time, Harry and David looked inward for opportunities to become more efficient and profitable.
Unlike many mail order companies, Harry and David makes, bakes, and grows 85% of its products. “We grow our own fruit, we have our own bakeries, we have our own distribution centers, so everything is pretty much done in-house,” said Heather Krupp, manager of Manufacturing and Warehouse Systems at Harry and David. Doing everything in-house means the company has control over quality, but also makes the business more complicated to run.
Standardizing and Integrating Operations
To ensure its manufacturing and distribution operations function well, Harry and David runs the SAP ERP application. “SAP keeps our processes running smoothly. It allows us to get those gift orders fulfilled and keep up the performance level we need as we ship,” said Krupp. For a company with only 1,000 employees on average, process efficiency and accuracy is vital. And, with up to 10,000 employees during peak holiday season, scalability during those times is critical. “During the Christmas season we can ship 400,000 individual packages out to end customers a day,” said Krupp.
Harry and David had two legacy warehouse management systems that could not support the company’s needs. The software technology and hardware platforms were outdated, and the company didn’t have the resources to support them internally. For six months, Krupp and her team evaluated different upgrade options and new platforms, and decided the best path forward was to implement the SAP Extended Warehouse Management (SAP EWM) application. “The systems that we had in place were aging. We decided to fully integrate our SAP solutions. That gets rid of a lot of interfaces, which is a big benefit to us,” said Krupp.
SAP EWM would also give Harry and David real-time visibility into its warehouse activity. Purchasing could see if it had adequate raw material on hand and fulfillment would know if it had the finished product at the right distribution center to send to the customer – key ingredients to a healthy operation.
Harry and David took great care during the SAP EWM implementation to make sure the system worked well. They stress tested it for peak-season volume and trained employees how to use it. “We had a very smooth implementation. We actually shut the business down on a Thursday evening and we were back up and shipping our first trucks of product on Sunday afternoon,” said Krupp.
SAP implementation partner, LogiStar Solutions, also provided top-notch consulting support and logistics expertise. “We had a great software integration partner in LogiStar. The two lead functional experts we had managed the whole process and really grasped our business model,” said Krupp.
Benefits for the Business and Customers
Now live on SAP EWM, Harry and David is reaping benefits across the company. “SAP EWM has reduced our maintenance cost by about 25%,” said Krupp. And a significant drop in the number of interfaces has added to the IT time and cost savings. “We’ve reduced the number of interfaces from around 50 down to about 12.”
Customers also benefit from SAP EWM. Better food traceability means faster fulfillment and fresher food at the customer’s doorstep. “SAP allows us to see exactly what our product is, what our availability is, and ultimately helps get it to our end customer on time and as efficiently as possible,” said Krupp.
Growing the business without having to hire more staff is another big plus for a company the size of Harry and David. “SAP EWM brought everything under the SAP umbrella without adding staff,” said Krupp.
With SAP in place, Harry and David has the integrated business platform it needs to advance operations and improve the overall customer experience. “The future for Harry and David looks very good,” concludes Krupp. “We are expecting to increase our customer base and continue to grow our company.”