|  | McGuffie Brunton Case Study
| Client: Victoria Foods
| | Victoria Foods, a Leigh based company, which was until the late 90s a producer of generic baking mixes, is now one of the UK's foremost manufacturers of both market leading branded, and own label, home baking mixes, with a blue chip list of customers from the retail and food service sectors.
The Ideal Recipe for Success
With the implementation of a SYSPRO ERP system, which has been extended to include Advanced Planning and Scheduling, Victoria Foods has rebuilt its IT to a point whereby the firm's management can now effectively control its rapid growth and increasing production complexity. The system's introduction has also instigated an operational transformation that is delivering major business improvements for the company that produces, the famous 'Jane Asher' range of cake mixes.
For Victoria Foods, a highly successful and innovative new product programme, which has concentrated on the development and introduction of higher value added-brands, has helped deliver major growth over the past few years. In fact, the Leigh based company, which was until the late 90s a producer of generic baking mixes, is now one of the UK's foremost manufacturers of both market leading branded, and own label, home baking mixes, with a blue chip list of customers from the retail and food service sectors.
However, as many other smaller businesses have found, rapid growth can easily be a double-edged sword. In Victoria Food's case, the demands and expectations of customers - created by its new product success, brought with it major operational challenges that the company found were difficult to cope with in the early stages. The underlying problem lay with the fact that the new products represented a significant increase in production complexity; with more ingredients and additional processes, and items having to be produced in much smaller batches.
At this point, the manufacturing operation was reliant on a labour intensive combination of manual systems and multiple spreadsheets, which were typically fed data that was rarely up to date, and provided no detailed view of WIP, or what was being held in the on-site or third party off-site stores. Attempting to meet the requirements of a 98.5% on time delivery service for its growing product range soon created a never-ending cycle of schedule intervention, wastage, over stocking and obsolescence - not the ideal recipe for any business!
To overcome this fallout in growth, the company recognised that it had to replace its severely limited IT with a modern integrated business system, and to do it quickly. "It was clear that we needed major improvements to many aspects of managing the business, especially production and inventory control, and that the existing systems were just no longer up to the job," reports Commercial Director, John Blackledge.
By late 2003, Victoria Foods had found its solution and begun the implementation of a SYSPRO ERP system from McGuffie Brunton. Within a few months the company went live with the core system, including financials, distribution, purchasing MRP and Stock Management. This was followed by Shop Floor Data Capture, and the recent introduction of Advanced Planning and Scheduling (APS).
Delivering the Goods
As anticipated, having one set of integrated 'up-to-date' data, plus the right systems to control all stock holdings, and track movements through the factory, soon brought significant improvements in terms of stock accuracy and production visibility. As Planning Manager Stephanie Macdermott explains, "The key first step was to make sure the core SYSPRO system achieved a clear and accurate understanding of what needs to be, what can be, what is being and what has been produced. This represented a major advance for the business, but, just as importantly, it gave us a platform from which to move forward and introduce crucial new practices and systems."
For a start, pick and kit production has now been successfully introduced. Picking lists of the ingredients are produced by production schedulers, printed off in the stores, and the kits for each production batch are then built ready for transport to production when needed. Previously, someone from the cell would have to go to the stores and try to take out the materials needed for the next production batch. But, even if everything was available, some items could easily be stored awkwardly and not immediately accessible. As a result, production would regularly be held up due to not having the right materials in place in time. Moreover, the lack of preparation meant that bulk or pallet loads of some ingredients would often have to be moved out of store to production, and what was not used returned.
"The new pick and kit approach has not only improved the movement of materials and removed double handling, so eliminating a massive amount of wasted time and effort, but it has also de-cluttered the production area, smoothed out the stores operation and reduced production downtime," states Macdermott.
Building on Solid Foundations
With its new found data accuracy, Victoria Foods has also felt confident enough to further extend its ERP system to include the integrated APS, and so improve the links between forecasting, sales and production.
As Macdermott notes, "We felt it was vital that we had the core ERP system up and running, and had gained control and accuracy over WIP and stocks, before even contemplating trying to introduce the APS. If the APS module had been part of the main system implementation, we would have been pressured into adopting it at an early stage. But, due to residual data inaccuracies, this might have resulted in major errors occurring, such as effectively scheduling the wrong work which could easily have knocked our confidence."
In truth, the company's APS system is now live and providing a real breakthrough in terms of overall business efficiency. Through direct integration with the core ERP, the APS application is regularly fed new job information, along with WIP data from the shop floor, and from this the system automatically and very rapidly creates and updates production schedules. As well as removing what was previously a slow and labour intensive task, the system also optimises production, so minimising set up and cleaning times and maximising utilisation. "The combination of highly accurate stock and production data, plus the optimisation capabilities of the APS, means that not only are we just planning work that is needed - and not blindly building for WIP - but we are achieving a far more efficient throughput," claims Macdermott. She adds, "At the same time, by essentially providing a real time view of what is going through, and what is planned for each cell within the factory, the APS is delivering other major benefits as we find new ways to use this data."
For example, by enabling Victoria Foods' management to see when cells are not required, the APS is allowing the company to plan engineering preventative maintenance in advance and to have the confidence that the time slots given to engineers will exist and not adversely effect production. According to Macdermott, "We are now carrying out far more preventative maintenance, an activity that was previously almost unheard of, and as a result, the overall equipment effectiveness (OEE Levels) is going up."
The system also provides the company with the ability to rapidly determine 'if and how' extra 'rush' jobs requested by customers can be accommodated. The data it generates has been used to pinpoint production bottlenecks, and in one case has helped to make a case for moving a packing machine for cartons from its stand-alone operation, to being added to the end of a cell.
Moreover, the impact of improved data and production visibility is not just being felt by manufacturing. By combining cost and product viability data, now readily created by the SYSPRO system, with capacity information, Victoria Foods is able to target the sales of specific products or special promotions, in a focused effort to fill capacity lulls, especially during the slower business periods.
Ongoing Gains
Having moved so far, in a relatively short space of time, it would be understandable if the company now stood back from further system development. But not a bit of it, as Macdermott confirms, "We have a better knowledge of SYSPRO and have gained confidence in its capabilities. Plus, we are starting to see more and more new possibilities for what else it can do for us."
One area already being worked on is the development of a direct link between the warehouse system used by the company's party logistics provider and SYSPRO. At present, keeping abreast of what has arrived at the off-site warehouse and what has been dispatched to customers is still reliant on bits of paper. The new system will do away with this. The ERP will automatically notify the warehouse of what has been dispatched, and once the logistics provider has checked the goods in, confirmation of delivery will be automatically sent back. Information about what has been dispatched to customers 'and when', will be fed, automatically, through to the main ERP.
The expected outcome of this latest development is improved accuracy, partly as a result of eliminating the manual data transactions, and the extension of real time visibility - knowing what product is where - right through to the customer.
With this latest development, Victoria Foods will achieve complete control over the whole process, which will undoubtedly deliver even more benefits if recent experience is anything to go by. As Blackledge concludes, "Meeting customer service requirements and managing growth in both volume and product complexity were the key drivers of the ERP implementation. A much more controlled operation is already meeting these challenges far more effectively. At the same time, data accuracy and visibility of the manufacturing process have had an equally significant effect in terms of delivering bottom line gains. During the first full year, we have seen improving yields and a rising OEE. Equally rewarding has been a reduction in 'waste and overproduction' with our overall stock holding down by 16%, obsolescence down by 13% and WIP has been reduced by 63%." |
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