Management Information System in Kraft Food inc.

Introduction

A management information system (MIS) is a system or process that provides the

information necessary to manage an organization effectively. It is used by managers
throughout the organization to help them in directing, planning, coordinating,
communicating, and decision-making.

In order to provide past, present and prediction information, an MIS can include
software that helps in decision-making, data resources such as databases, the hardware
resources of a system, decision support systems, people management and project
management applications, and any computerized processes that enable the department to run
efficiently.

The importance of maintaining a consistent approach to the development, use, and

review of MIS systems within the institution must be an on going concern of the managers.
MIS should have a clearly defined framework of guidelines, policies or practices, standards,
and procedures for the organization. These should be followed throughout the institution in
the development, maintenance, and use of all MIS.

MIS is viewed and used at many levels by management. It should be supportive of the
institution's longer term strategic goals and objectives. To the other extreme it is also those
everyday accounting systems that are used to ensure basic control is maintained over
financial record keeping activities.
MIS plays very vital role in the management, administration and operation of the
organization. The system ensures that an appropriate data is collected from various sources,
processed and sent further to all the needy
KRAFT FOOD Inc.

Kraft Foods is the second largest diversified food distributor company in the world
with annual revenue of more than $49 billion. More than half of the revenue generated by
Kraft comes from outside of the United States. The Kraft Food Company manufactures and
markets packaged foods products, which include cheeses, beverages, snacks, convenient
meals and a large variety of packaged grocery products.

Since June 2006, CEO Irene Rosenfeld has been successful at Kraft. Her strategy for
the company has led them to achieve key success in United States and around the world. The
Kraft Food Company is thriving with a large percentage of their revenue coming from the
snack side of the business.

Embarking on Kraft Foods careers provides areas of opportunity in the following

fields: finance, human resources, information systems, marketing, marketing resources, sales,
and research development and quality. In addition, Kraft also seeks hourly personnel for
manufacturing, distribution, and sales. Job seekers interested in working at Kraft will find it
is rated high among industry leaders.

The Kraft Foods culture is diverse, with an emphasis on balancing work and life,
professional development, as well as participation in community outreach programs
throughout the world. Kraft has 160 locations around the world, and is committed to keeping
its customers and employees informed in all facets of the Kraft Brand. They have
implemented many training programs such as seminars on organizational change, and clearly
defining corporate responsibility by implementing a sustainability strategy. One example of
their corporate responsibility and sustainable strategy promotes effective product packaging
to reduce the environmental impact of waste disposal on a global scale.

Kraft benefits are competitive. They offer employees a comprehensible and

competitive employee benefit plan. It selects benefits that meet the employee’s needs while
providing a solid foundation of personal security for the future with a wide range of program
options available to the employees and their families.
 With facilities in over 160 countries, Kraft Foods provides company training, career
opportunities, and experience in the world of global branding. Kraft values diversity by
promoting its philosophy of innovation and teamwork. A career with Kraft is an opportunity
to work with some of the industry’s best people, gain excellent professional development,
and participate with a global leader, which produces high quality food products around the
world.

KRAFT FOOD THE PAST AND PRESENT STATE OF MIS IN A ORGANIZATIONS

The Past

Kraft Foods Inc. is a company with many different roots and founders, all sharing a
commitment to quality, a willingness to take risks and a spirit of innovation. Among the
products now sold by Kraft Foods Inc. are so many “firsts” and innovations that a history of
the company is almost a history of the food industry. Kraft traces its history to three of the
most successful food entrepreneurs of the late 19th and early 20 th centuries — J.L. Kraft, who
started his cheese business in 1903; C.W.Post, who founded Postum Cereal Company (later
renamed General Foods Corporation) in 1895; and Oscar Mayer, who began his meat
business in 1883.

Chicago businessman name James L. Kraft started the company in 1903 by

pioneering innovations in the wholesale distribution of cheese. His four brothers joined him
in 1909, and they incorporated the fledging business as J. L. Kraft & Bros. James Lewis
Kraft was born on a dairy farm near Stevensville, Ontario, Canada on 11 December 1874. He
was the second of eleven children. His parents were Mennonites, carrying on the tradition of
his father, Jacob Boehm (ca. 1693-1781). James was educated locally and worked nearby at
Ferguson’s general store in Fort Erie starting at the age of eighteen. James Kraft moved to
Buffalo, where he invested in a cheese company. Later, he moved to Chicago, IL to manage a
branch of the company and while there, his partners eased him out of the business. Stranded
in Chicago with only $65. in capital, he obtained a horse and wagon and he purchased cheese
wholesale each day and then resold the cheese to local merchants.

The new venture was successful and by 1909, several of his brothers had joined the
company as permanent employees (Charles H., John H., Fred, and Norman). In that year, the
business was incorporated under the name of J. L. Kraft & Bros. Co., with James L. Kraft as
the president.

Kraft developed a revolutionary process, patented in 1916, for pasteurizing cheese so that it
would resist spoilage and could be shipped long distances. The company grew quickly,
expanding into Canada in 1919. Over the years, Kraft introduced many innovative products
and used progressive marketing techniques to make his company one of North America’s
leading food producers.

