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The confectionery market is very changeable, with major variations in demand and increasing pressure from partners and competitors. To meet these challenges, the company required IT support that streamlined processes and facilitated future planning. With IFS Applications, Cloetta Fazer Sverige AB has a more complete logistics solution that improves planning and forecasting, and ensures more accurate production and delivery. Required Better Supply Chain Capabilities
A number of factors initiated change at Cloetta Fazer. The increasingly high demands placed on suppliers by wholesalers meant that supply chain capabilities had to be extended and enhanced.
“We had to ensure that we could fulfill customer requirements to avoid being left behind,” recalls Bengt Sjöberg, IT director at Cloetta Fazer.
“Traditionally, our line of business is not at the leading edge of technological development, but we had to take the lead. We realized we had to further develop our systems and add EDI and Web interfaces.” The confectionary industry is also characterized by seasonal variations, with peaks during the Christmas and Easter periods. To operate efficiently, reliable planning software is critical. It should enable information to be shared with suppliers, for example, so that this information can be passed as far back along the supply chain as possible in order to prepare those involved for the changes that occur.
The aim is to keep inventory levels as low as possible to minimize the amount of tied capital. With efficient planning tools, inventory can be reduced by an average of 5–10%. At the same time, sales must be guaranteed. In other words, it’s a question of balance.
Openness of IFS Applications Made Integration Easier
The decision to select IFS Applications was taken after the software was tested for openness and its capability to integrate with other systems. “Developing new functionality would have been too expensive and would also have taken too much time,” explains Bengt Sjöberg. “We already ran IFS and were very satisfied. Most of all, though, we felt that integration with external and internal systems would be easier with IFS.”
Gradual Implementation
Cloetta Produktion AB had previously used IFS Financials and IFS Manufacturing at its Swedish sites. During the late 1990s, the first versions of IFS Applications were implemented at Cloetta’s production facilities in Sweden and were subsequently upgraded as the need arose. The sales company implemented IFS software during the same period.
Improved Planning and Production Flows
After implementing IFS Applications, all production data are located in the same database, and the systems are integrated through the entire production flow. Enhanced control of flows from production to delivery ensures increased accuracy and strong support, which facilitates follow-up and planning. Manual work, such as duplicate entries, can be eliminated, saving money and reducing errors.
Previously, Cloetta Fazer ran a number of customized legacy systems. Forecasts were handled manually, and information was spread across several systems. The planning tools from IFS that are now used at Cloetta Fazer are extremely sensitive and react quickly to changes. Moreover, historical data and transactions from sales and production are located in the IFS software. Bengt Sjöberg continues,
“We now have a planning tool that is easier to use and that gives us a clear overview of our operations. Thanks to the openness of IFS Applications, it’s easier for us to access data from different sources—an absolute criterion for accurate forecasts.”
The changes are particularly noticeable at the central warehouse in Norrköping, Sweden, with 17,000 inventory spaces for products with a short processing time. Products from Cloetta’s own production unit as well as those from Fazer in Finland are received and subsequently shipped on to consumers worldwide. Approximately 65% of the total production volume comes from its two factories in Sweden, which also run IFS Applications.
During the first three months of 2001, more than 45,000 order rows were received from the sales company. Speed is essential in the warehouse; delivery notifications are received one day in advance, and orders received before 11 a.m. are to be delivered the same day. Currently, there is a radio network in the warehouse, and employees are equipped with wireless handheld terminals linked to IFS Applications. Barcodes are read, a signal is sent to the system, and the delivery is registered automatically. This means rapid and secure registration of deliveries.
About 90 employees are currently using the system on desktop PCs, and the IFS solution has also been integrated with the sales support system. Orders and forecasts are sent to sales representatives’ handheld computers in the stores and can then be checked against IFS Applications.
In 2004, Cloetta Fazer produced more than 63,000 tons of confectionery. The company’s investment in a new platform that enables it to meet the changing needs of the industry has laid the foundation for continued sales successes. It also enables Cloetta Fazer to expand the solution with functionality such as automatic inventory replenishment, an Internet interface and electronic invoices. Eventually, the company hopes to integrate its operations with customers and partners via portal solutions.
Benefits
- More accurate planning and forecasting capabilities
- Better overview of operations
- All production data in one database
- Systems integrated throughout the production flow
- Less manual input; fewer sources of error
- Remote access via handheld computers for better sales support
- Rapid, secure registration of deliveries
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