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Cloetta Fazer Sverige AB is the sales and distribution division of Cloetta Fazer, the leading manufacturer of confectionery in the Nordic region. The market is very changeable, with major variations in demand and increasing pressure from partners and competitors. To meet these challenges, the company requires IT support that streamlines processes and facilitates future planning. Cloetta Fazer Sverige AB has now completed the first stage
of its move toward implementing a more complete logistics solution, going live with IFS Applications at the beginning of 2002. At the same time, two of the company’s production units upgraded to IFS Applications 2001. The challenge
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 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 so as 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.
The solution
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.”
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.
Benefits
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 its 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 2001, Cloetta Fazer
enjoyed its best year ever, producing more than 70,000 tons of
confectionary. 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.
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“We now have a planning tool that is easier to use and that gives us a clear overview of our operations.”
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