Companies of all sizes and in all industries have ERP systems, but there are some applications unique to the food industry-such as traceability from one end of the supply chain to the other-that some ERP packages lack. While some food companies can afford any software solution, those who are smaller find themselves a poor fit for some of the largest ERP vendors. Getting additional functionality from an ERP vendor can be difficult for the processor. In recent years, however, a class of software that sits above the ERP level has become available. These packages can go through data from all parts of the company and turn the results into useful information that can be accessed from anywhere in the operation with a few keystrokes.
Case Study: Tracing the value chain
Nutreco Holdings NV, based in the Netherlands and with approximately 75 production and processing plants in 20 countries, is heavily involved in the animal nutrition and fish feed markets. In recent years it has been reducing its smaller downstream operations in fish and meat production. The company's 2005 net sales were €3 billion euros.
Nutreco began using Movex ERP software from Intentia, a provider of supply chain management software in the 1980s-in fact, Nutreco's Norway facility was a beta site for its development. At that time, says Kees Bink, Nutreco's corporate application manager, different Nutreco facilities were using different ERP packages. Wishing to use a single company-wide system, management evaluated suppliers based on functionality and partnership and settled on Intentia, partly because of its nearby location and partly because of its size.
Any company involved in the food business, especially in Europe, which enforces strict rules on supply chain traceability, must maintain records on all steps of the value chain. Yet, many companies have been handicapped because the information they need has been fragmented. Pieces of information are developed at all points of the operation from raw material to finished products, but these pieces are often isolated from each other. Seeing the need to bring them together, in 2000 Nutreco worked with Intentia to create a software product that would, in effect, hover above the operations and "collect information out of the value chain," says Bink. "We knew what we needed on traceability for [the] food and feed business," he says, "so we delivered the business logic on value chain traceability. Intentia has the programming skills and the programming logic to make a decent application out of it." The result was the web-based Intentia Trace Engine. It is now the basis of Nutreco's NuTrace program, which includes quality certification, process monitoring, risk management and electronic tracking and tracing. The NuTrace system runs through the entire production chain, records all data, makes the entire chain transparent and complies with the EU's traceability regulations. It also allows companies downstream to connect and add their own information, extending the trace beyond Nutreco. "In the case of a slaughterhouse," says Bink, "the raw material is a living pig that comes from a farm. There is a whole history on that farm with this animal. There also has been feed going into that farm that the pig has been eating, and even some steps before that. There's constantly information stored in the value chain somewhere, and what NuTrace does, or what Intentia Trace Engine does, is to pick up that information in a solid way, bring it up and connect it, making the value chain transparent."
The Intentia Trace Engine is a configurable Internet-enabled repository that receives, filters and interprets trace line information from any system within a company, its suppliers, transporters, customers or other third party. It allows creation of a database containing all information needed for tracking and tracing from one end of the value chain to the other. "You could also call it an ERP of ERPs," says Bink.
The ability to trace is essential, Bink goes on, when there is a problem somewhere in the value chain. "Sometimes problems in the feed end up in the animal causing problems," says Bink, "like dioxins and other undesirable components that don't belong in the food chain but end up there. That's why it is good to have that all connected. And that is what the software allowed us to do."
Having Intentia build the software and sell it as a standard product had significant advantages for Nutreco. The processor got a software product exactly suited to its needs, without having to do the development itself, and is relieved of the burden of maintaining it.
Case Study: Building up from sales analysis
Farbest Brands, based in Montvale, NJ, is a manufacturer and distributor of specialty food ingredients. Feeling that its ERP package was weak in the reporting and analytical area, in 2002 the company began looking for new software. After considering a number of suppliers, it chose QlikView, from QlikTech. The QlikView business analysis software suite is based on single architecture to cover all types of analysis and reporting needs. "We looked at other packages, including an offering through our ERP vendor," says Frank Volpe, director of operations, Farbest-Tallman Foods Corp., "and they were more geared toward large companies with deep pockets. The QlikTech solution was just perfect for us. They were just starting out in the US at that time, so it was good timing."
Farbest started with a sales analysis application, but after becoming familiar with the product, says Volpe, "we just kept finding different ways to use the product and developing other applications." QlikTech developed applications for accounts receivable and financials; after which Farbest took over and developed applications for inventory and production or work order analysis. "The next area we'll probably get involved in is on the purchasing side," says Volpe. "No matter what we think of, we look to this product first to see if it can accomplish [the task], because the development time is rather quick now that we've grown accustomed to it."
Payback from the initial application, says Volpe, took just a few months. With the original ERP package "there was no sales reporting; we'd have to sit there and build all the reports ourselves. With this, after three days we had an application where we could go in and look at our open orders, our sales history region and product line."
Another thing that made QlikView attractive, says Volpe, was that it was quick to implement and required almost no training. "We had no formal training other than looking over the shoulder of the consultant." The accounts receivable application took all of three days to create, Volpe explains, while the inventory application took about two weeks.
The company's CEO, adds Volpe, "marvels at the information he's able to get out of it. Before he had to wait for the controller to pull information out of the system, or someone to run a report. Now he has that on a laptop." The sales staff finds it especially useful when working from their home offices. "They will come in through a VPN and ... refresh the data, and at that point they can use the product off line," says Volpe. "If they are going to visit a customer, they can bring their laptops and review up-to-date information."
As Nutreco observed, working with a new supplier may mean educating that supplier along with in-house staff. In Farbest's case, says Volpe, that involved working with the QlikTech staff to adapt the software to the existing ERP package. While there was a QlikView template, he says, it had to be tweaked to fit Farbest's environment.
Case Study: Supplier management
Baldwin Richardson Foods, based in Frankfort, IL, manufactures a range of sauces, condiments, beverage and pancake syrups, dessert toppings and specialty fillings, including the Mrs. Richardson's® and Nance's® brands. In 1991, when it was a business unit of Quaker Oats, Baldwin Richardson had a number of different data handling systems, various technologies and multiple business lines, which made it difficult to aggregate information and obtain an accurate view of overall company performance. In addition, there were significant limitations in the quality assurance area. The system only allowed for manual lot tracing and mock recalls that took up to two days. In addition, the company had a network of more than 300 suppliers, making it difficult to track and coordinate among all the groups involved. The company needed to synchronize each order received and accurately plan for manufacturing to ensure final products were completed on time and customer satisfaction goals were met. Baldwin Richardson also wanted tools to evaluate each supplier based on performance metrics.
The company chose iRenaissance software from Ross Systems, Inc. Baldwin Richardson uses the software to optimize manufacturing, product management, distribution, asset utilization, supplier management and quality assurance. The software's integrated bi-directional lot tracing capabilities eliminated manual lot tracing procedures, which improved the turnaround time on lot traceability.
The software also aids in supplier performance management; access to real-time information has made it easy for the company to coordinate with its more than 300 suppliers. Generated reports aid in evaluating each supplier and determining historical performance levels.
Baldwin Richardson has since conducted a number of upgrades and implemented Ross' Internet Application Framework™ (IAF). The browser-based IAF architecture uses XML web services to provide connectivity to other internal and external enterprise systems, devices, people and processes.
In contrast to the manual lot-trace system previously used, the company can now achieve 100 percent traceability and can conduct mock recalls within two hours. In turn, this enables Baldwin Richardson to meet the quality-related standards of all its customers, including Kellogg's and McDonald's.