James Kraft was also noted for his philanthropic contributions. He helped create one
of the first major television programs, the “Kraft Television Theater,” which ran from 1947
until 1958. He also supported the Baptist Church and was a strong proponent of religious
education for young people. He gave a large portion of his wealth to religious organizations
over the years and he was once quoted as saying, “The only investment I ever made which
has paid consistently increasing dividends is the money I have given to the Lord.”

Business Kraft used innovative and aggressive advertising techniques to promote his
line of 31 varieties of cheese, becoming of the first food companies to use colour
advertisements in national magazines. The company opened its first cheese factory in 1914.
Until Kraft entered the business, cheese was produced in large wheels and had a tendency to
spoil quickly when cut because most grocers and consumers had no access to refrigeration.

Thus problem inspired Kraft in 1915 to produce a blended, pasteurized cheese that he
marketed in metal containers as “process cheese.” The sale of six million pounds of cheese to
the US Army during World War 1 insured the fortunes of the company. The company
changed its name to Kraft Cheese Company in the 1900s soon after merging with the Phenix
Cheese Corporation, the maker of Philadelphia Brand Cream Cheese (introduced in the
United States in 1872). In 1928 the company introduced Velveeta pasteurized processed
cheese spread and Miracle Whip salad processing, adding Kraft caramels in 1933. Kraft now
famous macaroni and cheese dinner was introduced in 1937 and Parkay margarine entered
the limelight in 1940. Once again, the company benefited when it became a major food
supplier to the Army during World War 11. Cheez Whiz was launched in 1952, individually
wrapped cheese slices in 1965, and Light n’ Lively yoghurt in 1969. Because of a shrinking
tobacco market, the Phillip Morris purchased General Foods in 1985. Kraft was added to its
corporate holdings in 1988 followed by the purchase of Nabisco in 2000.

Despite being the country’s largest packaged food company, with hundred of brands
analysts say that Kraft has failed in recent years to introduced innovative and successful
products. To reduce the bureaucracy and streamline the food company, Kraft has eliminated
thousands of jobs and closed numerous plants and it is divesting itself of brands such as Life
Savers, Altoids mints and Milk Bone Dog Snacks. In 2006 Irene B, Rosenfeld, chairwoman
and chief executive of Frito Lay North America, was hired as chief executive. Upon
assuming her position, she announced a new executive team to build a Kraft that is more
aggressive, agile and imaginative and that will focus more intensely on consumers’ evolving
food and beverage needs.

THE PRESENT

Over the last several years, Kraft Foods has transformed its portfolio by expanding
geographically and by building its presence in the fast-growing snacking category. A series of
strategic acquisitions, notably of LU biscuit from Danone and of Cadbury Plc, together with
the strong organic growth of its power brands, have made Kraft Foods the world's leading
snacks company. At the same time, the company has continued to invest in product quality,
marketing and innovation behind its iconic North American brands, while implementing a
series of cost management initiatives. As a result, the company has delivered strong results in
very challenging economic conditions.

Having successfully executed its transformation plan, and 18 months into the Cadbury
integration, the company has, in fact, built a global snacking platform and a North American
grocery business that now differ in their future strategic priorities, growth profiles and
operational focus. For example, Kraft Foods' snacks business is focused largely on
capitalizing on global consumer snacking trends, building its strength in fast-growing
developing markets and in instant consumption channels; the North American grocery
business is investing to grow revenue in line with its categories in traditional grocery
channels through product innovation and world-class marketing, while driving superior
margins and cash flows.  
 Over the course of Kraft Foods' strategic transformation, the Board of Directors and
management have continually explored opportunities to further enhance performance and
increase long-term shareholder value and believe that creating two independent public
companies is the logical next step.  Specifically, detailed review by the Board and
management has shown that these two businesses would now benefit from being run
independently of each other, rather than as part of the same company.  

The company believes that creating two public companies would offer a number of
opportunities:
 
•   Each business would focus on its distinct strategic priorities, with financial targets that best
fit its own markets and unique opportunities.
•   Each would be able to allocate resources and deploy capital in a manner consistent with its
strategic priorities in order to optimize total returns to shareholders.
•   Investors would be able to value the two companies based on their particular operational
and financial characteristics and thus invest accordingly.
 
Kraft Foods uses modern technologies and equipments in both production and distribution
process. The Kraft has spent around US$ 499 million on R&D in the financial year 2008. The
Kraft Food has strong Research and Development team consisting of engineers and scientist
who constantly works on deploying innovations in the foods, beverages and packing
concepts. They also work on improving the current processes, products and packaging etc.

For the information processing and business transformation processes, the Kraft
Foods uses the SAP Net Weaver Master Data Management. It helps in combining
information from both the SAP and Non SAP inheritance. SAP Net Weaver MDM has
developed a data warehouse covering the customers, suppliers, distributors, finished goods
and raw materials etc. to help in real- time data mining and retrieval processes. The
investments in SAP help the top management in accessing effectively the real-time master
data during the decision making processes (Kraft Foods deploys SAP Net Weaver technology
platform , 2008).
 The Kraft Foods works in association with United States Environmental Protection
Agencies for benefiting from the recent development in technologies. The Kraft foods to
minimize its truck miles work effectively on its transportation system. They have
implemented a no-ideal engine policy at their shipping location and focuses on intermodal
transportation system. Kraft Foods uses the Oracles transportation management software to
effectively track and minimize the empty mile trips (Kraft Foods Eliminated More Than 50
Million Truck Miles Since 2005 Through Focus on Transportation Sustainability Efforts,
2009).

