When it comes to babies the quality and safety of everything they play with, wear and ingest becomes a matter of critical concern to parents.

Dairy Goat Co-operative Ltd (DGC) developed the first ever infant formula based on goat milk in the late 1980s as well as building the world’s first factory designed specifically to manufacture goat milk nutritional products.

Systems to support quality control are crucial to DGC’s business so ensuring those systems’ stability, as well as minimising risk, has become an ever-more pressing issue as the company has gone from strength to strength.

A high risk legacy
DGC had been running a selection of disparate legacy systems, the most crucial being Filemaker Pro which handled, amongst other functions, that of product grading – an operational kingpin.

The customisation of Filemaker Pro to match DGC’s requirements was done by a local developer, with no supporting documentation or knowledge transfer.

Although the system was relatively stable the substantial risk to the company arising from being totally reliant on a single person became even more apparent when the developer was attending an overseas conference.

Keith Arnold, DGC’s IT manager explains: “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. One of our new staff deleted the whole database. The developer was in Houston and we had no local support. Luckily we got him on the phone and he was able to log in and restore a back up for us. We were definitely vulnerable though, and this really highlighted just how much so.”

As well as Filemaker Pro, the company utilised Exonet for its financials and IMS (a proprietary ingredients management system) to control the precision addition of micro-ingredients to the products. There was also a considerable reliance on some extremely lengthy and complex spreadsheets for reporting and planning.

“The combination of systems meant we were hugely vulnerable,” says Arnold.

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, the 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,” says 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.”

DGC proactively evaluated several ERP/MRP options; Microsoft Dynamics AX along with leading Dynamics AX implementation partner, Koorb Consulting, was selected.

“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,” says DGC’s general manager – corporate, Renzo Vettori.

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 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,” says Arnold.

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,” Arnold says.

The Dynamics AX grading solution that Koorb developed offers enhanced performance, primarily due to its integration to AX inventory and quarantine management systems. 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.

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,” he says.

Other quality orientated projects in progress are the provision of both an RF warehousing solution and a suppliers’ payments system.

A very certain future
For Vettori, Dynamics AX is part of DGC’s 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.”

For more information

Koorb Consulting
www.koorb.com
Nicholas Birch
nbirch@koorb.co.nz
Ph 09 361 1304

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