MÃ¼ller Dairy (UK) manufactures some 800 million pots of yoghurt per year in a range consisting of around one hundred different flavours. The company’s Shropshire site provides cold store warehousing to service the distribution needs in the UK and Ireland.
A major challenge for MÃ¼ller’s operation is to manage the frequent changes to the weekly production plan and subsequently to the daily schedule based upon market demand, forecasts and stock cover. The key requirement focuses on the filling lines for the two areas of fruit manufacture and yoghurt, rice and fromage frais manufacture.
A prerequisite for the efficient running of these areas is to get real time visibility of the manufacturing process in the MÃ¼ller Dairy factory. To do this, the company needed to interface the enterprise resource system (ERP) system with our automated warehouse management system (WMS) which runs a new high bay warehouse. In addition, an integrated business system has to support the process manufacturing operation, which would facilitate better and more accurate financial analysis.
During a recent expansion, the most painful business issue at MÃ¼ller was planning and scheduling. The company needed a better way of handling and managing the short lead times demanded by customers.
The production plan is derived from a manual forecast. Sales orders, picked quantities and stock figures are maintained on a spreadsheet. The sales forecast is always made at the product group level but these cannot always be taken at face value.
To cope with short lead times, the production plan must be continuously modified based upon each day’s pick. Production is adjusted accordingly in order to maintain the given stock cover, which is normally five days or less.
There are four different types of line used in the filling process and MÃ¼ller engineers realised that they needed to schedule demand by generic machine line. The system will derive the daily running order, which then needs to be scheduled across the machine groupings while taking into account the varieties required and their accompanying manufacturing constraints.
Five years ago, MÃ¼ller Dairy (UK) approached its German parent requesting help in the automation of the scheduling process whilst simultaneously providing a fully integrated ERP solution to solve all the other requirements of the other part of the business. Germany suggested that the evaluation team should look at Ross Systems (UK) and its ERP package Renaissance CS – known as RenCS.
The software chosen had to run effectively alongside existing, the in-house written WMS, an Oracle database running on Hewlett Packard hardware with an HP-UX operating system.
The implementation of the ERP package was broken down into four phases. Phase 1 included the modules relating to finished goods management and distribution; Phase 2 includes the modules relating to finance, raw materials, process planning and process manufacturing. MÃ¼ller decided to implement the process planning module before the process manufacturing module.
Normally, this is done the other way around. Phase 3 includes sales forecasting, maintenance management and fixed asset control and phase 4 looks after transportation and service.
The first stage of the project has produced some noticeable benefits and results. EDI invoicing has now been successfully implemented for most of the big customers.
Finished goods management and the WMS were installed, integrated and tested simultaneously and the combination of the two new systems working together has resulted in greatly improved business processes, such as fewer short picks. The design of an automated high bay warehousing system means that the first human handling of finished product in the factory is at the picking stage, just prior to finished product despatch. The level of confidence in the system throughout the organisation has risen significantly. One manager remarked that Phase I led to a ‘better management of stock, fewer mistakes, faster access to information and a belief in the numbers coming from our ERP system’.
The quality of data that drives the information on which senior management base their business critical decisions is of a significantly higher quality and gives everyone confidence that business decisions are based on relevant and reliable information.The very process of implementing an integrated ERP system at MÃ¼ller has also yielded operating benefits. People from different departments are beginning to communicate and share their data and knowledge with each other.
Mutual understanding of the business processes in our organisation has been improved and standard operating procedures have been documented and are in use. MÃ¼ller employees have gained much greater awareness and now appreciate the importance of the concepts of supply chain and customer service.