Kraft Foods has won the U.S. Information Integrity Coalition's prestigious 2009
Silver Award for excellence in information integrity (EIIA) using Citicus ONE risk and
compliance management software. The award recognises the efficient, consistent and reliable
way that Kraft Foods manages the risk posed by thousands of IT systems, sites and suppliers.
The software equips Kraft Foods to manage its information security, risk and compliance
obligations from any of its global locations and business-oriented results can be produced for
decision-makers within hours.

Jim Pesce, Manager in Kraft Foods’ Internal Controls group, explains their initial risk
management challenge: “Investors, regulators, business partners and consumers expect us
to manage risk well. Our goal was to create a common approach to address risk /
compliance of our information systems and create a systematic method of measuring
information risk. By disclosing dependencies and relationships between business processes,
information systems and third party partners, we could obtain a broader view of this risk and
simplify data collection and reporting.”

Kraft Foods chose Citicus ONE software to help manage one of its key areas of risk,
reduce the likelihood and impact of incidents and provide management with an informed
view of information systems risk across their organization. A representative from the core
global team and regional coordinators work with business leads who are most dependent on
specific systems, sites, processes or suppliers - coupled with specialists from Kraft Foods'
information systems, security and controls group.

Business leads at Kraft Foods use Citicus ONE’s succinct criticality assessments, risk
scorecards and incident assessments - supported by harm reference tables and detailed
checklists customized by Kraft Foods– to help measure information systems risk and
compliance in objective business terms. The software generates highly visual, impactful
results including risk and compliance status reports, heat maps, dependency maps, risk
dashboards, league tables and incident statistics.

Using Citicus ONE, the time taken to do deep dive assessments has been significantly
reduced and the high quality results mean that Kraft Foods can focus resources on high risk
areas and meet risk and compliance requirements.

Citicus Limited was formed in 2000 by Simon Oxley, Sian Alcock and Marco Kapp.
The company provides world-class automated risk management tools that have been
implemented in public and private sector enterprises of all sizes around the world, and helps
customers implement them successfully. Our flagship software, Citicus ONE, enables
organizations to measure and manage the risk posed by the entire range of assets, entities,
processes and activities on which they depend, using a methodology that reflects 20 years of
research into the factors that drive risk up or down and those which make risk programmes
successful.

Kraft Foods uses modern technologies and equipments in both production and
distribution process. The Kraft has spent around US$ 499 million on R&D in the financial
year 2008. The Kraft Food has strong Research and Development team consisting of
engineers and scientist who constantly works on deploying innovations in the foods,
beverages and packing concepts. They also work on improving the current processes,
products and packaging etc.

For the information processing and business transformation processes, the Kraft
Foods uses the SAP Net Weaver Master Data Management. It helps in combining
information from both the SAP and Non SAP inheritance. SAP Net Weaver MDM has
developed a data warehouse covering the customers, suppliers, distributors, finished goods
and raw materials etc. to help in real- time data mining and retrieval processes. The
investments in SAP help the top management in accessing effectively the real-time master
data during the decision making processes (Kraft Foods deploys SAP Net Weaver technology
platform , 2008).
 The Kraft Foods works in association with United States Environmental Protection
Agencies for benefiting from the recent development in technologies. The Kraft foods to
minimize its truck miles work effectively on its transportation system. They have
implemented a no-ideal engine policy at their shipping location and focuses on intermodal
transportation system. Kraft Foods uses the Oracles transportation management software to
effectively track and minimize the empty mile trips (Kraft Foods Eliminated More Than 50
Million Truck Miles Since 2005 Through Focus on Transportation Sustainability Efforts,
2009).

ELABORATE HOW THE EVOLUTION HAVE BROUGHT ABOUT THE

REDUCTION IN OPERATING COSTS, NUMBER OF HEADCOUNT, SIZE OF
ORGANIZATION AND ITS IMPACT ON REVENUE.

THE EVOLUTION
The Evolution Definition

“Evolution of business means its origin, growth, and continuous development with expansion
in various sectors, that contribute and run economies.”
The evolution of business went through many progressive stages or so called
developmental steps. In each stage of progress, it evolved itself and got more mature than its
previous stage. It is evident that, at every step of evolution; it expanded its scale of operations
and also widened its modes of communication.
Slow process of change from one form or level to a better or higher one, or that brings
into being a superior or new order. Evolution does not occur in a straight, steady progression
but is marked by false starts and dead ends, random leaps in different directions, and long
periods of no fruitful activity. And, contrary to the popular belief, constant adaptation (see
natural selection) is not the main feature of evolution. By far the most dominant evolutionary
phenomenon is the preservation of whatever is working well. The fundamental natural
principle as borne out by fossil (paleontological) research is: "If it works, don't mess with it."

The business of business is business. This has been the premise upon which the
business world has been operating in the struggle toward market domination and profitability.
Contemporary societies and the business world are inseparable. But so are all human beings
and the planet. From a systems perspective, all human institutions, individuals and the
environments in which they live and operate are inextricably interconnected in a complex and
elegant web of mutually influential relationships. And yet, this understanding is hardly
reflected in the functioning of the business world. Over the past decade the evolution of
management information system has been influenced by several factors.  Here are the top
factors of influence.

