4-page Case Study - Posted 9/1/2006

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Lantmannen Unibake

Food Manufacturer Achieves Significant Income Growth and Streamlines Processes

Bakery manufacturer Lantmännen Unibake Poland, part of Svenska Lantmännen Group, planned a rapid expansion of its market with new production lines to meet domestic and international demand. The company wanted a business management system that could handle a fast growing workload cost-effectively, help in maintaining the strictest food quality standards, streamline business processes, and provide management with accurate, up-to-date information in a familiar environment. For this, it chose Microsoft® Dynamics™ AX. Lantmännen Unibake Poland has benefited from improved production flexibility, more rigorous quality systems, reduced product returns, and a better motivated and more efficient workforce. Order management has also been improved and overall revenue has grown by 43 per cent since Microsoft Dynamics AX was introduced.

Situation

Expanding a small business into a much larger one can present challenges for employees. They often have to grapple with an increasing volume of orders, product lines, and customers—as well as much greater complexity in business procedures. The qualities that make a small company a success—speed of response, quality, and flexibility—can all be threatened in the transition to becoming a larger company.

We also wanted the system to provide our business users with the information they needed, in an intuitive, easy-to-use environment. That’s what Microsoft Dynamics AX has given us. Tomasz Gesiarz, Director of Finance and IT, Lantmännen Unibake Poland

In 2002, Lantmännen Unibake Poland decided to expand its plant at Nieporet near Warsaw by building new production lines, storerooms, freezing plants, and offices. It also decided to expand into new markets.

Lantmännen Unibake Poland realised that it needed to implement a modern business management system that could automate and streamline processes across its production, finance, supply chain, and human resources areas. It also needed a system that could deliver comprehensive, accurate, and timely information to business managers. The company reviewed a wide range of business management solutions before deciding on Microsoft® Dynamics™ AX.

Tomasz Gesiarz, Director of Finance and IT, Lantmännen Unibake Poland, says: “We wanted a system that could handle a fast-growing workload cost-effectively, and streamline the increasing complexity in our business processes as we expand and diversify into new market segments. We also needed a system that could provide our management team with accurate, up-to-date information in an environment that they are already comfortable in. That is why we chose Microsoft Dynamics AX.”

Microsoft partner IT PiAST, a specialist in business management implementations, was chosen to carry out the installation and customisation.

Solution

A key requirement that Lantmännen Unibake Poland had for its new system was that it should deliver high functionality while keeping things simple for end users and technical employees.

Gesiarz says: “We had some demanding requirements: extensive integration with production processes and with industrial automation devices; an automated warehouse that would eliminate waste and increase customer product shelf life, and an electronic data interchange (EDI) system that not only automated order and invoice management, but also integrated fully into our planning and production systems. At the same time, we didn't want a giant leap in systems complexity, or an unfamiliar environment to have

Microsoft Dynamics AX has really simplified the process of turning an order around. The whole system is far more flexible. Tomasz Gesiarz, Director of Finance and IT, Lantmännen Unibake Poland

To date, the solution has covered five main areas:

• Full integration of production, logistics, and supply chain into one streamlined process.
• Finance management, fully integrated into the production management system.
• Automated warehouse management.
• EDI—fully integrated with both management and production processes.
• Human resources.

IT PiAST carried out extensive integration as part of its implementation. In the production area, industrial automation devices have been extensively integrated into the Microsoft Dynamics AX system. In the warehouse, a Wi-Fi network connects the warehouse module to wireless terminals placed on forklifts. Recipe, quality, and traceability components have been implemented within the production area that has improved productivity and operating flexibility, and cut waste.

In addition, IT PiAST implemented a number of complementary components that allow integration with mobile devices such as the Microsoft Windows Mobile®-based Pocket PC and wireless terminals, as well as interfaces to embedded devices such as programmable logic controllers (PLCs) and other industrial systems. These solutions, despite being technically sophisticated, provide user-friendly interfaces tailored individually to the user's workplace.

Benefits

Microsoft Dynamics AX has streamlined and simplified business processes throughout the company—from order management and human resources to production, warehousing, and customer delivery. Lantmännen Unibake Poland has benefited from increased productivity, reduced waste, and improved quality.

Greater Manufacturing Agility

IT PiAST has implemented close integration with production embedded systems: recipe, mixing, weighing, and other devices are fully integrated into Microsoft Dynamics AX to provide an advanced production steering solution. Every stage in the production process is automatically registered and controlled in Microsoft Dynamics AX.

Integration of module and wireless devices offers easy and rapid input of data straight into Microsoft Dynamics AX from anywhere within the plant. The input from integrated supervisory control and data acquisition (SCADA) system ensures the production lines are monitored, and contributes to flexible management of the manufacturing mechanisms. Streamlined processes between order entry, raw-material planning and production accelerates throughput and has cut the time to delivery. Production costing of the real

Microsoft Dynamics AX helps us to maintain the very highest quality standards while operating in a completely flexible batch environment. Tomasz Gesiarz, Director of Finance and IT, Lantmännen Unibake Poland

“As we have expanded our output and entered new markets, the demands on production have increased dramatically,” says Gesiarz. “We can't afford any slack. Delivery of seasonal and fresh goods demands very quick turnaround and we have to be prepared for any volumes. Microsoft Dynamics AX has really simplified the process of turning an order around. The whole system is far more flexible.”

