IFS

Butcher's Pet Care masters demand driven manufacturing

Butcher's Pet Care has implemented IFS Applications as its core enterprise resource planning (ERP) system. Delivered on-time and within budget, the investment provides a complete business management system with advanced forecasting and demand planning capabilities. Customer service support is also benefiting from increased visibility and seamless connectivity between sales, production and the warehouse.

Production at Butcher's is a 24 hour process, running continuously, five days a week. The IFS system introduces additional facilities, such as constraints-based scheduling, which will allow Butcher's to achieve more efficient production cycles.

Customer orders are usually placed at short notice. It is a demand driven sector where fulfilment requires an efficient supply chain, capable of delivering the correct amounts of the right product into the stores - on time and fully compliant with shelf life specifications.

Traditionally, production planning is based on historic sales, overlaid by company marketing strategies. Very little information is available from the customer until the order is actually placed. Forecast and demand planning involve complex judgements, and these are becoming increasingly complicated as the company strives to make its products ever more appealing in this highly discerning and competitive market.

The problem

Butcher's Pet Care systems legacy was a basic stock - warehousing system, coupled with financial ledgers and a customer sales order processing capability. A separate system was used for forecasting. Other key functions were supported by a patchwork of solutions based on Word and Excel spreadsheets.

Project Manager, Jeff Martins said: "Nothing was linked and information was often re-keyed and duplicated. Transferring a sales forecast into some form of production plan or financial forecast, was time consuming and unreliable.

"Designed initially and tailored for meat processing, the previous system did not support any manufacturing operations. We needed a unified business management system, and preferably one that could be based around a standard vanilla format to suit our current and on-going requirements."

Developing market - consumer focus and brand loyalty

The highly competitive pet food market is driven by customer needs for convenience and health. As the wet can pet food market declines, the popularity of single serve and dry food continues to climb, but customer loyalty to brands remains high. Butcher's Pet Care has invested in detailed customer research to identify future trends and current buying decisions.

Head of Marketing, David Costello said: "As the needs of consumers change, we need to adapt and innovate. This year alone, we have successfully launched Olli, a dry cat food brand, Butcher's Choice 100% Complete, a dry food designed specifically for small dogs, Butcher's Choice Senior, a single serve product for small, older dogs, as well as Butcher's brand evolution.

"Customer loyalty is still key to our success in the market - their trust that we provide high quality, meaty food with all natural ingredients, combined with our ability to innovate and introduce new, more convenient formats. This new system will help us to ensure we remain a key brand for retailers and consumers."

Production planning

"This increasing scope is driving the need for better demand planning and more flexibility in manufacturing," explained Jeff Martins. "Production control has changed from a simple aim of keeping stocks at a specified level, to a more complex scenario of trying to satisfy the requirements of different customers, more effectively, by manufacturing the right products at the right time."

Solution    

The search for a replacement system started with a visit to a trade exhibition in October 2003. This resulted in a list of 15 potential suppliers. Initial discussions reduced the number to a short-listed four, which included IFS.

A list of requirements was drawn up by a project team representing all of the people that would be involved in using the new system. Each of the software vendors were then invited to demonstrate how their solutions would meet the various requirements to support manufacturing, quality, finance, sales, management reporting and warehousing.

A score card was devised to help in weighing up the strengths of each of the presentations. In the final analysis IFS came out as a clear winner because of the depth of preparation and ability to show how its software would provide the best fit for Butcher's requirements.

"Crucially we were very particular about finding a suitable vanilla version of the package and IFS were able to deliver that in its demonstrations," added Jeff Martins.

Some modifications have been made in order to meet specific requirements not covered within the standard IFS functionality. In the warehouse for example, these include facilities to produce smaller picks and part pallets automatically, allowing more flexibility in marshalling customer orders.

Implementation

Following the completion of contract negotiations, a kick-off meeting was held in October 2004. Training was completed by the New Year. Operational procedures were defined and documented during the first quarter of 2005. In terms of functionality, it was decided to implement all the core modules as a total package.

"Above all our single goal was to make the change without any disruption to the business," says Jeff Martins. "A pilot run was held in March and following a final check, the new system went live in April 2005.

Resources for implementation had to be matched by the availability of Butcher's small team of key personnel, all of whom had to share time with their main day-job responsibilities, in production planning, sales, warehousing and finance.

The software installation went according to plan. All areas were able to make the transition onto the new system on go-live day, except the warehouse which had a temporary set back, caused by a faulty network connection. Although not directly related to the IFS implementation, this incident had an immediate knock-on effect to the sales department, which was responsible for managing the customer interface.  

Continuing development

The core system applications covering demand planning, manufacturing, finance, payroll, sales order processing, purchase order processing and warehouse planning, all went live simultaneously. Licensed for 60 users, the system is configured in profiles and then users. For example, a manufacturing profile allows several users to share a menu; similar arrangements are in place for the other modules.

In terms of functionality, the company now has a unified system with interlinks between all departments. Looking back over the first six months, Jeff Martins is happy that the core applications are bedding in successfully. The company year end accounts have been completed and audited and Butcher's have reached the stage where the IFS system runs the business efficiently.