The Internet
As the internet has evolved so has the management information system.  From the early start
of Yahoo and the Netscape browser to the dominance of Google and the emergence of
Mozilla, the information management system has benefited from the advances within the
internet.

Email
The ability to send emails back and forth allowed information to be passed on and managed
through the email and POP medium.  This led to several advances within the structure and
inbound systems.

Social Media
This is the next medium that will have significant influence.  We are already seeing many
breakthroughs in using APIs with both Facebook and Twitter that will change the landscape
of management information systems.

Reduction in operating cost

Cost reduction means conducting some innovations in the way of working in a new
style, so that the excess costs of production and operation could be eliminated. Cost reduction
programs are directed toward specific efforts to reduce costs by improving methods work
arrangements and products. Cost reduction can be made in different areas and stages of
production, storing and distribution process by applying more advanced and scientific
techniques of operation. So, a cost reduction program needs a research and development
activity.
 Cost reduction programs may require a bulk amount of research and development
budget, but once a new technique is introduced, it gives competitive advantages for the long
period.The aim of cost reduction is to see whether there is any possibility of bringing about a
saving in the costs incurred on materials, labor, overheads etc.

Cost reduction is possible through the following improvements:

* Obtaining more outputs from the same inputs and facilities.
* Using a lesser quantity of inputs to obtain the same output .
* Simplifying the methods of distribution.
* Improving the location and layout of plant, warehouse and other resources.

Kraft Food Company, with its development history and the company scale. Giving
key Success factors of Kraft Food and showing important functions that significantly affect
the company operation system: Supply Chain Management, Inventory Control, and Lean
Manufacturing.

Kraft Food Supply Chain System is one of the biggest and most sophisticated
systems, the scale of company with multiple brands combined requiring Kraft Food to
develop their supply chain system in the modest way. Nowadays, Kraft Food is aiming for
building up the relationship and also develops a better communicating system with their
clients and customer (Customer Service Level), supply chain new System based on the
quality of customer service, Cost (cost of serve) and the future planning and current company
status analysis, (Logistic Cost Budgeting), which further on finding more and more
opportunity in looking for better clients which provide better quality and lower the cost of
supply chain.

Inventory Control: To control Kraft’s inventory efficiently, they had applied 2

projects MOST and Yard Management System. MOST is Management of Organized
Sustainable Trucks – the project that optimizes the routes in order to minimize empty miles.
Yard Management System is the project that helps Kraft in monitoring their yard truck also
trailer accurate, quicker and easier. By applying high technology Kraft also reduces cost of
operation and make opportunities to build customer relationships by delivering value in new
ways
 Lean Manufacturing is an effective tool to reduce wastes and shorten the time of
production and it creates many values for Kraft Foods. So in January 2008, Kraft applied
“lean is not lean”, a project for new product, to solve current difficulties and create value for
company and it was successful and looked good for their profit and loss statement and
balance sheet. Beside that, Kraft recognized JIT method is very useful for manufacturing
company, so they decided to implement this method base on the ECR system – this system
belonged to supply-chain management system. This system was very convenient for both
customers and Kraft because customers can be easy to order and purchase products and Kraft
can be easier to arrange the manufacturing schedule to produce and deliver their products on
time.

Quality control is very important for every company to develop and get their
reputation, so Kraft Foods used Infinity QS ProFicient 4 to control the quality of every issues
they produce. In addition, Kraft also applied ITIL in production to achieve ISO certification,
especially ISO 20000

Conclusion of the whole operating system of Kraft Food the overall summary of the
effectiveness of Kraft Food functions: supply chain, inventory control and Lean
Manufacturing

Number of headcount

MIS use in organizations will result in numerous benefits for these organizations and
the individuals who comprise them. The use of information system can lead to productivity
gains that will result in a higher standard of living, a shorter workweek, and increased leisure
time. Technology is changing the definition of the workplace. Telecommunications
technology is allowing the worker to be far removed from the office setting and still
accomplish the task assigned. Telecommunications allows working parents to stay home with
sick children and not miss work. It allows an executive to remain in contact with the daily
activities of the business while on a vacation or business trip.

It even allows other workers to remove themselves from the office setting and
perform their jobs entirely from their homes. However, telecommunications has drawbacks. It
makes it more difficult for managers to supervise employees when they are not on site. It
makes evaluation and training difficult. Finally, it removes the employee from contact with
their co-workers, reducing teamwork and the employees sense of belonging. New
technologies increasingly are being introduced into the workplace to accommodate people
with disabilities allowing those with physical challenges for the first time to become more
productive and versatile.

Employee typically refers to an individual working under a contract of employment,

whether oral or written, express or implied, and has recognized his or her rights and duties.
Most officers of corporations are included as employees and contractors are generally
excluded. Based on recorded statements Kraft Foods Inc. is currently employing 126 K
people. This is much higher than that of sector, and significantly higher than that of Number
of Employees industry, The Number of Employees for all stocks is over 1000% lower than
the firm.
The employee invent new flavours. Make and sell Kraft Foods Inc. delicious
products. Manage the company. And much more. Every day, the success company depends
on more than 125,000 capable, dedicated and diverse Kraft Foods employees around the
world. Treating them well and providing a workplace that is safe, rewarding and inclusive is
a proven recipe for keeping great people and inspiring them to do good things.

