Top Editors ... The strongest Link

Title: The strongest Link
Date: 08/04/2008
Autor: Linda Searby

Supply chain software can benefit a food manufacturer’s relationships with customers and suppliers as well as its bottom line

Being a supplier to the major grocery retailers has never been tougher. Food manufacturers today are expected to respond to a growing list of stringent demands, from improving on-shelf availability to reacting to shorter lead times, ensuring order accuracy and guaranteeing full traceability.
While some manufacturers bemoan such expectations as unrealistic and unfair, others have risen gamely to the challenge, investing in new software or technology that not only allows them to keep their customers happy, but also makes their own warehousing, distribution, inventory, ordering and production processes more efficient and cost-effective.
Seachill, a UK fish processor and private label supplier to UK retailer Tesco, falls into the second camp. In early 2006, customer demands for reduced lead times and faster shipping turnaround prompted Seachill to seek out a system that would enable it to automate its shipping and dispatching processes.
“Tesco’s short lead times were proving a challenge,” said Steve Wallace, Seachill’s IT manager. “We’d get orders late in the day, leaving a very small window to get products scanned and out of the door.” He went on to explain how Seachill’s existing system, which involved the use of handheld scanners and manual processing of outbound products, became a bottleneck that could potentially limit throughput on large product volumes.
After researching various options, including RFID, Seachill settled on the Visidot system from ImageID for its despatch area. Visidot’s main advantage lies in its ability to capture a large number of barcodes in a single scan via proprietary imaging technology.
Fresh fish packed in cartons are tagged with Data Matrix labels before being stacked onto pallets. A Visidot reader gate scans each pallet load, taking just seconds to capture every carton code on the pallet. Visidot SCT (Supply Chain Traceability) servers running Visidot SCT Director software enable despatch area operators to perform shipping verification and apply corretive measures should any discrepancies between incoming and outband pallet stacks be discoverd.
Per pallet scan times have been reduced from seven minutes to one and shipping errors have been eliminated.
Irish dairy producer Kerrygold is another manufacturer who believes working more closely with retailers yields better results than resisting change.
“Retailers are moving closer to their key suppliers and creating what I call heavyweight relationships, all the way along the chain,” said Ray Levett, sales director at Kerrygold. “They want to leverage suppliers’ product knowledge and get them more involved in areas like category management.
We are being asked to help retailers make decisions on issues such as case size, shelf life, where product should be displayed and order frequencies. We are also moving towards continuous replenishment – on some product lines we deliver to the retailer twice a day. So we needed to feed real-time sales into our forecasts and management systems to avoid having to hold overly large volumes of stock.”
Whilst Kerrygold was keen to deliver this more integrated and complex service to retail customers, it realised it needed an enterprise system that would become its ‘information highway’ and provide data to monitor KPIs (key performance indicators).
“Previously we had all manner of disparate systems: two databases that had been heavily modified, a PC-based warehouse management system and a creaking mainframe that caught up once a day with the day’s activities. We had no realtime visibility of stock and little customer management,” explained IT manager David Neill.
Kerrygold opted for a collaborative enterprise application suite from Lawson to close the gaps in information flow that were present in the previous system and give it the visibility it needed. The new system collates and reads real-time sales data and gives immediate access to information to measure performance at every stage in the process, reduce costs and drive inventory out of the supply chain.
As a result, Kerrygold says it can work more effectively and achieve shorter lead times. It is confident that if confronted with an unplanned demand from a customer, such as a special promotion, it would be able to respond almost immediately.
Australian beverage producer Foster’s is another major company whose paper-based production and warehousing systems were to blame for ineffective inventory management and inconsistent service levels which prevented the company from being proactive in addressing evolving customer requirements.
As part of a US $170 million project to improve supply chain capabilities, Foster’s centralised its warehousing operations in one facility located in Yatala, near Brisbane.
The new facility needed a warehouse management system (WMS) that was flexible enough to evolve with consumer tastes and could provide real-time business intelligence to optimise service across its supply chain network.
RedPrairie installed a system that is said to ‘provide a seamless transition from production to the warehouse to end-point distribution’.
When the system receives goods from production, it directs them to inventory locations, other tasks (eg stretch wrappers), or to be loaded from the mass accumulation table onto outbound vehicles. The system enables task interleaving with 27 forklifts, which means operators can pick multiple pallets simultaneously for a single load, reducing travel time. It also allows warehouse staff to reduce loading time for trucks. To further boost productivity, Foster’s invested in radio frequency equipment. This will allow the company to link in other supply chain systems that may be implemented in the future, such as yard management or pallet and keg tracking systems.
The warehouse is now entirely paperless. With real-time visibility into inventory, orders and shipments, Foster’s says it can more cost-effectively manage products and distribution and react nimbly to forecast fluctuations. It can consistently offer and deliver next day service to all regional centres for all products and has been able to optimise warehouse resources to handle five times more SKUs than before.
Already reaping the benefits of radio frequency technology (RF) is Scottish whisky distillery Edrington Group.
The company wanted to simplify and streamline warehouse operations by integrating radio frequency processes directly into its SAP system. After a review of potential suppliers it chose Zetes and its SAPConsule solution MiNetConnect. This provides the link between SAP and mobile devices to capture, validate and process transactions faster, in real-time and with complete accuracy.
At Edrington the RF system links workers on the warehouse floor using mobile computers with the SAP application server. 16 truck-mounted mobile computers allow pickers to scan and record stock hands-free whilst warehouse team leaders perform stock auditing with hand-held computer terminals.
The system gives feedback in real-time, which allows problems to be addressed as they occur. For instance, the picking process prevents a driver from putting more stock than they should into a loading bay, and problem pallets are automatically directed to a problem resolution area for further analysis and work.
“We have made considerable improvements in pick and stock accuracy,” said Steve Smith, IT customer controller for warehousing at the Edrington Group. “The integration of our mobile transactions through the SAP system enables us to manage our inventory and supply chain more effectively and provide a better service to our customers - all whilst reducing costs.”
It’s not just about improving relationships with customers - closer collaboration with suppliers can also drive supply chain efficiency.
Australia-based Coca-Cola Amatil (CCA) manufactures brands such as Sprite, Fanta and Pump Water. The Australian operation recently embarked on a project to establish electronic links with its major suppliers, for electronically exchanging material forecasts, delivery requirements, supplier delivery advices, receipt confirmations and inventory balances. The aim was to drive supply chain efficiencies by automating manual processes.
Wesupply’s OneTime Electronic Supplier Integration (ESI) provided a web-based system that complements existing Enterprise Resource Planning (ERP) systems both at CCA and its suppliers, and didn’t necessitate investment in new hardware or software.