From baby food to milk powders
The take over from Phoenix in the Netherlands (Scharsterbrug)
Phoenix, a new dairy products manufacturer, opened its doors in Scharsterbrug on 1 January 2003. No longer would baby food in consumer packaging roll off the Scharsterbrug production line, but bulk packs of powdered milk, now that Phoenix B.V. had taken over the Nestlé factory. Phoenix B.V. produces a variety of dairy products and intermediates for the bakery and confectionery industry and other sectors, to customer specification. In the period leading up to the takeover, Phoenix had the task of planning the future organization of the new company. The main point for attention was new software for the accounts and logistics administration systems. Sjors Reekers, the Head of Administration, was closely involved in the project, and now, one and a half years later, he can look back with satisfaction. Increased production capacity and a broader range of products.
"It was a major change for everyone. Baby food is a product with many additives, that has to satisfy stringent requirements, and is made in dozens of different variants. Now, however, we actually have just one main product, powdered milk, although there are still many variants. The greatest upheaval has been in the administrative computer systems, both for bookkeeping and for production, plus large-scale technical stores. We therefore look back on 2003 as a year of learning. Actually, 2003 went very well, because we managed to enhance the drying capacity by 100% and we are making more product variants. But, of course, a certain amount of trial and error was involved", Sjors Reekers recalls.
Microsoft Dynamics NAV & Schouw Informatisering
"When we looked at the computer systems with our main client, Vreugdenhil BV, we decided that Microsoft DynamicsTM NAV would match our requirements the best. In my opinion, one of Dynamics NAV's major advantages is how simple it is to retrieve large amounts of information and export to Excel for producing reports or for analysis", Sjors Reekers explains. "We selected Schouw Informatisering as our implementation partner because of their knowledge and experience in the food industry."
Traceability
As is common in the food sector, Phoenix' systems have to support forward and backward traceability of all goods. Sjors Reekers explains the complexity involved. "To give just one example, our clients all demand different fat percentages for the powdered milk. In order to satisfy this range of requirements, the milk has to be mixed in the right proportions, not only before the conversion to powdered milk, but also during the drying process. This process consists of several steps: the milk is mixed and tested to bring it to the requested fat content, after which, both before and during the drying process, various mix products are added to satisfy the requested specification. Mix products include basic components, such as vitamins, lecithin and whole milk, as well as skimmed milk and cream, which we make ourselves or buy in. After release, the powder is packed in the various types of packaging. Schouw Informatisering has developed Tracking & Tracing extensions to Dynamics NAV. The traceability of all batches is now guaranteed", Sjors Reekers is pleased to say.
Things were different in practice
The implementation proceeded far differently from what was expected. "The Dynamics NAV implementation was hampered because the company itself was not yet up and running when everything had to be implemented, even though production was in full swing". Sjors Reekers explains the implications: "We couldn't use practical experience as a guide.
For example, we assumed initially that Phoenix would work with its own cost price and standard price, because Phoenix is an independent company. But after we started, we soon realized that working in that way would present many practical problems, especially for the clients. We therefore decided to act as a contract dryer for the largest client, so that the internal cost prices and standard prices could also be abandoned", Sjors Reekers continues.
"In other words, many modifications were also needed in Dynamics NAV. For example, the financial processing of the sales accounts disappeared completely. But the administration of the production and the actual release of goods, in other words the entire goods flow, had to remain intact. This meant that we couldn't simply throw away everything that was already registered." Sjors Reekers: "You could say that we have implemented certain parts of Dynamics NAV twice, purely because we changed our minds in practice about how we wanted things to be managed."
Compliments
"A major obstacle was that the factory never stopped, and there was hardly any time for proper preparation", Sjors Reekers observes. "In other words, one owner left and the other moved straight in. And everything just kept running, except for the administrative systems. What is more, we didn't yet know how certain components of the administration would have to be organized, partly because of the short preparation period.
Schouw Informatisering helped us a great deal on this point. With their experience, they could point out to us the opportunities, advantages and disadvantages involved. Schouw also assisted us excellently by guiding the organization change that a takeover of this kind involves."
The Dynamics NAV implementation had an impact on virtually all our staff. Schouw understood fully at the outset that we in Phoenix not only had to work with a new system, but also had to get used to a new function at the same time. Sufficient attention was devoted to this aspect during the implementation and the training course, and for that they deserve my compliments."
Objectives realized
Phoenix now has 12 simultaneous users and is using the Financial, Stock, Logistics, Production and Purchasing modules. "As for how well the project objectives have been achieved, I can say that we have succeeded in bringing the financial accounting system and goods flows under control. Dynamics NAV is a user-friendly program that fits in well with our wishes and business processes. One small point of criticism is that some standard Dynamics NAV screens are rather complicated for use on the shop floor. I find it hard to speak in terms of ‘Return on Investment' because we started from absolute zero, and I have no figures from experience to base a statement on."
"However, what we have seen so far is that Dynamics NAV expands flexibly to suit the changing situation. We have actually grown from 18 to 31 regular staff, and something like 10 temporary employees also work here at any one time. We opened a second packing line and a bulk loading station in 2003, the drying capacity has been extended by 100% and an additional silo has recently been installed for the incoming milk. After a year of adjustments, the factory, and especially Dynamics NAV, are now running to our full satisfaction. We have laid a firm foundation on which we can build for the future. And, if necessary, we can broaden this foundation even more, which is a comforting thought" Sjors Reekers concludes.
