With a sophisticated, multifunctional business management system to oversee its operations, Baldwin Richardson Foods appeared to have everything it needed to achieve world-class inventory control. Yet up until last year, the food manufacturer struggled mightily with inventory visibility issues. Though its system had the capacity to track the movement of raw materials and finished goods through the plant and DC and beyond, managers had learned not to put much store in the information it generated, which was often sadly out of date.
The problem lay not in the system itself—an enterprise resource planning (ERP) system that includes warehouse management capabilities among its many functions—but in the company's data entry process. Because the food producer's plant and DC lacked even the most basic automated data-collection technology, supervisors had to enter inventory data into the system manually. Although that worked well enough on good days, there were plenty of times—if someone was out sick, for instance—when the information wasn't updated immediately. As a result, the ERP system was often behind in its inventory records.
That might sound like a minor problem, but it was proving costly to the company, which makes ice cream as well as liquid food products like syrups, dessert toppings, dipping sauces, condiments, and specialty fillings for the baking industry. For one thing, the lack of up-to-date inventory information often resulted in unnecessary purchases of expensive ingredients like flavorings. Tracking flavorings has long been a sticky issue for Baldwin Richardson. Although flavorings come in 500-pound drums, only 10 pounds' worth of a given flavoring might be used in a particular batch of syrup or sauce. "When the flavoring was delivered to the plant, the entire drum was taken out of inventory," explains Craig Czajka, the company's IT manager, "and the system wouldn't show it as available until after the job closed out [which could be as many as six days later]. If it was needed for something else, we'd know we probably had it in stock, but we didn't really know or know how much."
The company was also paying a price in efficiency. In an effort to avoid running out of ingredients, which would lead to production stoppages, the food producer had begun taking full inventory counts every three to four months."We had to because we needed to verify what was happening on the floor,"says Czajka.With sales growing year over year, it was becoming clear that something had to change.
A piece of cake
Based in Frankfort, Ill., Baldwin Richardson was created when the Baldwin Ice Cream Co. purchased the Richardson Foods division of Quaker Oats in 1997. Although the company still makes ice cream (under the Baldwin brand), it now concentrates mainly on its liquid food product lines. Its customers include chain restaurants as well as some of the largest food manufacturers. One of its biggest clients is Kellogg Foods, for which Baldwin Richardson makes the fillings used in Nutri-Grain bars.
Though the actual food processing takes place at a factory in Macedon, N.Y., products are distributed from a DC in nearby Williamson, N.Y. The 100,000-square-foot Williamson facility holds most raw materials as well as finished products for outbound shipment to customers (the company is in the process of converting some of that space to manufacturing). A shuttle truck runs between the plant and distribution center, making a run almost every hour to deliver ingredients to the factory or finished products on pallets to the DC for storage and shipment. About 20 employees in three shifts work five days a week in the distribution center. On a light work day, Baldwin Richardson ships about 20 trucks' worth of product; on a heavy day, it ships out about 40.
Operations at the Williamson DC are overseen by the company's ERP system, which is the Ross Enterprise product suite from CDC Software. Along with managing warehouse and shipping activities, the ERP handles the company's financials as well as the supplier management, quality assurance, material requirements planning, and manufacturing functions. As Czajka puts it, "Our ERP system is everything to us—it runs the whole business."
Although Baldwin Richardson had looked into different bar-coding systems in the past, concerns about their compatibility with its ERP system had kept the company from moving ahead. But just over two years ago, Baldwin finally found a supplier that had the expertise it was looking for. In December 2005, it contracted with LXE Inc., a Norcross, Ga. based specialist in wireless systems, to devise a mobile computing solution.
After evaluating Baldwin Richardson's requirements, LXE came up with a design for a wireless network and mobile data collection system. For the data-collection units, LXE chose VX7 vehicle-mounted computers for forklifts and MX7 handheld computers for use by supervisors and others in the factory and warehouse. Both types of mobile computers are able to interact with the Ross ERP system, sending data back and forth on an 802.11 standard radio-frequency network.
