Dairy Goat Co-operative safeguards precious kids with DXC Eclipse

Dairy Goat Co-operative Ltd (DGC), the world’s leading manufacturer of goat milk nutritional powder products, developed the first-ever infant formula based on goat milk in the late 1980s and built the world’s first factory designed specifically to manufacture goat milk nutritional products.

DGC supports its leadership position through ceaseless attention to quality control. From on-farm practices through to product manufacture and packaging, all processes are subject to risk management programs audited by the New Zealand Food Safety Authority.

Until recently, DGC ran its company with a selection of disparate legacy systems, the most crucial being FileMaker Pro, which handled product grading, among other functions.

A local developer customised FileMaker Pro to match DGC’s requirements, with no supporting documentation or knowledge transfer. Although the system was relatively stable, the substantial risk to the company arising from being totally reliant on a single person became even more apparent when the developer was away attending an overseas conference.

Keith Arnold, IT manager for DGC, explained: “About three years ago, when we were turning over $50 million and teetering on the edge, thinking what if something did happen to him, we actually did have a problem. One of our new staff deleted the whole database. The developer was in Houston, and we had no local support. Luckily we got him on the phone, and he was able to log in and restore a backup for us. We were definitely vulnerable though, and this really highlighted just how much so.”

As well as FileMaker Pro, the company utilised Exonet for its financials and IMS (a proprietary ingredients management system) to control the precision addition of micro-ingredients to the products. There was also a considerable reliance on some extremely lengthy and complex spreadsheets for reporting and planning.

Renzo Vettori, general manager of corporate, explained: “I think the big problem for DGC was that it wasn’t integrated, and we were reliant on too many spreadsheet functions for our planning requirements.

“The original system did what we needed for the structure of the company when we had half a dozen people here and a lot of the work was being done offsite, but once we became a single site with the manufacturing unit and processing plant, it became harder to rely on spreadsheets. We needed a system we could rely on, not just one person.”

The move forward

The lack of integration between the systems presented DGC with a range of issues. With low stock-level and costing accuracy, as well as difficulty in producing management reports, the ongoing growth of the company demanded the move to a single stable and highly functional solution. As well as replacing Exonet and FileMaker Pro, a new solution was required to integrate with and control IMS.

“Our situation was that our sales were being managed in one of the databases and then the financial reporting was being done in the Exonet database, and then the planning for those was done in a spreadsheet,” said Arnold. “There was no direct linkage for what theoretically is the same transaction, and we were effectively double-keying things a lot of the time, too.

“We could see with the growth in the company that was due to come that the planning and procurement side was going to stretch our spreadsheet-based systems, so the time had definitely come to move to a totally integrated solution.”

Solution

DGC proactively evaluated several enterprise resource planning/manufacturing resource planning (ERP/MRP) options, including one it was already very familiar with and had originally believed would be an ideal solution. However, the final decision came down to the solution’s longevity, stability and flexibility to adapt to this business, along with strong local support. Microsoft Dynamics AX — along with Microsoft New Zealand’s leading Dynamics AX implementation partner, DXC Eclipse — was selected.

Vettori commented on the selection, “I think Microsoft has strong reporting functions, especially on the financial side of things, it has a long-term roadmap, and Dynamics AX certainly won hands down for user friendliness.”

DXC Eclipse, a practice within DXC Technology, was a natural choice for DGC as its partner, in view of DXC Eclipse’s number of local implementations and an understanding of the dairy industry. “We chose DXC Eclipse from a selection of Dynamics AX partners available in New Zealand, as we felt that its range of experience was probably wider,” said Arnold. “We saw DXC Eclipse had a good fit and ongoing support as well, and felt if it were doing more installations than anyone else, it would have more support.”

The requirement for product grading as part of the new integrated system (previously handled by FileMaster Pro) was a crucial one, and DXC Eclipse developed this as a specific module within Dynamics AX.

Outcome and benefits

The existing product grading function was used as a model for the new Dynamics AX module. Arnold was pleased with the results: “With the new module that DXC Eclipse built within Dynamics AX, we’ve addressed that stability issue, and I feel more confident with our grading system being handled in the same database. So, long term, I believe that Dynamics AX is actually going to protect us more.”

The Dynamics AX grading solution that DXC Eclipse developed offers enhanced performance, primarily due to its integration to Dynamics AX inventory and quarantine management systems. Products are quarantined directly off the production line until grading is completed. It facilitates “hot shipping,” where product can be released early, prior to a final grade being issued, so the supply chain demands can be fulfilled.

Once final quality results are received, the early-released product is graded and can be traced through Dynamics AX inventory and production processes. The new grading system was redesigned to meet the requirements of different operations, such as the canning process, where quality samples are based on time rather than lot samples.

The development of functionality to generate export documentation within Dynamics AX was also well received. The documentation is clean, clear and consistent, providing both quality information and a professional image. “Now we’ve got this documentation package that DXC Eclipse developed, which is just brilliant,” commented Arnold.

Microsoft’s underlying Dynamics AX best business practice was easily aligned with DGC’s own processes. With only minor changes in the way things were done, the implementation was a relatively fast and easy process , and user uptake and acceptance have been rapid, according to Arnold.

Planning to succeed

Planning has always been a difficult issue for DGC, as the company deals with a fresh milk product in its raw state, with a seasonal peak. The peak has to be leveled to cover 12 months’ supply, so good forecasting is critical, especially realising that DGC’s own customers don’t always forecast well themselves. Dynamics AX provides the company with better tools to effectively manage forecasting and even out the peaks.

For Arnold, the planning coming in to the inventory system is a highlight of the Dynamics AX solution. “Previously there was all this double keying, backwards and forwards, between taking database information and putting it into the spreadsheet to be able to do planning. There would always be questions as to whether the inventory was right. With Dynamics AX, we don’t have those concerns.”

Aiming for quality

Other quality-oriented projects in progress are the provision of both a radio frequency (RF) warehousing solution and a supplier payments system.

While the RF solution provides the obvious benefit of accuracy in inventory management, a driving factor for the solution is about quality management. It will ensure that products being issued to the production line are both the correct product and the correct grade. The automation system scans products at the exact time they’re issued to the line and interfaces this information back to Dynamics AX. If a potential issue is identified, DGC is able to isolate the products affected for further quality testing.

The supplier payments system is being developed to meet specific and unique payment models that support the farmer shareholder cooperative structure as standard dairy industry business practice. In addition to being a solution for paying the farmers for supplying their milk, it is also a quality system. It informs the farmers of issues in the quality of milk supplied in the most efficient manner, so corrective actions can be taken immediately on farms. This will be achieved through the enterprise portal, email, fax and even SMS messages to the farmers. This is a significant benefit for the farmers and the dairy company, and is all about quality, with higher quality reflecting better returns.

A very certain future

For Vettori, Dynamics AX is part of DGC’s future: “We had looked ahead at our new canning plant and our part ownership of Dairy Blenders, and what we had simply wasn’t sophisticated enough to take us forward. Our plan is to incorporate them onto the Dynamics AX system down the track and get full transparency across the whole business. Dynamics AX can, and will, help us achieve this.”

Arnold is also more than comfortable with the partnering of DGC and Dynamics AX, happily concluding: “I think the capabilities of the system will see us right for a very long time.”