The Kraft Foods Inc. encourage and support the employees in living healthier
lifestyles and in fostering their spirit of giving back to the communities. We provide various
tools and resources about health and well-being as well as other life topics that are designed
to help the employees balance their lives. Our robust volunteer program encourages
employee contributions of time, money and skills where they are needed most in the
communities around the globe. Fostering volunteerism is good for the community, employees
and company. The company work hard to keep all their employees safe and aim for zero
accidents in the workplace. Doing so requires addressing the causes of injuries and setting
clear expectations that employees must follow all safety laws and guidelines, operate
equipment properly and never use alcohol or illegal drugs in the workplace. So everyone can
contribute to his or her fullest potential, the company don’t allow discrimination or
harassment based on age, race, disability, national origin, religion, sex, sexual orientation or
any other legally protected status. A performance-driven, values-led culture builds a stronger
company and provides a workplace that attracts and retains thinkers, problem-solvers and
doers. And they in turn are defining the food industry for decades to come.

Size Of Organization

In 2004, Kraft Foods realized that they faced competitive challenges that required eliminating
complexity throughout their organization. In addition to traditional plant closings and product
rationalization, the company decided to consolidate on the SAP® ERP platform and is
currently rolling out globally to go live on ECC 6.0. The North American SAP project began
in April 2005, and like all global projects, the growing impact of master data definition,
rationalization and migration was becoming apparent to the enterprise MDM team. There are
many teams responsible for different aspects of the project definition and subsequent rollout.

At the same time, Kraft Foods’ restructuring initiative, “Organizing for Growth”,
required substantial changes in corporate alignment and was aggressively cutting costs to
remain in a leadership position in its key product and demographic markets. At Kraft Foods,
the enterprise master data group implementing SAP MDM and the SAP data group had not
been closely linked in their efforts until 6 months prior to go-live. The teams came to realize
that they had a master data issue and process for implementation that could not be sustained
long-term. “Resource projections were the main driver”, says Merri Beckfield, MDM
Delivery Services Manager.

“We had a lot of overlapping activities between the plants getting ready to go live,
and we knew that the SAP data had to be clean.” There were too few resources allocated to
their target process and it was clear that the current trajectory would continue to frustrate the
team and begin to delay results. That was simply an unacceptable risk—a delay in a global
organization the size of Kraft Foods could cost millions of dollars monthly in lost
productivity.

Impacts of Revenue

With over 16.5 million people employed, the US food and beverages industry constitutes
around 10% of the country’s Gross Domestic Product. The average annual spend of the
consumers on food is $1 trillion. The worldwide sales of process foods are found to be US$
3.2 trillion in 2004. A huge percentage of world population involve in direct farming, and as
a result of when they fed themselves. On the other hand the modern food industry relies
heavily on modern equipment and technology and which results in food industry that is more
global than local (Food Industry Overview, 2009),
In recent years the urban population is increasing in the greater extent, as a result the
food production and the food buying becomes two different processes. This has paved way
for more firms to concentrate on food industry, which is evident from the number of super
markets and retail players in the food industry. Kraft Foods is one of such retailers having
global presence in the food and beverages industry. Nearly a million times per day, the
consumers around 150 countries all over the world reach the Kraft brands.
The Kraft Foods markets its product under various brand names, out of which there
are nine brands that produce revenue in excess of US$ 1 billion. Also there is more than 50
other brand that generates revenue in excess of US$ 100 million. Out of these revenues, more
than half are from the brands which have a market share twice that of the competitor and
around 80% of the these revenue are generated by brands that have the number one position
in market share. The total revenue of Kraft Foods in 2008 equals US$ 41.9 billion and 38%
of which is from its snacks brands, and 20% are from the Beverages brands (Kraft Foods -
Fact sheet, 2008).

Hunger and malnutrition are the greatest threats to health and well-being around the
world.  Nearly one in every six people doesn’t get enough to eat.  As one of the world’s
largest food companies, Kraft is committed to helping change that by fighting hunger and
promoting healthy lifestyles.

Over the past 25 years, Kraft Foods has donated more than $770 million in cash and
food.  Since 1997, they’ve provided more than one billion servings of food to those in need. 
And, through the Kraft Foods Foundation, they have recently pledged $180 million over three
years to get more food, better nutrition and information to children and family.To make the
biggest impact possible, they work with non-profit organizations such as Feeding America in
the U.S., and Save the Children in Southeast Asia.

