A Closer Look at Kraft's MDM Deployment

With $35 billion in annual sales and well-known brands like Nabisco, Oscar Mayer and Maxwell House, Kraft Foods is among the largest packaged food companies in the world. It's no surprise, then, that Kraft's master data management (MDM) deployment is equally impressive. Announced yesterday at SAP's TechEd event in Las Vegas, the deployment was completed in record time, moving into production this spring after little more than nine months. It's also diverse, consolidating customer, vendor, product and materials data within a heterogeneous environment with a range of SAP and non-SAP systems and applications. For consumer products companies such as Kraft, the challenge of tracking thousands of ingredients and finished goods is compounded by regulatory reporting requirements. Thus, data governance has been a joint business-IT imperative since 2004.

"Kraft has a well-thought-out, holistic plan for master data management, and they've done it successfully in collaboration with the business — it's not just an IT-driven initiative," says Aaron Mahimainathan, SAP's senior director, platform marketing. "They've also exploited the breadth of our MDM product offering, addressing multiple domains of master data on one platform."

Despite Kraft's head start on data governance, an early product information management initiative — launched on a rival product in 2005 — failed to meet the breadth of Kraft's objectives, according to Mahimainathan. MDM initiatives have been gaining ground precisely because they take a more comprehensive, multi-domain approach to standardizing data, thereby eliminating redundancies and discrepancies across multiple dimensions of data. Kraft ultimately settled on SAP NetWeaver MDM 5.5 in conjunction with an SAP ERP deployment, and the company is using the MDM platform's models for customer, supplier and product data, the latter addressing both ingredients and finished goods and products.

"Kraft created a consistent user interface for all of its master data that sits on top of our MDM platform, and the system is hard wired to back-end systems including ERP," Mahimainathan explains. "Users get a consistent look and feel, and when they enter data into MDM, the system updates the back-end systems in real time."

Kraft's new MDM hub serves as a "single source of truth" for not only SAP ERP and SAP BW, but also for non-SAP applications, including Siebel CRM, a supplier relationship management system and multiple home-grown apps. Supplier, materials and finished goods masters went live in late 2007, while customer and product masters came online this year.

The business benefits of the deployment have been many, according to Kraft executive Mark Johnson, senior director, operations and business services. "Our teams are now able to make more effective decisions, improve collaboration with suppliers and trading partners, and more easily comply with reporting requirements," Johnson states. "By establishing an effective master data management process, we will gain a broader view of our company's data, streamline our SAP ERP deployment and accelerate the time to value for the new system."

SAP has more than 850 NetWeaver MDM customers, according to Mahimainathan, with most firms managing at least two data domains. Two-thirds of these deployments are designed for operational MDM, meaning the master data is fed to transactional systems to ensure process efficiency and accurate reporting. The remaining third are analytical MDM deployments in which the MDM hub provides consistent and diverse data for forecasting, prediction, risk analysis and other analytic applications.