|Snyder’s of Hanover: New Systems for an Old Family Company |
Harry V. Warehime began tempting the taste buds of southern Pennsylvanians with his Hanover Olde Tyme Pretzels 1909. Since then, Snyder’s of Hanover, as the company came to be known, has expanded its business beyond any scope that its founder might have dared to imagine. Snyder’s of Hanover remains a family-owned and family-run company, but it has become the world’s second largest pretzel maker, with 12.1 percent of the pretzel market. Snyder’s pretzel and chip varieties include Old Tyme Pretzels, Jalapeno Pieces, Butter Snaps, and EatSmart All Natural Veggie Crisps, as well as other popular snacks. In 2002, Snyder’s posted revenues of $164 million, trailing only Rold Gold, the reigning champion of the pretzel industry.
In addition to manufacturing its complete line of snack foods, Snyder’s distributes its own products, as well as those of other snack food companies such as Tasty Baking Company’s Tastykakes. With 40 distribution facilities all over the United States and Europe, over 4,500 products, and over 150 product lines, the home office in Hanover, Pennsylvania, has a considerable amount of data to manage.
If there was one last vestige of old-fashioned business left at Snyder’s, it was the company’s method of managing and analyzing data. Although Snyder’s sells more than 78 million bags of pretzels, chips, and organic snack items each year, some of its core systems were still heavily manual and paper-based.
Snyder’s financial department was using electronic spreadsheets for much of its data-gathering and reporting. Lois Stambaugh, Hanover’s financial analyst, would spend the entire final week of each month collecting Excel spreadsheets from the heads of more than 50 departments worldwide. Then she would consolidate and reenter all the data into another Excel spreadsheet, which would serve as the company’s monthly profit-and-loss statement. The financial data were harvested and consolidated the same way at the end of each fiscal quarter and the end of each year.
The overwhelming presence of the human factor made data-entry mistakes a concern. If a department needed to update its data with last minute information after submitting its spreadsheet to the main office, the head analyst had to return the original spreadsheet, and then wait for the department to resubmit its data, before finally entering the updated data in the consolidated document.
Perhaps most important, this system of gathering the company’s financial statistics at regular, but infrequent, intervals meant that important data simply were not available as often as they were needed. Snyder’s lacked the ability to react to sudden trends and unpredictable events because the data were supplied too late to adjust shipping schedules, pricing schedules, or delivery counts.
CEO Michael Warehime and his management team could track the gross profits of business units but not the performance of each of Snyder’s 4,500-plus products and over 150 product lines. For example, the spreadsheet-based system lacked the detail to show whether a specific snack product such as Sourdough Hard Pretzels or Pumpernickel & Onion Sticks was actually making or losing money. For a business focused on both production and distribution, this was a hindrance to growth.
Additionally, the spreadsheets could not reveal which distribution routes were worthwhile and which were cutting into the company’s profit margin. Under these circumstances, Snyder’s could only use the sales data it collected to make rough predictions about how much of a product should be manufactured and how quickly a product run should be repeated on particular distribution route. Snyder’s market share had been growing steadily until 2002, when it suddenly stalled; its...