Alpenhain Improves Planning and Simulation Processes
Faster, more flexible, cheaper: The requirements in the food industry are constantly increasing. Against this background, the cheese manufacturer Alpenhain has completely restructured its planning and calculation processes and maps them fully integrated via its ERP system.
When one of the big food retailers proclaims the “blue and white week,” everything has to happen very quickly at Alpenhain in the Upper Bavarian Lehen. To ensure that the food retailer in question does not run out of food during the ongoing Obazda campaign, not only machine capacity and personnel must be available, but also raw and finishing materials as well as packaging material in sufficient quantities. “Thanks to our IT-supported integrated business planning, such processes now run smoothly at Alpenhain,” says Johannes Urban, Head of IT and Organization at Alpenhain, happily. “Even if the customer orders additional goods at short notice.” But this has not always been the case. “Just a few years ago, we often broke out in a sweat during such actions,” recalls Urban.
No Integrated System
The traditional company has been producing various types of soft and baking cheese for more than 100 years, and supplies food retailers, bulk consumers and the catering trade. Although Alpenhain has been working with the GUS-OS Suite, an ERP system of the GUS Group, since 2006, it has only used some of the functions hitherto. For example, sales and action planning had not yet been mapped using the standard software. Instead, the employees entered the corresponding information in Excel tables and only later transferred the data to the production planning and control (PPC) in the ERP system. Integrated and cross-process planning was thus only possible to a limited extent. “It was not uncommon that we had to change our production at very short notice,” says Urban. The consequences: high set-up costs for the machines, an unbalanced stock situation and sometimes poor purchasing conditions.
High Administrative Effort
Another shortcoming was the separate controlling system that was not integrated into the ERP application. “Until recently, we still had over 50 interfaces between the external controlling system and our ERP application,” explains Urban. “In order to be able to operate this application, we had to keep essential company data redundant.” In addition to these technical challenges, which resulted in a high administrative effort, the decentralized structure also hampered the company’s entire controlling and financial planning activities. Due to the offline costing, correct data was usually not available, and the costing and profitability analysis was correspondingly inaccurate.
More Than Just IT
Against this background, Alpenhain decided to also use the GUS-OS Suite for sales planning as well as for controlling and financial planning. For this purpose, Alpenhain, together with the consultants of the GUS Group, first put its entire internal supply chain and all calculation and budgeting processes to the test. After a comprehensive analysis of the essential processes and tools, the project team started with a series of workshops. There, it first defined concrete goals and success indicators before tackling the major sub-projects Forecast, Procurement and Production Planning as well as Costing and Integrated Financial Planning.
“In principle, the whole project was a classic change management project in which we completely changed parts of our planning and calculation,” explains Anton Hollerieth, Head of Finance and Controlling at Alpenhain. “Initially, a lot of conceptual work was necessary. The extensive specialist and industry expertise of the GUS consultants was very helpful.” Markus Gehrmann, Head of Corporate Consulting at the GUS Group, adds: “We closely monitor current trends and future challenges in the fast-moving consumer goods industry and develop appropriate business solutions. In addition, our customers benefit from the fact that many of our consultants were previously active in the consumer goods industry themselves and therefore also provide advice on the business management concept and organizational implementation of the solutions.”
Intelligent Control Enables Reduction of Working Capital
The work has paid off: Instead of using several decentralized systems, Alpenhain now works company-wide with an integrated planning and control system based on a uniform database. In order to reflect this in organizational terms, an organizational unit was set up at the cheese manufacturer for handling the internal supply chain. Instead of using Excel lists, Alpenhain now relies on continuous (rolling) sales planning in the ERP system, which covers both medium-term and short-term sales expectations, including promotional quantities. Sales planning is directly linked to production and procurement planning, both in organizational and IT terms.
“By intelligently managing our internal processes, we have been able to further improve our ability to deliver and at the same time reduce our inventories and thus our working capital,” summarizes Hollerieth. “In addition, the improved sales planning now provides us with a sound basis for our production and procurement planning. As a result, productivity and material yield have noticeably increased, while material costs and set-up expenses have fallen.”
Proactive Revenue Management
Thanks to the integrated interaction of the individual ERP modules, Alpenhain can now also simulate the effects of price fluctuations in raw or finishing materials, calculate them continuously, and thus take appropriate measures in good time. By means of a continuous post-calculation of production orders, the cheese manufacturer can also permanently monitor the development of further essential parameters for the quotation and standard costing, thus creating the basis for proactive revenue management.
“A Small Revolution” Now Alpenhain has a company-wide, integrated system that covers the areas of sales planning and procurement planning, merchandise management, production planning and production as well as controlling and financial accounting. “The project was worthwhile in any case,” sums up Urban. “We can now deal much better with promotions or price fluctuations of raw materials.” However, he points out: “Such a change management project is a small internal revolution, which in our experience can only be realized with the full support of the management.”