But it’s not just about the food you eat.  It’s about how you live.  That’s why Kraft
Foods helped develop healthy lifestyles programs for children in the U.S., Russia and many
other places.  These programs will help gets kids running and playing, making informed food
choices, and preparing healthy snacks and meals.
Kraft Foods is the world’s second largest food company with annual revenues of $42 billion

 Millions of times a day, in about 150 countries, consumers reach for their favorite
Kraft Foods brands.  And, in the U.S., our products are present in more than 99
percent of households.
 Kraft Foods proudly market nine brands with revenues exceeding $1 billion,
including: Kraft, Jacobs, LU, Maxwell House, Milka, Nabisco and its Oreo brand,
Philadelphia, and Oscar Mayer. More than 50 additional brands have revenues greater
than $100 million. More than 40 of our brands are at least 100 years old.
 More than 80 percent of their revenues come from products that hold the No. 1 share
position in Kraft’s respective categories. And, more than 50 percent of the corporate
revenue is driven by categories where their market share is twice the size of the
nearest competitor.
 98,000 employees strong, work tirelessly to make delicious foods consumers can feel
good about. We make our products at 168 manufacturing and processing facilities
worldwide.
 Kraft makes a difference by fighting hunger and supporting healthy lifestyles. Since
1997, we have provided more than 1 billion servings of food.
 Kraft Foods is a member of the Dow Jones Industrial Average, Standard & Poor’s
500, the Dow Jones Sustainability Index and Ethibel Sustainability Index.

DETERMINE THE CHANGE IN THE WAY THE ORGANIZATION OPERATE IN

TERMS OF DATA PROCESSING, AUTHORITY AND RESPONSIBILITY, MIS
REQUIREMENTS, REPORTING AND PRODUCT / SERVICE IMPROVEMENTS.

Data Processing

Kraft Foods turned to SAP who introduced the company to BackOffice Associates®
at SAPPHIRE in April 2007. After discussions with BackOffice, the company saw that the
process they were using for data migration and governance was not sustainable or repeatable,
and they chose BackOffice in October of that year. “We saw the BackOffice presentation and
were blown away”, says Merri. “He showed us that we could succeed with fewer resources
with a different plan.” Kraft Foods made changes in the way they managed the
implementation. Key personnel from a former data integrity group were re-purposed to learn
the BackOffice tool and methodology, and focus on data quality as part of a newly energized
Data Delivery Service (DDS). As DDS became more proficient, additional persons were sent
to BackOffice for training. BOA™ remained key to the early success of the relationship by
putting senior resources at Kraft Foods to get started quickly. The changes BOA
recommended to the process allowed the ERP project to be much more structured for the
deadlines and commitments around data definition and other data-related project components.

By Q3 2008, Kraft Foods began a knowledge transfer process to take on more tasks,
changes and management of the data migration from the BOA senior resource team. As their
skill set grew, the company sought additional cost savings through ‘virtual migration’ lower
cost resources. Originally a labour arbitrage play, placement of those resources in Chicago,
Mexico and China has become a strategic part of the DDS organization. “Our Kraft Foods
resources can continue to focus on high-value work while leveraging our strategic partner for
design and development work”, says David Underwood, DDS Operations and Business
Services Manager. “We are able to work almost 24/7/365 as we kick off refreshes and
development in China and finish up in Chicago later that day.” Once clean data is in an
SAP® production system, how do you keep it ‘clean’? Kraft Foods answered this question
through early use of the BOA™ Data Dialysis® data governance tool. SAP brought a new
awareness of complex business rules and processes to the company. But not all business
processes can be handled or enforced systematically—that’s where Data Dialysis has played
a key role. “The goal of the Data Dialysis group is to help discover and define rules that
weren’t known or that needed modification—it’s a continuous process”, says Brad Krause,
Master Data Manager for DDS. Since the company is in migration through 2011, much of
the early reporting requirement was temporary (legacy systems v. SAP) and consisted of
cross-repository, cross-system reporting.

“We want to get to a ‘management by exception’ framework”, notes Krause. “To get
that you have to trust in the rules and that the data is not masking some other cause from
something else”. Business confidence has risen as Data Dialysis has delivered rules that start
out as broad-based and get more granular. Since Kraft Foods has started the SAP rollout, they
have also acquired Cadbury, which is migrating simultaneous to the company data loads.
“Because of the combined data volumes, the only way you can quickly perform exception
rule iterations is through Data Dialysis,” says Krause. “The rules are getting better and better
as we run these daily refreshes and the exceptions begin to drop toward zero. Now we ask
whether errors are actually parameters that should be excepted from the report.”

Kraft Foods manages data quality in their production system with a team of three—
Brad Krause and two developers who assist in creation and resolution of Data Dialysis
reports. When they first started the team in 2008, the focus was on product and material, but
has since expanded to customer, vendor and location master data. The company imports 195
million rows of data daily. This is growing as more and more plants come on-line, and it can
grow exponentially with different pricing contained in the material master. Nightly imports
begin at 9pm and end in early morning to avoid performance issues. Large

