Duck farm employs an ERP warehouse management solution to streamline a complicated manufacturing process
The need to maintain product quality and freshness from factory to marketplace can complicate the food manufacturing process. When dealing with poultry products, the "freshness factor" is not just desirable, it is mandatory, regardless of whether the poultry is distributed raw or cooked. Thus, manufacturers require integrated inventory management capabilities, as well as streamlined manufacturing and shipment processes, to deliver fresh poultry products. Real-time inventory management is an essential component of production management.
Maple Leaf Farms, North America's premier producer of quality duck products, faced this precise challenge. Headquartered in northeast Indiana, this family-owned company raises more than 15 million ducks per year and distributes duck products from facilities in Indiana, Wisconsin and California. The company grows not only its own poultry, but also manufactures all the duck feed that supports its flocks. Thus, for Maple Leaf Farms, inventory control concerns occur earlier in the manufacturing process than for most other firms.
Maple Leaf recently implemented an enterprise resource planning (ERP) warehouse management solution (WMS) to track inventory levels accurately. The company partnered with VAI (Vormittag Associates, Inc.), an award-winning software developer, to design a multifaceted solution incorporating the multiple components of this complex company.
Challenges
Maple Leaf's unique business model required a comprehensive WMS package. Prior to implementation, the company employed a patchwork of non-integrated systems, primarily home-grown software and off-the-shelf products. Maple Leaf's warehouse software ran on a PC-based system. At the end of each day, all remaining inventory balances were transferred into an ERP program. Since the systems were not integrated, the balances rarely coincided. When warehouse system numbers did not match ERP numbers, Maple Leaf defaulted to the ERP figures and zeroed out the manufacturing totals. The company recognized that a serious disconnect existed between the two programs, as inventory adjustments made on the warehouse side were never identified at the ERP level. Also, the company was unable to quantify losses.
Maple Leaf required WMS and ERP applications capable of full integration. "We couldn't balance our inventory with our ERP application, and inventory shortages sometimes resulted," said Karen Pope, Manager, Business Applications, Maple Leaf Farms. "Yet, we needed much more than an inventory solution. We had to resolve the integration problem and streamline the entire manufacturing and distribution process at the same time. We needed a true WMS solution, and only a company willing to learn our business from the bottom up could formulate a workable solution. When VAI submitted its proposal we knew we had found the right company for the job."
Maple Leaf's complicated manufacturing process added a layer of complexity to any potential ERP solution and heightened the requirement for a highly skilled software developer. The complexity arose from two aspects. First, the manufacturing process is more comprehensive than what most food producers confront (i.e., from making feed and raising ducks to distributing products). Second, Maple Leaf utilizes every duck component in some way, sometimes as part of product manufacturing and other times as a separate product. For example, both solid and portioned raw ducks are sold at market. In addition, the company offers roasted half ducks, which entails a completely separate manufacturing process. When these ducks are cooked, the company captures the juices to include in sauces. Other parts (e.g., feet) are exported to Asian markets where they are considered a delicacy. Even the feathers are utilized by Maple Leaf's down product subsidiary. Nothing is wasted, and everything must be accountable within the inventory system at a very precise level.
Once production is complete and products are ready for shipment, they are boxed and transported to the distribution center. Since Maple Leaf operates multiple plants across the country, the solution needed to integrate all facilities and all phases of the manufacturing process. Key employees at various locales must know, in real-time, exactly where a duck is in the manufacturing process, where it is located in the warehouse and at what facility the duck product resides.
Solutions
Maple Leaf looked to IBM for assistance in locating a solution provider to design an integrated ERP and WMS package; IBM referred the firm to VAI. The team from VAI reviewed Maple Leaf's existing systems, analyzed business operations in detail and helped design S2K for Warehouse Management.
"We faced a formidable task in designing a WMS package for Maple Leaf," said Larry Murphy, Vice President of Research and Development, VAI, "but we knew that our experience in enterprise management software gave us the capacity to design a cost-effective, tailored, fully integrated solution to meet all of Maple Leaf's requirements regardless of the inherent complexity."
VAI's solution allowed the company to achieve all its objectives in one comprehensive package. Maple Leaf personnel simply scan each serial and lot number, which instantly records the transaction for inventory control purposes. The entire duck manufacturing process is tracked utilizing one keystroke because the system tracks the duck, in whole or part, and all the transactions that occur. If, for example, a duck is portioned for shipment, VAI's ERP package is sophisticated enough to track every duck part, its locations within the manufacturing facility and the quantity available for delivery.
Notably, the system tracks every scan, giving Maple Leaf a full inventory track and movement history as well as a complete employee efficiency tracking system. The efficiency tracking system evaluates warehouse employee performance, monitoring each scan and providing management with a detailed or summary analysis of employee work completed on a daily, weekly or monthly basis. The system also monitors batch and order totals and provides real-time area data analysis.
Results
The ERP implementation yields greater inventory control for Maple Leaf and enhances customer service. With easily viewable, accurate inventory levels, sales staff can ensure that a product is available for shipping at the time of purchase. Warehouse staff is benefiting, too, as VAI's solution pinpoints what products need to be moved, shipped or picked. The invoicing process is totally streamlined. As a result, products reach the market more quickly, guaranteeing product quality and freshness. In fact, virtually every aspect of Maple Leaf Farms' business benefits daily from the implementation.
Maple Leaf soon plans to install the ERP package at its feather operation. This subsidiary sells finished goods, mostly bedding products, as well as feathers to furniture and bedding product manufacturers. The desired outcome is timely decision making achieved by placing aspects of the operation on the same network and allowing all data to be viewed concurrently in real time.
Maple Leaf also intends to work with VAI on an e-commerce application. Specifically, VAI will set up an Internet portal to enhance Web orders from the company's Web site, where customers will be able to order direct. For Maple Leaf Farms, this capability will translate to expanded sales and enhanced revenue. These next steps build on the efficiencies achieved in the initial implementation and suggest great things for Maple Leaf Farms in the future.
