As the world's leading manufacturer of goat milk nutritional
powder products Dairy Goat Co-operative's (DGC) leadership
position has been supported through a ceaseless attention to
quality control.
The quality controls within the company are paramount. From
on-farm practices through to product manufacture and packaging, all
processes are subject to audited Risk Management Programmes.
The systems to support quality control are crucial to DGC's
business, and in turn to their customers, so ensuring the system's
stability as well as minimising risk became an ever more pressing
issue as the company went from strength to strength.
A high risk legacy
DGC ran their company with a selection of disparate legacy
systems, some of them highly customised with no supporting
documentation or knowledge transfer. The degree of vulnerability
this place on DGC was highlighted when one of the local developers
was overseas.
Keith Arnold, IT Manager for DGC explained: "About three years
ago, when we were turning over $50 or 60 million and teetering on
the edge thinking what if something did happen to him, we actually
did have a problem when one of our new staff deleted the whole
database. We had no local support but luckily we got hold of the
developer and were able to restore the data."
However going forward it was obvious that as DGC become a
bigger company they needed a more stable and reliable business
platform.
Renzo Vettori, General Manager - Corporate, echoed these
sentiments. "I think the big problem for DGC was that it wasn't
integrated and we were reliant on too many spreadsheet functions
for some of our planning requirements. We needed a system we
could be reliant on, not just one person."
The move forward
The lack of integration between the systems presented DGC with a
range of issues. With low stock level and costing accuracy, as well
as difficulty in producing management reports, the ongoing growth
of the company demanded the move to a single stable and highly
functional solution. As well as replacing Exonet and Filemaker Pro
and a new solution was required to integrate with and control
IMS.
"Our situation at the end of 2007 was that our sales were being
managed in one of the databases and then the financial reporting
was being done in the Exonet database, and then the planning for
those was done in a spreadsheet," commented Arnold. "So you had no
direct linkage for what theoretically is the same transaction and
we were effectively double keying things a lot of the time too.
Moving data from one system to the next just didn't make sense.
"We could see with the growth in the company that was due to
come on in early 2008 that the planning and procurement side was
going to stretch our spreadsheet based systems, so the time had
definitely come to move to a totally integrated solution," said
Arnold.
Longevity and stability
DGC proactively evaluated several ERP/MRP and
selected Microsoft Dynamics AX based on its longevity,
stability and flexibility along with Microsoft New Zealand's
leading Dynamics AX implementation partner, Koorb Consulting.
Vettori commented on the selection. "I think Microsoft has
strong reporting functions, especially on the financial side of
things, it has a long term roadmap, and AX certainly won hands down
for user friendliness."
Winning developments
Koorb was a natural choice for DGC as their partner in view of
their number of local implementations and an understanding of the
dairy industry. "We chose Koorb from a selection of Dynamics AX
partners available in New Zealand as we felt that their range of
experience was probably wider," said Arnold.
"We saw Koorb had a good fit and ongoing support as well, and
felt if they were doing more installations than anyone else they
would have more support. We've got to be realistic here; the
longevity of the company is going to be more viable if they're
doing more installations."
The requirement for product grading as part of the new
integrated system (previously handled by Filemaster Pro), was a
crucial one, and Koorb developed this as a specific module within
Dynamics AX.
The existing product grading function was used as a model for
the new Dynamics AX module. Arnold was pleased with the results.
"With the new module that Koorb built within AX we've addressed
that stability issue, and I feel more confident with our grading
system being handled in the same database. Filemaker Pro, although
it functioned well, is just an open database and you can write it
any way you like - whereas AX has more processes and boundaries
that you've got to work within. So long term, I believe that AX is
actually going to protect us more."
The Dynamics AX grading solution that Koorb developed offers
enhanced performance, primarily due to its integration to AX
inventory and quarantine management systems. Products are
quarantined directly off the production line until grading is
completed. It facilitates "hot shipping" where product can be early
released prior to final grade being issued, so the supply chain
demands can be fulfilled. Once final quality result are received,
the early released product is graded and can be traced through AX
inventory and production processes. The new grading system was
re-designed to meet the requirements of different operations such
as the canning process where quality samples are based on time
rather than lot samples.
