Operations and Business Resource Management Modelling
Michael Hampson, Bega Cheese
How Did Bega Cheese Get Started with SPF
- Evaluated SPF and purchased to report general ledger actuals
and customer/item sales; - Initially identified that SPF could be useful for ABC costing
- Approached Excelerated Consulting for assistance with the ABC
project - More applications for SPF identified - Changed focus from ABC
to developing an integrated business intelligence solution - Close partnership formed with Excelerated Consulting to assist bring
desire to reality
Things you may not know about Bega Cheese
- Established in 1899 as a Co-operative
- Owned by 110 farmers within the Bega Valley region of NSW
- Employees c. 500 people, all based in Bega NSW
- Operates two separate manufacturing operations – Bulk Cheese
manufacture and Retail Consumer products - Retail Plant commissioned in 1998
- High growth from 1998-99 from 4,965 tonnes of Retail Consumer
products to 43,000 tonnes in 2003-04 - Exports to over 35 countries across the globe
- Commenced with GL cubes in SPF late December 2003
Information Reporting Before SPF
Prior Information Architecture
- Inbuilt ERP reporting functions not meeting decision support
information requirements - Many linked spreadsheets being used for ad hoc and regular reporting
- Information holders linked to those understanding query and SQL
languages - Different versions of information kept in filed spreadsheets
- Monthly reporting resource occupation high, as all information was
keyed manually into spreadsheets - No central information network, other than the ERP
What did the Business Require
Business Performance Management Requirements
- Rapid and dynamic operational reporting – target 3 days bottom up
forecast process completion period - Integrated devolved budgeting– link all inputs into the one source to
robustly calculated labour and cost of goods sold - Dynamic sales reporting and forecasting - zero time report generation
- Cost allocation – understand the cost drivers and apply ABC
principals across the FMCG business unit - What-if analysis – understand changes in volume, within a robust
template - Easy to use – must facilitate information share across broad base
- Web interface, supporting information dissemination across all areas
of the business – not just SQL guru’s
Overall Solution Architecture
Project Timeline
- Project commenced with Excelerated Consulting in
December 2003 - General ledger reporting was implemented before Christmas 2003
- EIS reports were developed in early 2004
- Budgeting module was available for completion of the 2004/05 budget.
Functionality from this module has also enabled :
– modelling of human resource pay conditions and classification, through
top down revisions
– forecasting and what-if analysis, across volume, sales, headcount, etc - Web based budgeting and reporting rolled out across the business in
July 2004
Architecture for Resource Planning
Impact of dynamic link between Production Planning and Resource Planning
- Ability to instantly view the budgeted resource cost of a production
plan including overtime - Understand periods of supply chain stress
- Results in rescheduling production and factory down-time
- Model impact of change in employee pay conditions
- Let’s have a look
Solution Rollout
- Using SPF Plus Internet Services across the intranet
- Required minimal training – 35 new users trained in a day
- Let’s have a look
What are we doing next
- Benchmarking – other Dairy/FMCG businesses
- Purchase Price Variance (PPV) reporting and forecasting
- Integrated Finished Goods Inventory Forecasting through Sales
Forecast and Production Plan (Input Inventory forecast through MRP
and Planned Purchases) - Process Logic Chip (PLC) integration
- Freight channel optimisation
- Activity Based Costing (ABC)
- and the list goes on…