Case study - CSM

Headquartered in Amsterdam, Dutch company CSM is the world’s largest manufacturer of bakery products. From its UK headquarters on Merseyside, the business manages six factories, supplying well‑known major high‑street supermarket chains.

The sixth and most recently acquired factory came into the CSM fold in January 2012, when the business bought a baked goods manufacturer in Surrey out of administration.

“We bought the business on the Friday, and began running it the following Monday,” recalls John Main, Head of Planning and Logistics at CSM UK. “Our priorities: stabilise the operation, ‘rightsize’ staffing levels, restore its customers’ sense of trust in the business—and return it to profitability.”

Straightaway, it was clear that this plan presented some difficulties. Most obviously, the newly‑acquired business had levels of product traceability that fell far below CSM’s standards. Labour‑intensive spreadsheet‑based systems were rife, including a spreadsheet‑based system for calculating and recording product ‘best before’ dates. Hence customers had become wary of broken promises regarding corrective action.

The obvious solution presented difficulties as well. Standardised on Microsoft’s Dynamics NAV as an ERP system, CSM feared widespread degradation of response times, if it simply added the new factory’s transactions to the system.

“We knew that we needed Dynamics NAV on site for finance, purchasing, sales order processing and inventory management,” sums up Gareth Read, Business Process Manager at CSM UK. “What worried us was the productivity‑sapping effect of adding an enormous number of new factory‑floor transactions to the system—not just at the new plant, where we wanted to improve productivity, rather than worsen it, but elsewhere within CSM’s UK organisation, as well.”

The answer, oddly enough, became clear that very first Monday morning, when an employee demonstrated the MESTEC ‘Manufacturing Smart Box’ system that had been installed on the factory floor.

“Compared to performing transactions within Dynamics NAV, it seemed very simple and easy to use,” recalls Main. “What was surprising was that it wasn’t used more extensively. The answer seemed obvious: use the MESTEC system to capture transactions—including those that it wasn’t presently capturing—and then get the system to update Dynamics NAV, via an electronic interface.”

The only problem? When installed, the MESTEC Manufacturing Smart Box system could handle virtually all of the required functionality—but not the act of capturing the point of physical despatch to the customer, and the link to the assigned ‘serial shipping container code’ (SSCC), which would provide full traceability from despatch right back to raw material ingredients.

“We reached out to MESTEC and asked the question,” sums up Main. “Could the system be extended—and quickly?”  And the answer wasn’t long in coming back. “We’d actually been thinking of adding despatch‑specific functionality already,” says MESTEC’s Managing Director Jeremy Harford. “When CSM asked us for it, it gave the project the impetus to turn it into reality.”

Halfway through the twelve‑month turnaround plan that CSM had put in place, it was clear that developments were shaping up well, says Main. Productivity had risen sharply, the traceability objectives had been met, and customer confidence was returning. And progress has continued since, he enthuses.

“At the end of the line, a QC code and ‘best before’ date are allocated, there’s full traceability through the warehouse—and at the point of despatch, the MESTEC system creates an Advance Shipping Notice (ASN) to send to the customer, containing sku, description, quantity and SSCC,” he explains. “And at the beginning of the line, the system is capturing the original raw material receipt, ‘best before’ code, pallet code and quantity: it really is an end‑to‑end solution.”

What’s more, not only has the goal of avoiding degradation on the Microsoft Dynamics NAV system been fully met, but operatives have been freed from working with labour‑intensive and error‑prone manual systems.

“The MESTEC system has been designed from the ground up for factory‑floor data capture, with simple, clear, easy‑to‑use screens,” sums up Read.

“Changing an ERP system is costly and risky: using a system that is fit‑for‑purpose reduces both the cost and the risk—and compared to manual systems, greatly boosts productivity.”

Indeed, adds Main, present plans now call for MESTEC’s Manufacturing Smart Box to be rolled out at other CSM UK sites, commencing with a cake factory in 2013.

“Overall, we reckon that our investment in MESTEC has delivered a three‑month payback, as well as helping us to deliver a better customer experience,” he sums up. “We’ve got a better, lower‑cost and more productive business—and happier customers as well.”