As part of the installation, LXE conducted a site survey to determine the optimal locations for the wireless points in order to provide complete facility coverage. The mobile computers are always within a 40foot range of the antennas. LXE installed eight antennas in the plant—enough to cover the production floor and provide backup coverage in the event of a unit failure—and 12 in the distribution center. (When Baldwin Richardson recently converted some of the distribution space to manufacturing, it reduced the number of antennas to seven.) The wireless network began operating in June 2006 at both the factory and DC. "The wireless implementation was a piece of cake," says Czajka.
In conjunction with the wireless network installation, Baldwin Richardson bought a special bar-coding module for the ERP system. Reconfiguring the system to take advantage of the real-time data took almost a year to complete. Czajka notes that the software piece proved to be much more complicated than the wireless network installation.
Point and pick
In April 2007, the center began using the wireless data collection system to track finished goods in real time. One of the most visible results has been the elimination of the paper pick tickets used in the past. Today, the ERP system sends instructions to forklift truck drivers via their vehiclemounted computers. The list of items to be retrieved is displayed on the computer. To get started, the driver simply clicks on an item, and the computer tells him or her where the needed pallet is located.
The computer system now relies on the bar-coded data to track the status of inventory. When workers scan items as part of their putaway and picking routine, for example, the data are sent wirelessly to the computer, which allows the ERP system to update inventory and location. Workers also scan outgoing orders at the loading dock to make sure that orders are complete and accurate.
The bar-code scanning procedures also ensure that product codes and lot numbers are entered accurately into the computer system. The ERP system then uses this information to develop picking instructions in accordance with the company's first-in, first-out inventory management strategy.By issuing pick instructions based on expiration dates, the system helps minimize problems with out-of-date ingredients.
Wireless data collection has brought other benefits as well. "The system really reduces our paperwork," says Czajka. "Now everything is automatically time stamped and date stamped, with lot numbers and quantities recorded."
To help the workers adapt to the new approach, the company held special training sessions, often on Saturdays, that involved mock movements of product. The company trained some 60 people, including supervisors, in wireless data collection for both the warehouse and manufacturing operations. Czajka reports that training included instruction not just on how to use the system but also on how to fix mistakes.
Czajka says that the training was crucial to a successful implementation. "A lot of people had been here for 20 years and this was a culture change for them," he says. "If you didn't train them properly, we would have seen errors on the back side."
No more blind spots
How has the new wireless solution worked out? Baldwin Richardson Foods reports that the system has eliminated production blind spots, improved inventory control, and boosted productivity.
Take the order fulfillment process, for example. Today, warehouse workers work more efficiently than they did before the system was installed because they no longer have to fetch paper pick tickets every time they go to fill an order. In fact, the forklift drivers have picked up the task of printing out the shipping documents tendered to the truck driver—a task formerly handled by a warehouse documentation specialist.When the forklift driver goes to load a truck, he or she scans the pallet at the loading door, letting the computer system know that the product has been transferred. The driver then enters the shipment status into his or her computer and generates the documents. That frees up the shipping department workers who formerly checked loads and chased down paperwork to spend their time on other tasks.
Wireless data collection has also meant fewer shipping errors. Because the forklift driver checks the bar code on the pallets while loading the truck, the system can alert the operator if he or she is placing an incorrect item on the vehicle. "Because things are in real time, we can pick up on errors right away," says Czajka.
Up-to-the-minute status information on stock on hand in the DC has eliminated blind spots in inventory. Today, when a pallet with, say, 50 bags of salt is moved to the production area so that one of the bags can be used, it no longer drops out of sight in the inventory system. Even though the entire pallet has been taken out of inventory temporarily, managers can still check on its status."Because planning and purchasing can see that we have 49 bags left, we [know we] don't need to re-order," says Czajka.
In fact, now that it has a better handle on inventory, Baldwin Richardson Foods is considering the elimination of the annual two-day shutdowns to take physical inventory. "This might be our last year for doing physical inventories," says Czajka. "If the spot accounts meet the auditors' requirements, we will only do cycle counts."
Wireless data collection, moreover, has enabled the food producer to respond swiftly to potential problems."The wireless computers give us the ability to fix our problems faster," says Czajka. "Now we know within a few hours if something is wrong. Before, errors might not show up for days or even weeks after production, and by that time it's hard to track down what happened. Today our orders are more accurate, and our people are working more quickly."