AT A GLANCE
- Food and beverage
- Improve inventory accuracy
- Improve production performance and visibility
- Accelerate factory floor automation and control
- Introduce best practice business processes
- Drive business efficiency
- SAP delivered by Oxygen
- Strategic partnership initiated
- Improved information access
- Inventory accuracy/optimisation
- Accelerated manufacturing
- Business process automation
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From beginnings in the early 1960s, Frucor has evolved from a small New Zealand juice business to a leading Australasian drinks company and a trans-Tasman leader in the energy drinks market. In recent years, technology has become an increasingly important enabler for Frucor to grow operations, streamline processes and, simplify manufacturing and logistics. What it also gained from the process is a long-term strategic technology partnership.
That’s because it looked to Oxygen for the delivery of two major SAP projects, with Frucor Group IT Solutions Manager Richard Raj explaining that the projects delivered value beyond the benefits of functionality and performance. “Oxygen has an in-depth knowledge of our business and the way we operate, which means I don’t have to second guess. It puts the best options on the table and I know it back us 100 percent.”
When Frucor’s Direct Containerisation project went live in May 2014, it was the successful culmination of an IT project, physical site works and change management programme. It turned the old manufacturing philosophy of ‘make to stock’ on its head as Frucor endeavoured to improve efficiencies with a transformation to ‘make to order’.
The project simplified the process of shipping product from New Zealand to Australia by eliminating container hand stacking and repacking. While that sounds simple, it required major SAP system changes and a massive team effort from both sides of the Tasman.
Adding to the risk, another major manufacturing change, Project Fusion, was due to ‘go live’ at the same time.
Project Fusion combines SAP and factory automation and involved the commissioning of new factory equipment as well as a system implementation which saw legacy applications replaced with SAP to provide accurate, near real-time information, automating raw materials consumption against factory orders.
The system uses a graphical interface to SAP which was custom developed by Oxygen and Frucor.
Before Fusion, Frucor had only two SAP stock locations — on-site and off-site. “People often had to manually check where stock was and on a large site that was very difficult and time-consuming,” says Raj.
A key part of Project Fusion was the introduction by Oxygen of handling unit labelling, which linked factory orders to finished goods at the time pallets are produced to streamline finished goods management. “This improved the tracking and traceability of goods and ensured they had one identifier in SAP on both sides of the Tasman,” Raj adds.
“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.”
It was a major shift in the way the factory worked, compounded by the inward goods and labelling changes that were occurring with Project Fusion. There was a high degree of interdependency between the two projects.
Direct Containerisation has removed eight steps from the old ‘make to stock’ process and the payback has been quick to materialise, says Raj. “What was a two-week operation has come down to a few hours and we can now get product to market a lot faster.”
The factory innovations introduced with Direct Containerisation, including automated palletising, have minimised 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.
Noting that no large, complex projects are ever trouble-free, Raj says the manner in which problems are dealt with is telling, with everything out in the open and all options discussed. “I can pick up the phone and talk frankly with the team to quickly find the most effective solution,” he says – and that extends to recommendations outside of the SAP environment, too.
“I value Oxygen as a sounding board. I rely on it for the SAP perspective on any issues and it keeps me informed about what’s coming down the track in terms of new SAP functionality. Armed with this I can then make sensible decisions about the best business applications for Frucor and the future-proofing of our operations,” he explains.
Oxygen continues to provide on the ground support and strategic planning; through 2015, the beverage manufacturer has forged on with additional strategic projects on which Oxygen has provided its SAP implementation expertise. “We need the systems, management and external support in place to execute these types of projects,” he adds.
IT is expected to lead business change, adds Raj. “To achieve that, you need a partner with product and business domain expertise to ensure technology investments pay off. Oxygen has supplied us with that and is now a key part of supporting our core SAP environment.”