Experience from the pandemic has shown us that investments in digitisation do pay off. The bakery Linauer Backstube has optimised a large part of its processes with ERP, and recently launched its B2B online shop.
Daniel Broschek, head of logistics at Linauer Backstube, looks back on a turbulent year that brought new challenges every day – but also a steep learning curve. For example, they had to respond quickly to volatile demands, and to organise spontaneously incoming orders with maximum efficiency.
During the coronavirus crisis, the bakery based in Lichtenwörth had to be very flexible in their performance. On the one hand, it lost one of its most important business lines, the restaurant industry. At the same time, Linauer very frequently received short-term orders from groceries, and its own business with 13 subsidiaries was increasingly characterised by “planning on demand”.
On the whole, the lot sizes in the production of the about 800 products were continuously reduced, while the number of order changes increased. This led to overall higher changeover times, great uncertainty in production and HR planning, and added pressure on the productivity of the individual departments.
“Our ERP has helped us to counteract these challenges. Especially, because it gives our factory the benefit of industrial efficiency and at the same time, it provides better planning results. Functions such as rescheduling orders at short notice, quick access to the latest inventory data, order picking with mobile devices, and maintenance substantially speed up the work at the bakery,” says Broschek.
Fiercely competitive market drives digitisation
The bottom line is that the software helped them to overcome the crisis. Yet, the initial motivation to introduce an ERP system was entirely different. In 2014, the executive management team of Karl Linauer kicked off the project for an integrated system, after several factors had pushed the digitisation in the bakery industry for years: expensive raw materials, strict requirements on traceability and labelling, and a tremendous amount of work for certification are just three of these topics.
Add to this new consumption habits and the general complexity in the handling of fresh foods.
A high degree of market saturation further increases the cost and innovation pressure for the companies.
“This can only be solved through far-reaching digitisation in the companies, as other measures for cutting cost and increasing efficiency have already been exploited to a large extent. And the basis for digitisation is an ERP system,” Broschek explains.
The ERP system must handle the central data management as well as essential control functions. “At some point, you can no longer work efficiently with stand-alone solutions. With sales, production, and logistics using their own IT systems, and with differing master data in supply chain management and in labelling, data has to be maintained multiple times over. And this is where the problems begin that cost you a lot of time.”
Clean data saves time and facilitates audits
By introducing the ERP system, Linauer was able to break open its previous IT structures. Today, labelling has been largely automated and is considerably less time-consuming. According to Broschek, one operative is sufficient to maintain labelling, product specifications and QA tests in a single version in the ERP system, and to keep the information up to date.
“In this way, we have saved a lot of time and money. And for every audit, whether IFS or Bio, we have really clean data. The information on the labels is identical to the details in the specification.”
The flexibility of the system is particularly helpful here, because it enables ad-hoc adjustments. “We have a lot of options to test new functions ourselves and to implement them,” reports Broschek. This also enables quick improvements in the day-to-day business that cost next to nothing because they can be implemented by the own staff.
Given the strong industry focus, many things were already comparatively easy in the introduction phase. For example, the purchase orders: today, they are exclusively handled in the ERP system, which supports the users with integrated contract and order quantity management.
This ensures that goods are ordered with the right quantity, and at the right time. Since all purchasing and sales items are managed in the program, and entry or exit posted in the correct inventories, the current stock on hand can be evaluated at any given time.
More complex – and therefore even more exciting – was the introduction of the ERP system in the production departments of the two sites. “Here, it took us some time to figure it out, but it was definitely worth the effort.” Nutritional value calculation and costing is now based on bills of materials – which may have as many as 13 levels, like in the range of Christmas products. The quantities are captured at special industrial PCs so always the latest data is supplied.
Soon, the production times will be captured to allow production planning on a line and employee basis – the next step towards the smart factory.
Linauer launches its web store for customers
Interaction with the customers has become a great deal smarter. Since the beginning of 2020, the company has used the CSB-Webshop, where restaurants as well as the own subsidiaries can place their orders online and time-independently. This again illustrates why the strategy of IT integration worked out well.
When the online shop was launched, essential item-specific master data such as nutritional values, item specifications, replacement items, and ingredients was in place so the integration of the web shop was possible with minimal effort.
The classic sales channels are still in use, for example in Linauer's own distribution company, Backprofi Vertriebs GmbH, with more than 50,000 customers. The employees accept the customer orders coming in by phone, the CSB-System determines the correct prices, and delivery notes and invoices are printed automatically – among others via the automatic e-mail dispatch. Many orders are imported into the system via EDI. The process is concluded with route planning.
As a result, Linauer has achieved a high level of digitisation in the information flow from purchasing, dough preparation, and inventory management to order picking and to the customer. New projects have already been scheduled. The company aims to perform maintenance with mobile devices, and it is planning to upgrade to the new Version 6.2.