Frucor Extracts Best Value in Strategic Partnership with SAP Expert UXC Oxygen, a CSC Company
Client:Frucor Beverages, LTD.
- Create new production line
- Redesign order fulfillment
- Streamline logistics for production, packing and shipment
- SAP Systems
- UXC Oxygen Implementation
- Unit labeling linking factory orders to finished goods
- Eight steps removed from "make to stock" process
- 2 week process is now down to a few hours
- Product is palletized directly in the container
MADE TO ORDER AND OUT THE DOOR
When Frucor’s direct containerization project went live in May 2014, it was the successful culmination of an IT project, physical site works and change management program. It turned the old manufacturing philosophy of “make to stock” on its head as Frucor endeavored to improve efficiency with a transformation to “make to order.” The project simplified the business-critical process of shipping products from New Zealand to Australia by eliminating container hand-stacking and repacking. It was a change that sounded simple but required major SAP system changes and a massive effort from teams in both countries. Adding to the risk, another major manufacturing change, Project Fusion, was due to go live at the same time.“It was very complex,” says Raj. “As well as creating the new production line, we had to continue with the ‘make to stock’ process for our New Zealand supply of beverages. We had to redesign the way we fulfilled the orders and ensure we had the logistics streamlined to enable us to produce, pack and ship the goods in containers, in one seamless operation.” Raj says that while the concept was well understood, the depth of complexity in the transformation was enormous. “It was a major shift in the way the factory worked, compounded by the inward goods and labeling changes that were occurring with Project Fusion. There was a high degree of interdependency between the two projects.” Direct containerization has removed eight steps from the old “make to stock” process, and the payback has been quick to materialize, says Raj. “What was a 2-week operation has come down to a few hours, and we can now get product to market a lot faster. Before, we had team members taking product fromwarehouses, then manually stacking it onto Australian pallets and into Australian containers. Now Australian product is palletized on the line and packed directly into containers.” Raj says a number of factory innovations introduced with direct containerization, including automated palletizing, have minimized health and safety risks and saved money thanks to a significant reduction in damaged goods. Frucor now has complete visibility over all export stock, and inventory accuracy is outstanding. At the Australian end, loading and unloading of stock has improved dramatically. “All they have to do is unload, scan and put away — there is no assembly needed.” For Raj, one of the most satisfying aspects of the direct containerization project has been the overwhelmingly positive response from the Frucor leadership team.
SUCCESS BREEDS SUCCESS
As Frucor’s business grows, Raj says it is important that the systems and processes are in place to ensure projects happen according to plan. “We can no longer simply will changes or projects into existence; we need the systems, management and external support in place to execute these types of projects.”Raj says demand from the business for IT transformation is growing. “We are expanding our IT service footprint across the entire business, and as a result we are getting better synergies between suppliers.” He says internal customers are much more informed about what they want from IT. “IT is expected to lead business change, and to achieve that, you need to have a partner with product and business domain expertise to ensure the technology investment pays off. UXC Oxygen has supplied us with that and is now a key part of supporting our core SAP environment.” In 2014, Frucor’s IT department tackled more projects than ever before — and completed them all on time and on budget. Says Raj: “We have doubled the number of projects we have undertaken over the last few years, and we are now receiving more funding because each of them has had a good business result.”
BETTER CONTROL OF INWARD GOODS
Project Fusion was born out of a desire for Frucor to have a better way of operating. The name reflected a fusion of SAP and factory automation, and the project involved the commissioning of new factory equipment as well as a system implementation. Phase 1 replaced old applications with SAP to provide accurate, near-real-time information on factory activity.A key component of Phase 1 was the introduction of raw materials handling to track the receipt and consumption of raw materials against factory orders. It included the introduction of the PIKI application. Raj says the PIKI device allows Frucor to record and monitor movements of inventory and other items as they happen, rather than later. “With PIKI, storemen use wireless touchscreen Windows 8 tablets mounted on forklifts to record where materials are allocated in the factory.” The system uses a graphical interface for SAP that was custom developed by UXC Oxygen and Frucor. The interface replaces SAP’s complex menus and screens. Before Project Fusion, Frucor had only two SAP stock locations — onsite and offsite. “People often had to manually check where stock was, and on a large site, that was very difficult and time consuming,” says Raj. They now use PIKI to move material in and out on SAP as they are actually moving it and to issue stock to factory work orders. “We now have all the goods recorded on the system and can track their whereabouts.” A key part of Project Fusion was the introduction by UXC Oxygen of handling unit labeling, which linked factory orders to finished goods at the time pallets are produced to streamline management of finished goods. “This improved the tracking and traceability of goods and ensured they had one identifier in SAP on both sides of the Tasman.” Another improvement was in the production control system (PCS), says Raj. Frucor replaced its paper-based PCS with a modern business intelligence system. The new PCS automatically gathers data from production as it happens, so production team leaders can track performance against targets. “Thanks to the new system, managers get up-to-the-minute feedback and insight into how downtime occurs,” Raj says.
Since its beginnings in the early 1960s, Frucor has evolved from a small New Zealand juice business to a leading Australasian beverage company, and the market leader in energy drinks in Australia and New Zealand. In recent years IT has become an increasingly important enabler for Frucor to grow its operations, streamline its processes and simplify its manufacturing and logistics — enabling it to get products out the factory door faster.UXC Oxygen, as a CSC company, continues to provide Frucor with on-the-ground support and strategic planning.