The more consistently a meat processor uses ERP software for process optimisation, the more efficient the company gets, as New Zealand-based pork producer Freshpork found with industry specialist CSB-System.
New Zealand is one of the few countries not yet affected by African swine fever. For pork processors, however, big challenges come from the other meat sectors. The domestic consumption of pork is well behind chicken with pressure also coming from beef and lamb.
“Moreover, there is a building pressure from the imported pork into New Zealand, mainly from Spain, US and other low-cost countries, which are putting high pressure on the price in New Zealand. More than 60 per cent of the consumed pork is imported meat,” said Odhran McCloskey from Freshpork, one of the largest processors of New Zealand produced pork for the domestic market.
Only a few years ago, the Freshpork management initiated a major review of its software platform. One of the primary goals was to introduce an integrated solution and eliminate existing point solutions (including manual and paper-based processes).
“Originally, we wouldn’t have had much computerisation with most processes being manual and/or paper basis. This was obviously not sustainable for our growing business, so we acquired and built some niche solutions. These proved worthwhile for a period but still necessitated a lot of ’baby-sitting’,” said McCloskey.
Keeping systems in sync was an intensive task – there was a lot of double entering of data and little cross-business visibility of information,as well as many MS/Excel spreadsheets and custom VBA, with all its associated overhead and back office work just to “keep the lights on”. In addition, there was significant reconciliation effort required to run the business on a daily basis.
“Data reconciliations with all its time consuming, error-prone issues were our biggest bugbear. We also had poor visibility of stock levels across our business and stocktaking exercises always highlighted the degree of error inherent in our business,” McCloskey said.
One software to control it all
Where there used to be isolated solutions, today there is a complete solution with uniform data for all processes. They are based on streamlined production processes that have been fundamentally optimised with the ERP software from CSB-System.
The software is implemented in almost all areas and links abattoir, cutting floors, packing, dispatch and distribution, sales and finance. “CSB was the solution that scored well across all the areas we needed to cover. Another important factor for us was the CSB people we interacted with during our assessment understood our industry and terminology. While some other software suppliers could ’talk the talk’, we felt that CSB genuinely understood the pork business and the role that an ERP could play in that business,” said McCloskey.
A number of operation efficiencies
According to New Zealand´s Meat Industry Association (MIA), the meat sector is the country´s second largest manufacturing sector, providing jobs for 25,000 people at more than 60 locations nationwide.
As with the implementation of any major computer system there were a number of challenges. Chief among these was the cultural shift necessitated by using an ERP. However, Freshpork are now beginning to reap the benefits of having an ERP.
From the IT point of view the main benefit is to have all core operation data and information in a single source system. They are now able to see the flow of their products in real time going through the system, from the carcass to created products to the finished goods and shipments with all financial impact to these products and the supply chain. In addition, having a single system means, there is no reconciliation required in the background.
From an inventory point of view, the ability to look up the stock at any given time is very important, along with visibility of the production process (including relevant reports for daily operations), all from one single system.
“One of the main goals for this implementation was to have a single flow of goods in a centralised system, while covering all our sector-specific and customer requirements,” McCloskey said.
“Over time, Freshpork have realised a number of operation efficiencies and today we have a level of consistency in our customer documentation, invoices, delivery dockets, and more, that we never had before. Nevertheless, ERP implementations are difficult and the effort should not be underestimated.”
Get smarter and grow
Established in 1985, Freshpork is the country’s leading pork processor and wholesaler. For over three decades, the company has been 100 per cent privately-owned and managed by the Glass family, and today processes approximately one third of New Zealand’s pork to markets across the country. The company employs about 180 employees across six sites in New Zealand, with processing volumes of about 4000 pigs per week.
“We are under pressure both from the industry and the market. We have to look into more than just our wholesale base and continue to look at how we can both add value and expand niche revenue streams,” said McCloskey.
“Therefore, we anticipate looking deeper into the cutting floor to expand and improve our view on BOM’s and yields and the integrated production and coverage planning. Recipe management is something CSB is particularly good at and again we can see ourselves making more use of this. In other words: CSB is our world for anyone sitting in front of a computer or moving products and material around,” said McCloskey.
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