Musco Food Corp Case Study

Case 9.3

M usc o F ood U ses IT to Im p rov e S a les a nd O p era tions

Musco Food Corp. (muscofood.com) is a distributor of food products (meats, cheese, olive oil, and other deli-need products) in Queens, New York. It has only an eight-man sales force who visit customers and, until recently, showed them a paper catalog and took orders orally (“Just give us the same as last time,” or “I need fourteen cases of Italian cheese”). The salesman then went to his car and called a customer service employee, who then typed the information into the company’s computerized order processing system that generated the order to the warehouse for preparation and delivery, and an invoice for the customer. The system was in place for about 10 years; however, mistakes occurred about five times a week. The quantity ordered differed from that delivered. Either the customer service employee made a mistake or the salesman forgot the exact number while walking to his car. In either case, customers were unhappy, inventories were incorrect, and expensive rush orders (order corrections) had to be made. Salesman productivity was low and other expenses were too high. In addition, price changes and promotions that might be of interest to specific customers were not communicated in time. Finally, inventory availability was not known in real time. Using Treo smart phones (from Palm.com) that display product images and order entry e-forms, the salesmen struggled at the beginning to pull up the products and enter orders. However, after a few weeks, the salesmen became experts in locating a product out of more than 1,000 in the ecatalog. Now, an order is punched in the minute it is expressed by the customer. An electronic invoice is generated in seconds and shown to the deli owner for verification on the spot. Also, the customer service representatives who used to enter the orders in the computers are not needed. Instead, they have been retrained to help locate new customers. The wireless Treo...