Irwin's, the Northern Irish bakery, which supplies supermarkets
including Tesco and Waitrose, is turning to
enterprise resource planning (ERP) as it attempts to beat the
economic downturn. Information collected by its ERP system will
help the bakery manage its costs in the face of the rising price of
flour, oil and other raw materials, and consumer's tightening purse
strings.
Irwin's, based in Portadown, produces 1.2 million loaves of
bread each week, across 250 product lines. The company had no
visibility in its production process to allow managers to predict
future demand until it completed the implementation of the ERP
system from
Lawson software in June.
The bakery spent nine months with Lawson, training staff and
showing people how the software would be applied in the production
process before it went live. Brian Irwin, executive chairman of
Irwin's, says, "We have engaged people across the business, people
who would not normally be involved in IT projects, to think about
the benefits of a new IT system.
"We talked to our staff from a business point of view about
problems they faced at work and made sure the software could
overcome these issues" says, chief executive Bill Brown.
For instance, the company asked staff about how much time staff
could be saved if they could see in advance that stock was in the
right place at the right time.
Irwin installed
Lawson Software's Quickstep Food and Beverage ERP system. It
decided to change its own business processes rather than adapt the
software to how the company worked, implementing Lawson's software
"out of the box", with little modification.
Irwin used the Lawson Opportunity Analyzer performance
management tool to help it identify seven key areas where the
Lawson ERP could benefit the business, including supply planning,
execution, sales returns, cost reduction and procurement.
The company took a big bang approach to the project. Once the
software had been designed and configured, it ran two pilots before
going live.
Irving's had to integrate data from the shop floor, generated by
production equipment and staff who track bread made through the
production process, the day the software went live. This has not
gone as well as the company would have liked. The Lawson software
has not yet delivered all the business benefits identified by the
Opportunity Analyzer tool, says Brown. However, he adds, "We
now have the tools to measure business improvements."
Bread making is a speciality business the end product has a
short shelf-life. Forecasting provided by the Lawson software is
essential to reducing waste and managing costs. "It is a
demand-driven system," says Irwin, "which means that products will
be made and delivered more efficiently, so we can reduce stock
levels and ensure our customers receive the freshest products
possible."
Irwin's bought the software before the UK economic downturn. But
it believes Lawson will come into its own as trading conditions get
tougher. The price of flour doubled and fuel prices have escalated,
but Irwin's has not been able to pass on the cost increases to the
supermarkets.
Irwin's says
the £800,000 ERP system
will allow it to forecast its raw materials requirements more
accurately and reduce the amount of stock it has to hold. This will
make the supply chain more efficient and lower its stock
levels.
"Lawson is a platform for integrating processes across our
departments, enabling us to reduce waste and tighten our supply
chain," says Irwin.
The investment in Lawson software will also help the bakery
improve customer service, by keeping track of orders to the leading
supermarkets. Irwin says, "We intend to improve the profitability
of the company by using the ERP software. This will be essential
for future capital investment."
It is early days for the implementation, but Irwin's has managed
to train shop floor staff to use Lawson within the baking
processing. Staff scan bar codes to track orders through the
production process. Batches are weighed delivery lorries loaded.
The management team can use the IT system to plan and forecast.
As the recession hits UK
businesses, tighter and more accurate planning and forecasting will
be essential for survival and may help businesses return to
profitability quicker.