Sun World using data analytics to reduce costs, build efficiencies
by Tim Linden | August 01, 2010
Gordon Robertson, vice president of sales and marketing for Sun World Inc. in
Bakersfield, CA, said that he used to have to wait until the end of the month
or even the end of the quarter to get a thorough picture of sales department
figures. Today, he pulls up a screen on his computer and has instant access to
the sales numbers as well as how profitable each sale was measured against
the exact cost of producing that product.
"This is an invaluable tool for us," he said. “You can take data and turn it into
action today. I don't have to wait 30 days after the fact to find out what was
Sun World recently announced that it was working with IBM analytics
technology to improve crop yields, reduce waste and expand its customer
base, while providing more cost-effective and energy-efficient harvesting
Mr. Robertson said that the company has been computer savvy for many
years and has been capturing a lot of data. Now it has the capability of using
those data in real time to affect its decision-making on many fronts including
what it sells and to whom.
Although he would not give exact examples of sales, growing or harvesting
decisions that have been changed because of this new application of
technology, Mr. Robertson said that the firm’s Midnight Beauty grape harvest
offers a good example. “We sell a lot of these grapes to Australia, which is a
good market for us. Looking at the data, I can see patterns in real time. It is
helping me manage the crop. I know when it is the right time to sell.”
He said that the data analysis has helped the sales staff focus its efforts when
handling this variety on the more profitable channels. “Data is driving our
decisions,” he said.
Mr. Robertson added that the information has led to reduced costs and
increased efficiencies in many areas of the company’s operations. Sun World
operates one of the top proprietary produce variety development programs in
the United States, generating more than 60 commercial varieties. It grows an
array of table grape, pepper, stone fruit and citrus varieties on 12,000 acres of
farmland across California.
Facing ever-changing variables in consumer trends, weather, labor, fuel costs
and water management, Sun World turned to IBM and Applied Analytix for a
solution to better collect, track, interpret and disseminate real-time
information on everything from crop management to managing sales. Mr.
Robertson said that Sun World is using this information to improve its insights
into crop yields, farm labor costs, water usage, growing patterns, and a wide
range of sales and distribution processes. He said that the company has a
better understanding of how to allocate its labor force and to properly allocate
its natural resources.
“We’ve aimed to transform the company culture from a farming business
where you 'grow and hope for the best’ to one that uses information analytics
to provide an accurate measurement of the business,” Steve Greenwood, Sun
World’s director of budgets and reporting, said in a July 21 press release.
“Before, we didn’t know until 30 days after the month how our harvest costs
were trending. By that time, it was too late to start financial planning because
the crops had already been harvested. We’ve turned raw data into business
insight, improved our order fill rates and have gone from being a reactive
company to a proactive company.”
Mr. Robertson said that the use of these data has enabled Sun World to
employ smarter farming practices. He pointed to data released by the
company that showed careful analysis of its irrigation systems and patterns,
which has resulted in an 8.5 percent decline in water use per unit since 2006.
The same type of analysis has been used on the activities of the labor force to
optimize its efforts. Using data analytics, the company can measure the exact
growing, harvesting and distribution cost differentials between varieties. Mr.
Robertson said that the firm can now focus its resources on those varieties
generating the highest returns. Again, he would not specify what decisions
have been made because of these data, but he said they are being utilized as
the firm determines its upcoming planting strategies.
The company press release on the subject claims that it realized an 8 percent
efficiency increase in farm labor by analyzing man hours and focusing
resources where needed and when needed. During the same measurement
period, the company has seen its use of fuel decrease by 20 percent by
measuring equipment usage and matching the proper-sized equipment to
the proper application. The use of smaller equipment and modern fuel-
efficient models is the result of having greater insight into its operations.
Mr. Robertson said that the data have helped his team change its sales
practices. Because it has more information and better tools to forecast future
production, Sun World is building more sales programs ahead of the season to
ensure the right product mix is sold to the right market. The press release
noted that key segments of Sun World’s customer base have increased in size
by more than 20 percent year to year while generating more than $3 million in
new business in 2009.
In a nutshell, Mr. Robertson said that Sun World is leveraging this new data
analysis “to evaluate and manage our business much better. We’ve been able
to grow the core segments of our business.”