Authorities and responsibility

The Committee will be composed of three or more non-employee directors. Each Committee
member will meet the “independence” requirements of the NASDAQ Stock Market
(“NASDAQ”) listing standards and applicable laws, rules and regulations for compensation
committee membership. The Board will determine the independence of each Committee
member. Each Committee member will be a “non-employee director” for purposes of Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Each
Committee member will be an “outside director” for purposes of Section 162(m) of the
Internal Revenue Code of 1986, as amended. The Board will appoint the members of the
Committee meeting these requirements and designate the Committee’s Chair. If the Board
does not designate a Committee Chair, the Committee members may designate the Chair by a
majority vote of the Committee members. The Board may remove any Committee member.
In fulfilling its responsibilities, the Committee will have full access to all of Kraft’s books,
records, facilities and personnel. The Committee will also have the authority to conduct
investigations and to retain independent counsel and advisers, as it determines necessary to
carry out its duties and responsibilities, including sole authority to engage, retain, approve
fees and other retention terms of, and terminate compensation consultants. Kraft will provide
for appropriate funding, as determined by the Committee, for payment of: (i) compensation to
any advisers the Committee engages; and (ii) the Committee’s ordinary administrative
expenses that are necessary or appropriate to carry out its duties and responsibilities.
Authority and Responsibilities.
1. Establish Kraft’s executive compensation philosophy.
2. Determine the group of companies the Committee uses to benchmark executive and
director compensation.
3. Assess the appropriateness and competitiveness of Kraft’s executive compensation
programs, including severance programs and executive retirement income design.
4. Review and approve goals and objectives of the Chief Executive Officer (“CEO”);
evaluate the performance of the CEO in light of these goals and objectives; and based upon
this evaluation, determine both the elements and amounts of the CEO’s compensation,
including perquisites.
5. Review management’s recommendations for, and approve the compensation of, the CEO’s
executive direct reports and other officers subject to Section 16(a) of the Exchange Act.
6. Determine annual incentive compensation, equity awards and other long- term incentive
awards granted under Kraft’s equity and long-term incentive plans to eligible participants.
7. Determine Kraft’s policies governing option and other stock grants.
8. Make recommendations to the Board with respect to incentive plans requiring shareholder
approval; and approve eligibility for and design of executive compensation programs
implemented under shareholder-approved plans.
9. Review the Company’s compensation policies and practices for employees, including
executive and non-executive officers, as they relate to the Company’s risk management
practices and risk-taking incentives.
10. Oversee the management development and succession planning process (including
succession planning for emergencies) for the CEO and the CEO’s executive direct reports
and, as appropriate, evaluate potential candidates.
11. Review periodically Kraft’s key human resource policies and practices related to
organizational engagement and effectiveness, talent sourcing strategies and employee
development programs.
12. Monitor Kraft’s policies, objectives and programs related to diversity and review
periodically Kraft’s diversity performance in light of appropriate measures.
13. Monitor executive officers’ compliance with Kraft’s stock ownership guidelines.
14. Advise the Board and assess the appropriateness of the compensation of independent
directors for service on the Board and its committees.
15. Review and discuss with management Kraft’s Compensation Discussion and Analysis;
and prepare and approve the Committee’s annual report to shareholders for inclusion in
Kraft’s annual proxy statement.
16. Perform any other duties and responsibilities that are consistent with the Committee’s
purpose, Kraft’s Articles of Incorporation and By-Laws, and governing law, as the Board or
the Committee deems necessary or appropriate.

MIS Requirement

All aspects of information management must be grounded in a consideration of the

information requirements (or information needs) of customers or clients of the information
systems and services. The study of information needs has occupied information science for
almost fifty years, but other disciplines, notably computer science, have also had an interest
(Wilson 1994).

From the point of view of the designer of computer-based information systems, it is

clearly necessary to understand what kind of reports a client needs from a system and, if
possible, to know how the client intends to use the information contained in those reports.
Armed with this information he or she can then try to ensure that the system delivers what is
needed, when it is needed.

Similarly, providers of competitive intelligence or those who analyse information

from online information sources must be aware of the information requirements of customers
if their work is to be cost-effective in satisfying users' needs.

Founded in 1903, Kraft Foods Inc. has transformed from a small cheese cart to the
second largest food company in the world in 2011. As of October 1, 2012, Kraft Foods Inc.
has split into two companies, Mondelez which operates the global markets, and Kraft Foods
Group operating in North America. No longer an international force, Kraft is doing well in
North American markets focusing less on snacks and more primarily on grocery items. Well
known name brands and customer loyalty are few of the components of Kraft which allow
the company to do as well as it does. Advancements in technology have not only increased
the efficiency and operations of the company, they also helped Kraft in the marketing
department, human resources department, and the financing department.

Reporting and Product / Service Improvements

Kraft's management performed an international consumer survey to determine if

consumers were aware of the product quality and whether they were receptive to Kraft's
product quality (Kilts, 1990). After receiving a favorable survey response, KFI decided to
produce an adaptive, revitalization, and business acquisition marketing campaign; tailored for
specific foreign markets (Kilts). From a product adaptation perspective, KFI used market
segmentation to isolate consumer needs and preferences. As such, researchers discovered
specific consumer tastes that were differentiated from the U.S., Canada, the UK, Australia, to
Spain.

These findings prompted KFI to customize its advertisements and communications

campaigns to effectively reach five different markets (Kilts). Considering KFI's global reach,
opportunities from the firm's cultural awareness and sensitivity has occurred as the firm
pursues economies of scale, process improvements, and distribution efficiencies that are
driven by new business transactions. Firms performing business in foreign markets may also
elect to standardize their products to manage production and advertisement costs. However,
due to diverse consumer needs and requirements, the risk may lead to unsatisfied customers.
When a firm decides the change its products for adaptation reasons; that is changing the
product's physical characteristics or attributes and packaging, the company will incur
additional costs such as manufacturing, marketing, packaging, and distribution (Calantone,
Cavusgil, Schmidt, & Shin, 2004). An organization can make a creditable business case for
product adaptation when the product modification develops into higher revenues and profits.

