Egg supplier streamlines supply chain
19/07/2012 - Egg supplier Sunny Queen had inventory control problems as it sought to push its produce faster through the supply chain that ends on the supermarket shelf. Jennifer Foreshew
The Queensland-based private company began a review of its information technology two years ago and discovered its legacy system would not handle future requirements.
"It showed what we actually knew that we had a bit of disparity there and we had multiple versions of the truth," Bob Yarnold, Sunny Queen, national technology and communications manager, said.
"It was difficult to get good visibility of what our inventory was and it was difficult to get a good view of what our margins were doing."
Sunny Queen sold its first dozen eggs in 1930 and is one of Australia's top egg suppliers and the No 1 egg brand in supermarkets. It sells millions of dozens of eggs each year, along with other egg products, to consumers and businesses.
It has sales and distribution offices in Queensland, NSW, Victoria, South Australia and Western Australia.
Yarnold said visibility of the company's profitability was also a problem.
"We had to wait for a month, for example, to get a good view of what was going on," he said.
"We didn't have a real good handle on our inventory status — it was there, but it was an effort to put it all together and it was sometimes out of sync as well."
Sunny Queen wanted to eliminate manual processes and streamline efficiencies to enable the company to process customer orders faster by electronically sending, receiving and acknowledging customer orders and supplier purchase orders.
The company looked at several options, including Oracle and SAP systems, and decided Microsoft Dynamics AX was the best fit based on a checklist of more than 100 pages.
Sunny Queen also decided to standardise on the Microsoft platform by virtualising its systems with Microsoft Hyper-V and installing Microsoft Terminal and Remote Desktop Services to enable remote access to Microsoft Dynamics AX.
The company took a two-phase approach, with a six-month installation in finance, sales and logistics going live in July 2010.
Phase two was production, warehousing and other minor pieces, which went live in the middle of last year.
Its installation partner was Scalable Data Systems.
"We put in an IBM Blade system running Windows Server 2008 R2," Yarnold said.
"We have six physical servers in the Blade array and about double that in virtual servers. We are running all of that on Microsoft Hyper-V."
Sunny Queen no longer waits a month to know whether it is profitable on certain products. It has real-time visibility of its margins and profitability and inventory.
"It is one version of the truth now," Yarnold said. "It is all coming out of the one system."
"We have got fail-safe all the way through, too" because it was a round-the-clock operation. With millions of dozens of eggs, multiple brands and more than 200 active stockkeeping units, inventory management is central to Sunny Queen's success.
"We have got a fully integrated supply chain model now, and we have our supplier credit and customer rebate management all included."
All data is consolidated in the general ledger, enhancing inventory visibility — ranging from stock received from farms to stock on hand and stock in transit.
"We have also gained efficiencies in our fully integrated food chain," Yarnold said.
"We now have electronic data interchange so we can process customer orders faster, because they are electronically done."
Sunny Queen has easier supply credit with customers, rebate management and greater business agility. Better visibility of customers' historical purchase behaviour has enhanced demand planning.
"We have drilldown capabilities on all the information, we can review our performance in greater granularity."
Sunny Queen, which invested almost $2 million in hardware and software for the project, is now installing Microsoft Dynamics Customer Relationship Management software and setting up Telstra-based internet protocol telephony.
"Within about six months, I believe we will have that integrated to our CRM system."
Sunny Queen is also integrating a business intelligence reporting system, which will provide real-time data based on Microsoft Dynamics CRM and AX.
*Jennifer Foreshew is a journalist from The Australian
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