The last few years have not only seen a rapid expansion of lucrative markets for Old Fashioned Foods Group products but also the addition of several valuable acquisitions. Now sitting proudly under the Old Fashioned Foods umbrella are PLC (Private Label Contract Manufacturing) and iconic food manufacturer Hansells NZ Limited. To support its European market, Old Fashioned Foods has a London-based distribution arm with warehousing in the Midlands.

Old Fashioned Foods had been using Microsoft Dynamics AX as its fully integrated business solution since 2001. With the organic growth of the New Zealand and Australian business, the addition of the new companies to the group, and its expansion into the UK, the need for total visibility across all the businesses became a primary business objective.

The roll out of Microsoft Dynamics AX V4 throughout all the businesses within the period of a year was determined to be the most effective way to achieve this, as well as ensuring best business practices were in place throughout the organisation.

Upgrading to best practise
Old Fashioned Foods originally had Dynamics AX implemented to support its plans for substantial growth and the need to gain greater control of the manufacturing process. In 2002 it selected Microsoft Gold certified partner Koorb Consulting to review its systems and procedures after discovering they were only using a fraction of the functionality of the product.

According to Old Fashioned Foods Group’s Dynamics AX project manager, Mary Rose Lumgair, the upgrade from V3 to V4, or in some cases direct to V4, across the group went smoothly overall.

“The whole roll out and implementation was very well managed between Koorb and Old Fashioned Foods. With the new version we even got some unexpected bonuses like the one found in Production 3, which enables us to have a Gantt chart to view our planning – something we’d always wanted.”

First in line
Auckland based contract food manufacturer PLC (Private Label Contract Manufacturing) offer end-toend services ranging from initial product concepts through to contract packing for some of New Zealand’s largest FMCG companies, as well as warehousing and distribution.

PLC already had excellent business processes in place, so the transition from their legacy system to Dynamics AX V3 in April 2007 (with the upgrade to V4 to follow shortly after) was unflustered and painless.

Lumgair commented: “The implementation at PLC went very easily, Koorb were great, their considerable experience really came to the fore. They sat down with staff at PLC and scoped out what they thought we needed – which was to initially implement the Financial, Sales and Inventory modules of Dynamics AX. Then we literally just put it in - it was the simplest and the easiest of all the jobs we’ve done here, and the most successful. Probably because the people at PLC were so well organised and structured and already had such good processes. And of course there was that immediate gain of transparency.”

Hansells
Old Fashioned Foods Group’s newest acquisition, Hansells, has a large range of products that are firmly entrenched in most Kiwi households. Along with their renowned baking products they also make powdered drinks, juice concentrates, instant desserts, cereal, soups, homemade yoghurt and artificial sweeteners under the Hansells, King, Empire, Vitafresh, Baker Halls, Yog-it and (under license) Weight Watchers brands.

When the purchase of Hansells was finalised in December 2006 the existing ERP was a combination of cumbersome code-driven legacy systems only used by very few companies in New Zealand.

Although long term familiarity meant the comfort levels within Hansells with the old system were high, its shortcomings compared with Dynamics AX were quite a shock to many users. Lumgair commented: “There was a high level of confidence with actually using the system but a shortfall in understanding why the system did things or how it worked. We’ve now set up training days to up skill planners and those who were just using the old system by rote, so we’re now able to demonstrate the impact of each action the whole way down the line.”

Since going live with Dynamics AX V4 on 1 April 2008, visibility of stock has improved considerably. Like PLC, Hansells already had good processes in place, and these were supported by thorough documentation. The bringing together of a range of FMCG companies has presented an opportunity to “cross-pollinate” and elect and implement those processes which work better for the Group as a whole.

UK distribution arm
With a growing number of European customers the establishment of a distribution arm for Old Fashioned Foods Group in the UK had been a logical step.

For Old Fashioned Foods being able to view the sales was crucial, and this again was a key driver for the implementation of Dynamics AX. Lumgair says: “Sales drive the forecasting, which is driving manufacturing and purchasing. We don’t want to build up stock, so one of the key things ERP gives a business is that control of inventory, both raw materials, packaging and finished goods. But it’s got to be tightly managed as well. So we’ve also brought in a Demand Manager, who sits centrally and looks at forecasts for everybody and controls that part of the business. We’ve now changed from a ‘Make to Stock’ business model to a ‘Demand Driven’ business model.”

The London-based distribution arm has an offsite storage facility in the Midlands. With the office in London, distribution is from Old Fashioned Foods via sea to the Midlands and then on to the customer.

“There is considerable pressure to implement an EDI system,” says Lumgair, “that bounces orders straight into our Dynamics AX system. Australia is the same - they have an EDI with Coles and Woolworths and New Zealand will also implement this as some of our main customers are requesting it. With this sort of drive from our customers EDI is going to become a basic business requirement.”

Super users
To effectively support Dynamics AX across all its companies, Old Fashioned Foods Group boasts a whole network of Dynamics AX super users. For Lumgair the set up of this super user group was a way of ensuring the group had the capability to maintain and grow Dynamics AX regardless of changes within the company. “We’ve set up a team and we’ve trained them and we’ve formed them into a group. We’ve got a super user out of every department,” says Lumgair. “So, for example, there’s a super user for planning and then the planning super user becomes the group super user so he can then cross train other planners. Our aim is to build the capability in the businesses.”

Going forward
By uniting its companies through the implementation of Microsoft Dynamics AX across the entire group of companies and offices, Old Fashioned Foods Group has achieved its aim of full visibility. Gone are the days where stock is manufactured and accumulated based on unclear forecasts, the group can now manufacture and supply precisely to demand, gaining huge efficiencies and savings.

For more information
Koorb Consulting
www.koorb.com
Ph 09 361 1304

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