Kraft's product brand managers developed ways and methods to revitalize existing
food products to sell in foreign markets. The brand managers revisited products that were
more than 35 years old and revitalized them by positioning the products as either mild, hot, or
spicy and microwavable (Kilts, 1990). Consequently, product revitalization influenced
consumer behaviors. Shortly after product revitalization, the initial response occurred when
new customers became enticed by the repositioned products and younger consumers became
interested in Kraft products (Kilts).

The utility of adaptive product marketing activities have benefited Kraft's bottom-line.
Taking a mature business with mature products, Kraft's management has leveraged the
consumers changing tastes and lifestyles to reinvent and bolster its products (Kilts). Next,
Kraft's management team investigated the high growth in the frozen food business. Their
assessment revealed that due to changing lifestyles, demographics, single parent families, and
two working parents that the frozen food segment presented a business opportunity (Kilts,
1990).

To take advantage of the frozen food market segment, Kraft made a strategic business
decision to acquire several frozen companies (Kilts). The frozen food investments and
acquisitions allowed KFI to reach a market niche that consisted of health conscious
consumers. Kraft's adaptive strategy has evolved into 14 frozen food product lines that the
brand managers call Eating Right (Kilts).

Kraft's product brand managers developed ways and methods to revitalize existing
food products to sell in foreign markets. The brand managers revisited products that were
more than 35 years old and revitalized them by positioning the products as either mild, hot, or
spicy and microwavable (Kilts, 1990). Consequently, product revitalization influenced
consumer behaviors. Shortly after product revitalization, the initial response occurred when
new customers became enticed by the repositioned products and younger consumers became
interested in Kraft products (Kilts).

The utility of adaptive product marketing activities have benefited Kraft's bottom-line.
Taking a mature business with mature products, Kraft's management has leveraged the
consumers changing tastes and lifestyles to reinvent and bolster its products (Kilts). Next,
Kraft's management team investigated the high growth in the frozen food business. Their
assessment revealed that due to changing lifestyles, demographics, single parent families, and
two working parents that the frozen food segment presented a business opportunity (Kilts,
1990).
 To take advantage of the frozen food market segment, Kraft made a strategic business
decision to acquire several frozen companies (Kilts). The frozen food investments and
acquisitions allowed KFI to reach a market niche that consisted of health conscious
consumers. Kraft's adaptive strategy has evolved into 14 frozen food product lines that the
brand managers call Eating Right (Kilts).

As a food company, Kraft Foods is dependent on the earth for the raw materials we
use every day to make our products. We are changing the way we do business to become
more sustainable. Given the size and complexity of the issues, we’re partnering with others—
peer companies, governments, NGOs, farmers, suppliers and consumers—to find innovative,
scalable solutions. Packaging is one of the first and last experiences consumers have with our
products. That’s why we’ve taken a comprehensive approach to packaging—one that cuts
waste, conserves natural resources and gives users a more satisfying experience. Between
2005 and 2010, we cut nearly 100,000 metric tons (200 million pounds) of packaging from
our supply chain. We’re working to eliminate another 50,000 metric tons (100 million
pounds) by 2015. Reductions like the 20 percent we cut from packaging for LU Le Petit
Ecolier biscuits in France in 2010 are helping us on our way.

Key to our reduction in packaging is our Packaging Eco-Calculator™. It’s a tool we

invented to help our packaging developers create more efficient, sustainable solutions based
on data from the U.S. Environmental Protection Agency, the U.S. Department of Energy and
packaging industry groups. The Eco-Calculator figures the percentage of post-consumer
recycled material in a given package design, along with the amount of energy and carbon
dioxide emissions required to create the package. The Eco-Calculator also tells packaging
designers how efficiently they’re using materials and how well their designs will fit our
products’ physical dimensions. The tool is used along with other business practices, like
economic assessments and ability to manufacture, in deciding a final design. Examples of
other recent packaging reductions, based on annual totals, include:
• U.S.: Instant Maxwell House coffee jar material change—6,500 metric tons (14.4 million
pounds).
• U.S.: Planters peanuts shipper reduction—1,225 metric tons (2.7 million pounds).
• Central and Eastern Europe, Middle East and Africa: Tang powdered beverage can
materialchange—500 metric tons (1.1 million pounds).
• EU : Lacta chocolate tablets film layer reduction—145 metric tons (320,000 pounds).
 Besides improving the design in some of our packaging, we’re also using more
sustainable materials. In North America, the majority of people can recycle more than 70
percent (by weight) of our packaging. Most is made from paper, a renewable material. For
consumers, governments and trading partners, having a universally accepted definition for
sustainable packaging—along with metrics to measure progress—is important.

Conclusion

Overall, we can see that every major functions of Kraft Food operation system have
their significant roles that directly affect the company, like functions that we mentioned
above: Supply Chain System, Inventory control and Lean Manufacturing.

Kraft Food is a giant company and by constantly improving, implementing new

technologies to support those significant functions are essential. Through those functions,
Kraft Food management system can able to follow up any changes along the operation
process. By spotting those changes from the smallest to the more scaled problem, they can
make fast and effective decision.
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http://www.kraftfoodscompany.com/cn/en/About/values.aspx