Better Production Planning at Scandinavian Food Leader

There is an art to producing food in the right range and amount, according to customer needs. It is very difficult to simulate what happens when volumes go up and down and how this affects staffing. The business system solution lacked a number of components in planning, among other things, which led to the company looking at how best to resolve this.

“The collaboration with Optimity has gone well – we have great confidence in the team from Optimity
Jeff Johansson, Supply Chain Manager, Procordia(Orkla)

About Orkla

On January 1, 2014, Orkla Foods Sweden was born, after a successful integration of the three food companies Abba Seafood, Procordia Food and Frödinge the year before.

Note – This story is about work done for Procordia prior to this integration

Orkla prepares food and drink with care for people, land and sea and offer many of Sweden’s iconic food brands. The company has over 1500 employees and a turnover of about 4.8 billion kroner.Production takes place at plants in eight locations in Sweden. A total of some 216,000 tons is produced annually, comprising 1,000 items for the consumer market and the catering/institutional market. The main task is to provide consumers with the best solutions to meet their needs for tasty, convenient and safe food at the right price.

Project Supply Chain

As its ERP, the business runs Infor M3 (previously Lawson’s Movex) which had delivered good functionality – however during a comprehensive Supply Chain improvement project “Project Supply Chain”, a number of potential improvements in production planning were identified to extend the existing functionality.

IMPROVED BATCH HANDLING

Procordia wanted better planning support for its production planning. It had previously been using Lawson M3 and Lawson Multi Site Planner (MSP). MSP helped the organisation with sequence planning at a very detailed level, however it didn’t offer enough detailed planning of coverage and so made it difficult to plan the staffing  the factories in the longer term. A further problem was that MSP and Movex did not handle batches that pass their best before date, which means that the batches suddenly just “disappear” from stock. This sometimes resulted in panic production, which in turn led to the risk of surplus notices and items being scrapped the same week. While this is not an unusual occurance in the food industry – its far from ideal.

Procordia-quote-300x230The business was seeking to solve another ongoing issue: The function for not producing more than the maximum storage volume means that the lowest production order quantity cannot exceed what can be sold before the batch becomes too old and must be scrapped. Procordia wanted to have a warning when planning so that they weren’t in the situation of planning for food that would be scrapped.

Previously they had solved this with other tools like Excel and Cognos, but they were not entirely happy with the limitations of those tools – they wanted a tool that would optimise production proposals for each week, so that MSP got better input and better conditions for doing a better job.

Procordia asked Optimity to carry out  a feasibility study based on one of their factories at Kumla, produces drinks, cold ready meals and creams. The objective of the feasibility study was to find out whether Optimity really could meet the needs and could be used by Procordia in the other factories in future. The study showed that Optimity could deliver most of the points identified in the needs study. The remaining points could be solved by Optimity during the course of the project.

FINDING PROBLEMS QUICKLY

The solution means visualising planning, which makes it possible to quickly find problems so that action can also be taken quickly. This gave Procordia a common plan that can be shared by the whole organisation, with different views for different roles.

SMART ALGORITHMS TO OPTIMISE

The key is to simplify the planning process. This is done by making it easy to look at plans and to analyse and change them. Optimity utilises smart algorithms to optimise, illuminate and take many aspects into consideration at the same time, such as shelf life and contribution margin. Other aspects might be the right balance between stocks and utilisation of resources so as to decide the right batch size. This provides a synchronised plan, which holds together all the way from purchasing to delivery. Precisely what Procordia was looking for. Jeff Johansson, Supply Chain manager at Procordia ”The collaboration with Optimity has gone well. We  have great confidence in the consultants from Optimity. We can feel that they have the expertise we need, an expertise we certainly want to make use of at Procordia,” says Jeff Johansson, Supply Chain Manager at Procordia.

The plan included rolling out Optimity across all factories, to reduce set up times and lower production costs, while also improving delivery regularity without increasing stocks.As Jeff Johansson concludes “We reckon to have considerable savings and efficiency savings”.