With breakfast cereals like Vanilla & Peach Muesli, Yours Fruitfully and the coffee flavoured Cafe au Lait, Auckland-based Hubbard Foods has for years set high standards in both its product innovation and its community-centric corporate philosophy. But although Hubbards have made great strides in market share and brand recognition terms over the last 10 years, behind the scenes its ERP systems were slowing the business down.

Beyond manual
Since Dick Hubbard founded the company in 1988, Hubbard Foods’ manufacturing and distribution processes had remained predominantly manual - with all scheduling and stock information captured in either hard copy or a series of disparate spreadsheets.

By 2002, Hubbard’s CFO Craig McGregor says the company had reached a size which could no longer be supported by manual processes - and it was experiencing a number of challenges. “We had major inefficiencies within our product scheduling, inventory control, and reporting,” he says. “We ended up with wastage and we were carrying much more stock than we actually needed. The processes were also time consuming, meaning we were reactive rather than proactive, and we really needed to take control of our business.”

Dick Hubbard explains why he decided to take the company to the next level by adopting a technology solution that would automate its business processes. “My belief is that because of the increasing speed and complexity of business today,” he says, “it’s crucial to have sophisticated IT support. Companies that fail to take advantage of the right technology will be doomed to mediocrity.”

Matching technology to business
Hubbards started actively looking for an integrated business solution that could manage the company’s complex manufacturing, distribution and financial requirements. “Our business is very complex,” says McGregor. “Producing just one type of cereal can involve as many as five different processes. We needed to be absolutely sure that the solution would be flexible enough to cope with our needs, so we talked to a number of other companies within the manufacturing industry for their opinions on the systems they were using.”

Hubbards finally selected Dynamics AX, supported by Koorb Consulting. “All of Koorb’s reference sites were very positive and Dynamics AX proved to be a good match for our business.” McGregor adds that technology partners Koorb took the time to get to know Hubbards’ business. “The Koorb team were very down to earth and genuinely wanted to help our business,” he says. “They quickly understood what made our business tick and helped us clarify our goals for the project.”

Dynamics AX is helping Hubbards optimally run their business by providing the company with accurate production and inventory information - and reducing the administration time for a number of financial tasks. Microsoft Business Solutions’ Paul Muckleston, says that Hubbards’ decision to use Dynamics AX showcases the product’s manufacturing functionality and ability to meet complex business requirements as well as grow with the business.

“This implementation highlights how the combination of a flexible product, experienced implementation partner and a customer that recognises the integral role technology can play in growing their business, leads to a very successful outcome.”

A new efficiency
Since Dynamics AX went live in November 2002, Hubbards has been able to streamline a number of its operational processes, including warehousing and production scheduling, and Dynamics AX sales forecasting has given the company greater business insight. “Our production scheduling is far more efficient,” says McGregor. “The data is available in real time, so we can accurately monitor our stock and plan and report on production more efficiently. The information allows us to analyse our production variances, which means we can optimise resources and run the factory a lot more efficiently.”

McGregor says Dynamics AX gives Hubbards complete control of their warehouse and more transparency in the business because information is available in real time. “More importantly,” he says, “we have the confidence that the figures are accurate - we now know exactly what stock we have and in what quantity - and can be more proactive about the business.”

Hubbard’s planning, production and logistics department all use Dynamics AX to help run the factory and warehousing operation. “First, we’ll use Dynamics AX to set the production schedule. All the work orders are generated and then the system determines the cost of production. Once the orders have been closed off, Dynamics AX reports on our outputs. We can see exactly what something should cost and compare what was actually produced.” Once the logistics team have receipted and dispatched the goods, Dynamics AX automatically generates an invoice which is sent to Hubbard’s accounts department.

A paperless solution
In addition to creating efficiencies within the manufacturing process, Dynamics AX is helping streamline Hubbard’s financial management and cut down on administrative costs. McGregor says that, on average, the company generates in excess of 250 invoices a week as well as financial documentation for the products it ships overseas for export every two to three days.

“The fact that Dynamics AX is paperless has been really beneficial,” he says. “All our financial data is stored electronically, which means that the information is easily accessible. There are also no month-end cut offs with Dynamics AX so we no longer feel pressured to complete one month’s financials in order to start the next month. The system allows us to keep the accounting period open for as long as we need to.” Dick Hubbard says that although the project is still in its infancy, the company is confident it will gain a return on its investment. “IT development is a journey and not a destination,” he says, “and I believe we will continue to capitalise on our investment for a long time to come.”

For more information:
www.hubbards.co.nz

Microsoft Business Solutions
Anne Frith
09 357 5850
askdynnz@microsoft.com
Microsoft New Zealand
PO Box 8070, Symonds Street, Auckland 

March 2004

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