Healthlite Mis

Healthlite Yogurt Company

Healthlite Yogurt Company is a market leader in the expanding U.S. market for yogurt and related health products. Healthlite is experiencing some sharp growing pains. With the growing interest in low-fat, low-cholesterol health foods, Healthlite's sales have tripled over the past five years. At the same time, however, new local competitors, offering fast delivery from local production centers and lower prices, are challenging Healthlite for retail shelf space with a range of new products. Without shelf space, products cannot be retailed in the United States, and new products are needed to expand shelf space. Healthlite needs to justify its share of shelf space to grocers and is seeking additional shelf space for its new yogurt-based products such as frozen desserts and low-fat salad dressings.

Healthlite's biggest challenge, however, has not been competitors, but the sweep of the second hand. Yogurt is a very short shelf-life commodity. With a shelf life measured in days, yogurt must be moved very quickly.

Healthlite maintains its U.S. corporate headquarters in Danbury, Connecticut. Corporate headquarters has a central mainframe computer that maintains most of the major business databases. All production takes place in local processing plants, which are located in New Jersey, Massachusetts, Tennessee, Illinois, Colorado, Washington, and California. Each processing plant has its own minicomputer, which is connected to the corporate mainframe. Customer credit verification is maintained at the central corporate site where customer master files are maintained and order verification or rejection is determined. Once processed centrally, order data are then fed to the appropriate local processing plant minicomputer.

Healthlite has 20 sales regions, each with approximately 30 sales representatives and a regional sales manager. Healthlite has a 12-person marketing group in corporate headquarters and a corporate director of sales and marketing. Each salesperson is able to store and retrieve data for assigned customer accounts using a terminal in each regional office linked to the corporate mainframe. Reports for individual salespeople (printouts of orders, rejection notices, customer account inquiries) and for sales offices are printed in the regional offices and mailed to them.

Sometimes the only way to obtain up-to-date sales data is for managers to make telephone calls to subordinates and then piece the information together. Data about sales and advertising expenses and customer shelf space devoted to Healthlite products is maintained manually at the regional offices. Each regional office maintains its own manual records of customer shelf space and promotional campaigns. The central computer only contains consolidated, companywide files for customer account data and order and billing data.

The existing order processing system requires sales representatives to write up hard copy tickets to place orders through the mail. Approximately 100 workers at Healthlite corporate headquarters open, sort, keypunch, and process 100,000 order tickets per week. This order information is transmitted each evening from the mainframe to a minicomputer at each of Healthlite's processing sites. This daily order specifies the total yogurt and yogurt product demand for each processing center. Each processing center then produces the amount and type of yogurt and yogurt-related products ordered and then ships the orders out. Shipping managers at the processing centers assign the shipments to various transportation carriers.

Rapid growth, fueled