Quality Systems Extended Throughout the Plant

Quality is fundamental to the success of Lantmännen Unibake Poland. The company has implemented BRC Global Standard Food, bringing together the leading international quality standards including HACCP, GMP, GHP, and ISO 9000. Maintaining BRC Global Standard Food requires strict product supervision at every stage of the food production, storage, and delivery process.

Microsoft Dynamics AX plays a key role in underpinning quality throughout the plant. With full integration to industrial automation devices such as thermometers, hygrometers, and metal detectors as well as the embedded weighing, recipe, and mixing controllers, full quality control is maintained at every stage of production, storage, and logistics. Implementing bar code systems across the production lines and warehouses supports the track and trace functionality that is essential in the food industry.

“We have moved to a very fast response, batch environment where maintaining total quality can be a real challenge,” says Gesiarz. “Microsoft Dynamics AX helps us to maintain the very highest quality standards while operating in a completely flexible batch environment.”

Warehouse Management Transformed

Before implementing Microsoft Dynamics AX, locating products within the warehouse was often difficult and time-consuming, leading to unnecessary delays. Managing correct environmental conditions for each product was a major challenge. And products delivered to customers were frequently the last in to the warehouse, leading to high wastage as other items exceeded their expiry dates.

Thanks to Microsoft Dynamics AX, Lantmännen Unibake Poland has full quality control and measurement of every part of the controlled storage environment, with complete integration into the business management system for product quality management. The implementation of bar code scanning on the forklifts, connected through a Wi-Fi network, to Microsoft Dynamics AX, has eliminated delays and product waste.

“Microsoft Dynamics AX has made a real difference to the way our warehouse is managed,” says Gesiarz. “Warehouse loss had been a real concern. We have now completely eliminated this. We have a ‘first expiry, first out’ system, which improves our product quality and is generating real savings.”

Employee Motivation and Productivity Improved

With rapid expansion, Lantmännen Unibake Poland faced a major challenge. It had to manage human resources over a much larger plant and ensure that employees’ productivity was maximised.

Using the Microsoft Dynamics AX Human Resources Management (HRM) module, Lantmännen Unibake Poland has developed an innovative approach to personnel development, as well as identifying any potential skills gaps among employees. It has also helped identify seasonal absentee rates. Lantmännen Unibake Poland was the first organisation in Svenska Lantmännen Group to implement the HRM module.

“The HRM module within Microsoft Dynamics AX is helping us to make the most of each employee’s potential. Using skills-gap analysis and personnel development tools means that we now have a far happier, better motivated workforce, with reduced absentee rates and higher productivity,” says Gesiarz.

Increased revenues: New Markets Opened Up

Since implementing Microsoft Dynamics AX, Lantmännen Unibake Poland has seen a significant jump in its revenues.

In addition to increased agility within the production area and improved logistics and supply chain management, Lantmännen Unibake Poland has also benefited from a comprehensive EDI implementation. To maximise EDI flexibility, IT PiAST installed Microsoft BizTalk® Server 2004, providing the ability to handle the widest range of EDI standards and configurations.

“The implementation of Microsoft Dynamics AX has not only generated real cost savings, it has helped us grow our business,” says Gesiarz. “Since implementing the new system, our income growth rate has really jumped. Our enhanced ability to handle orders and manufacture flexibly has seen our turnover increase from U.S.$9.5 million to U.S.$13.6 million, a remarkable increase of 43 per cent.”

“But the new business management system has had an even more remarkable effect in the new markets that we are entering. In March 2005, we entered the Makro Cash and Carry market. Initially we had terrific growth. But the volume of orders overwhelmed our administrative systems, while turnover fell by 50 per cent. Then the Microsoft Dynamics AX EDI solution came on stream and broke the bottleneck, increasing income in a single month by 600 per cent.”
 
Microsoft Dynamics
Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence. Microsoft Dynamics works like familiar Microsoft software such as Microsoft Office, which means less of a learning curve for your people, so they can get up and running quickly and focus on what’s most important. And because it is from Microsoft, it easily works with the systems that your company already has implemented. By automating and streamlining financial, customer relationship, and supply chain processes, Microsoft Dynamics brings together people, processes, and technologies, increasing the productivity and effectiveness of your business, and helping you drive business success.
 
For more information about Microsoft Dynamics, go to:
www.microsoft.com/dynamics

For More Information

For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234 in the United States or (905) 568-9641 in Canada. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to: www.microsoft.com

For more information about IT PiAST products and services, call +48 12 262 73 85 or visit the Web site at:
www.itpiast.com

For more information about Lantmännen Unibake Polska products and services, call +48 22 722 42 54 or visit the Web site at: www.lantmannen.com

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