The development of functionality to generate export
documentation within Dynamics AX was also well received. The
documentation is clean, clear and consistent, providing both
quality information and a professional image. "Now we've got this
documentation package that Koorb developed which is just
brilliant," commented Arnold. "It's another feather in their cap
and I can see it becoming something they can offer to other
companies as an off-the-shelf AX enhancement."
Microsoft's Dynamics AX underlying best business practise was
easily aligned with DGC's own processes. With only minor changes in
the way things were done, according to Arnold, the implementation
was a relatively fast and easy process and user uptake and
acceptance has been rapid.
Planning to succeed
Planning has always been a difficult issue for DGC as they deal
with a fresh milk product in its raw state, with a seasonal peak.
The peak has to be levelled to cover 12 months supply so good
forecasting is critical, especially realising that DGC's own
customers don't always forecast well themselves. Dynamics AX
provides the company with better tools to effectively manage
forecasting and even out the peaks.
For Arnold the planning coming in to the inventory system is a
highlight of the Dynamics AX solution. "Previously there was all
this double keying, backwards and forwards between taking database
information and putting it into the spreadsheet to be able to do
planning. There would always be questions as to whether the
inventory was right. With AX we don't have those concerns."
Aiming for quality
Other quality orientated projects in progress are the provision
of both an RF warehousing solution and a suppliers payments
system.
While the RF solution provides the obvious benefit of accuracy
in inventory management, a driving factor for the solution is about
quality management. It will ensure that products being issued to
the production line are both the correct product and the correct
grade. The automation systems will scan products at the exact time
its issued to the line and interfaces this information back to
Dynamics AX. If a potential issue is identified, DGC are able to
isolate the products affected for further quality testing.
The supplier payments system is being developed to meet specific
and unique payment models which support farmer shareholder
co-operative structure as standard dairy industry business
practice. Further to being a solution for paying the famers for
supplying their milk, it is also a quality system. It informs the
farmer of issue in quality of milk supplied in the most efficient
manner, so corrective actions can be taken immediately on farms.
This will be achieved through the enterprise portal, email, fax and
even SMS messages to the farmer. This is a significant benefit for
the farmer and dairy company, and is all about quality, with higher
quality reflecting better returns.
Achieving visibility
Dairy Goat executives required visibility of their Key
Performance Indicators in sales and production.
Koorb's solution incorporated custom-developed Inventory and
Sales cubes. SharePoint dashboards show milk production at the farm
through to finished goods in the export warehouse. SharePoint
dashboards are also used to show sales with actuals compared to
budgets and forecasts.
Reporting Services reports have been developed to support the
rigorous production quality testing regime that is managed in
Dynamics AX.
A very certain future
For Vettori, Dynamics AX is part of their future. "We had looked
ahead, at our new canning plant and our part ownership of Dairy
Blenders, and what we had simply wasn't sophisticated enough to
take us forward. Our plan is to incorporate them onto the Dynamics
AX system down the track and get full transparency across the whole
business. AX can, and will, help us achieve this."
Arnold is also more than comfortable with the partnering of DGC
and Dynamics AX, happily concluding: "I think the capabilities of
the system will see us right for a very long time to be
honest."
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Quick Facts:
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| Workstations: 15 |
Industry: Dairy
Produce/Wholesale/Distribution |
Project Type: ERP implementation |
| Website: www.dgc.co.nz |
Customer Size: Medium |
Year: 2007 |
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Solutions:
MS Dynamics AX V4 SP2
MS Windows Server 2003 R2
MS SQL Server 2005
MS SQL Reporting Services
MS SQL Analysis Services
MS Dynamics FRx Reporter 6.7 SP10
Atlas XL - Globe Software
Ingredients Management System - Automation & Dispensing
Solutions - CTEK
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Functional areas:
Financials, Fixed Assets, Trade, Logistics, Master Planning,
Production and Business Analysis
Scenario:
Enterprise Resource Planning, Financial reporting, Forecasting
and planning, Product grading, Export documentation
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Benefits:
Integrated quality control
Stability with low risk solution and strong local support
Ease of use with quick adoption by users
Planning - delivering lower inventory, better customer service,
lower costs in the supply chain processes
Grading - improved QM throughout the supply chain
Improved inventory accuracy
Improved documentation
Capacity to support the substantial growth plans
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