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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 going on.”

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 practices.

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.”