Requirements for a second phase in the implementation have been defined and a list of priorities drawn up for the training required for carrying this forward.

Having gone through the settling-in period, the company is now set to exploit the information being generated by IFS. A database manager and ‘Crystal' reports specialist has been recruited to take advantage of the on-line analysis facilities. These reporting capabilities will unlock the ultimate potential ‘intelligence' value of the IFS implementation through the definition and presentation of reports such as, profitability statements and other key performance indicators, across the entire business.

The Bristan Group is one of Britain's premier league suppliers of taps and accessories for kitchens, bathrooms and showers. Products are designed, developed and distributed from the company's headquarters in Tamworth, Staffs. Sales to end-user customers are normally through builders' merchants, hardware chains and independent specialist retail outlets.

It is a dynamic business driven on by huge demand for home improvements and designer accessories. The range of products is updated every year and marketed through high quality catalogues and focussed trade campaigns.  All of the production is outsourced to contract manufacturers in Europe and the Far East. 

Bristan prides itself as being the best supplier by far in this industry and has led the way on sales order performance. In action if a customer places an order between 8.00am and 6.00pm, the company will dispatch it the same day. The warehouse stays open until 10.00pm. Management of stock and having it in the right place is vital to this operation. So is speed of transaction - recording the order and getting it through to the warehouse. With lead times for new stock of up to two months and delivery commitments to customers of an hour or so, then stock control and purchasing are critical processes.

The challenge - increasing volume of transactions.

"Putting this commitment into action is hugely challenging," says Bristan's  financial director Roger Williams. "As the business has grown, facilities and systems that have previously operated reliably start to reach a point where shear volume of transactions and operational complexity outstrip their capacity."

Taking advantage of more powerful processors and database technology, new generation systems are easier to use and can provide more scope with Internet connectivity. As well as more convenience they offer better efficiency at all levels of the business.

Says Roger Williams:  "Key criteria in the selection process for Bristan are longevity and total cost of ownership. It's a long term relationship so picking the right partner was very important to us."

The upgrade for Bristan involved moving away from a text based order processing system which had supported the company successfully over ten years, during which time sales turnover increased from £3 million to £70 million.

The system was used in conjunction with a dedicated accounts package and a variety of bespoke solutions based on Lotus Notes databases. "Whilst this met our needs, operating three different systems meant we had lots of interfaces which were becoming hard to manage."

"Management information was limited and to be fair, we were processing a far higher volume than the system was ever designed to handle. After reviewing our future requirements we decided to replace our IT with a single unified system, to make it easier to manage."

The search for a new system started in early 2003 with the assistance of an independent advisor. Questionnaires and invitations to tender were sent out to about twenty potential suppliers and from the replies, a shortlist of five was selected, including IFS. 

The implementation

In due course IFS was selected as the preferred supplier and a contract, covering 205 users was signed in December 2003.

Whilst most of the Bristan procedures were able to drop into the generic IFS modules, some modifications were required to suit areas which were specific to the business. The main one was the collections and returns function. This required a much more detailed structure, allowing a consignment to be allocated to various status reports from the time it was created to when it is received.

Control of returns is very important to Bristan: "If you haven't got it right it can be very costly. So that was a fairly big issue. We didn't have this facility on our previous system and it was one of the things we were doing on Lotus Notes," explains Roger Williams .

Another important area was the use of bar code scanning for verifying customer orders on despatch.  This facility had been developed under the previous system and Bristan wanted to carry this over to the new system with some further improvements.

In operation - benefits

The first phase of the system, the core IFS Applications went live during July 2004. One of the most immediate changes was the move to a paperless system within the head office building. Everything was now on screen and users are able to check status and track the progress of orders from any terminal in the network.

Orders can be verified at final despatch and a packing note is printed to accompany each consignment.

"Although some means of measuring payback was considered, it was never really a high priority. For Bristan the main objective was to ensure continuity of its operations and high standards of customer service."

"Essentially it was something the company needed to do to keep expanding and achieve our targets," says Roger Williams.  "A key characteristic of our business is a high level of transactions for relatively small values. We dispatch about two thousand orders a day, so to us speed is vital," explains Roger Williams."

Although Bristan has been dealing with several major customers previously through EDI (electronic data interchange), the previous IT system could only run once a day. This facility is now running continuously providing a major competitive advantage in enabling Bristan to offer same day despatch. Bristan is building on this by encouraging customers to use EDI ordering.

"Paperless order processing is fundamental to improving convenience and efficiency. The payback is in eliminating errors and speeding up the process which is important to us," says Roger Williams.

Future developments

Having consolidated the first phase implementation Bristan is now looking at ways in which the implementation can be extended into other areas of functionality. A project has been started for CRM customer relations management. Other areas under consideration include improved information services for suppliers such as web based delivery schedules.

Roger Williams concludes:  "Certainly we are not using IFS to its greatest potential yet. Effectively this investment has provided infrastructure to support our future growth. We are also more than satisfied with the support provided by the IFS team. It was a challenging implementation, but as a software vendor IFS was able to deliver the right expertise and response which we tested to the extreme."