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April 26, 2022

Tillamook County Creamery optimizes growth and performance with Dynamics 365

Tillamook County Creamery Association is a farmer-owned cooperative based in Tillamook, Oregon, founded in 1909 and owned by about 80 farming families. To support their growth plans, Tillamook needed a modern solution to scale and enter new distribution and sales markets, leading them to migrate to Dynamics 365 Finance and Dynamics 365 Supply Chain Management. Dynamics 365 now serves as the core ERP and system of record.  The flexibility of Dynamics 365 has supported a complex architecture of bi-directional integrations to the ERP system which continues to evolve as Tillamook grows.

Tillamook

“A lot of times, people think that Oracle and SAP are the only large ERPs that can support a complex business. That’s not the case! … with the Microsoft and RSM solutions, we’ve been able to address these problems by making accurate, real-time information about operations available to everyone who needs it. This not only makes us more productive and cost-effective, but we continue to augment and improve the flexible Microsoft Dynamics 365 system, adding more agility to engage with existing customers and gain new ones," says Travis Pierce, Director of Information Technology at Tillamook.

Tillamook County Creamery Association is a farmer-owned cooperative based in Tillamook, Oregon, founded in 1909 and owned by about 80 farming families. Tillamook is known for cheese, as well as ice cream, yogurt, cream cheese spreads, sour cream, and butter. For a dairy business, quality of raw ingredients is of utmost importance, and leads to the delightful and sought-after tastes and textures that loyal customers love. Tillamook lives by its slogan: “Do right by every bite,” highlighting its commitment to quality ingredients and stewardship.  

In the Pacific Northwest, Tillamook cheese, ice cream, butter, and dairy products are ubiquitous – they are in almost every grocery store and easily found at convenience stores and gas stations. Tillamook is growing, fueled by:

  • Expanding product lines: Tillamook is adding new products to expand the variety they offer . SKU proliferation is key for growth, but it means increased complexity in production and supply chain, from planning to distribution to procurement. This means Tillamook needs more mature, sophisticated systems to support these business complexities. 
  • Expanding regions: Once focused solely on the Pacific Northwest, Tillamook has expanded nationally, and their products can be found across the United States. Now, nearly 1 in 4 households in the U.S. buys Tillamook (IRI, 23.3% HH pen; 52 weeks ending 12/26/21).


To support these growth plans, Tillamook needed a modern solution to scale and enter new distribution and sales markets, leading them to migrate to Dynamics 365 Finance and Dynamics 365 Supply Chain Management. Dairy production has its own unique complexities and needs, and Tillamook partnered with RSM to provide dairy-specific capabilities: RSM Dairy Management and Accounting Solution. Dynamics 365 is flexible, so unique functionality (that which is not available in the base product) can be easily extended through safe and upgradable modifications. 

“Contributing to scaling business growth – technology has been critical in supporting a significant increase in business transactions," says Pierce.

Tillamook had just begun their ERP modernization journey with Dynamics 365 when the global COVID-19 pandemic hit, disrupting demand and supply seemingly overnight. As governments issued stay-at-home orders, demand for grocery products shot up as people ate less in cafeterias and restaurants and more at home in their own kitchens – and demand for Tillamook grew as well. Having the new system in place enabled Tillamook to navigate the disruptions much better than they would have been able to in the old system. “We would have had more business impact from COVID if we didn’t have Dynamics 365 in place,” says Evelyn Austin, Manager – Applications, Tillamook.

The post-go-live stabilization and optimization accelerated because the new capabilities were more critical than ever to meet increased demand with a smaller workforce. “Even though we had only been live for four months, once COVID-19 hit and the demand spiked, we were able to support it,” says Pierce. “It’s a flexible system, so we were able to adapt quickly to new business needs,” he continues. With Dynamics 365, Tillamook has increased system uptime, automated key manual processes, expanded system capabilities to new areas of the business and reduced reliance on consultants to support system upgrades. “Being in the cloud helped, because we could work from home with no security impacts”, says Pierce. With Dynamics 365, Tillamook now has a highly scalable, innovative ERP platform to support continued growth. 

“There’s been this thing with ERP over the past few years where you avoid customizations to the software so that you can take upgrades. That’s a thing of the past with Dynamics 365. You can modify the system to meet your unique business processes, adjust the logic and configure, and it still takes the updates seamlessly. We have some unique processes here with our complex supply chain, and we’ve been able to modify the system and still take those upgrades," says Pierce.

Why Dynamics 365 - business process, challenges, and opportunities

Tillamook was running on a mix of NAV, Demantra, custom systems, and manual external processes. 

Producing high quality cheese and dairy products comes with a unique set of business requirements for ERP systems support. Here are a few of the business processes and needs that drive key systems requirements: 

Traceability throughout the lifecycle: In today’s world, food manufacturers need the ability to track and trace quickly and effectively in the event of a recall. The financial implications of being able to recall only those products impacted from a specific batch (versus pulling all products from the shelves) are enormous. To accomplish this, they added a lot trace accelerator, and Dynamics 365 lot tracking makes this possible. 

  • Supply chain visibility: Tillamook as with many food and beverage companies operates within a complex supply chain network.  Dynamics 365 allows them to digitally replicate the flows of products and information across their entire supply chain.  Inventory movements are tracked across their ecosystem for real-time inventory visibility, centralized and proactive replenishment, and a simplified customer experience. 
  • Production planning, and implications with cheese aging: Tillamook’s flagship product, cheddar cheese, is made today using the same recipe they’ve used since 1909 and naturally aged.  The medium cheddar you see at the stores is aged at least 60 days while other cheeses are aged for many months to many years. Dynamics 365 manages the aging automatically. 
  • Automation in the warehouse: At the height of the pandemic, warehouse automation with Dynamics 365 allowed Tillamook to meet demand, shipping at about 40 percent higher than pre-pandemic rates. The Dynamics 365 warehouse management system is a primary enabler for automated picking which not only allowed them to maintain warehouse operations during the pandemic, also resulted in a 50 percent increase in throughput and 10 percent fill rate increase to 98 percent.


“We’ve gone from a roughly 88% fulfilment rate up to 98% in just a short amount of time that we’ve been live with this new automated case picking process in Dynamics 365," says Mike Konruff, Supply Chain Supervisor at Tillamook.

  • Analytics and reporting: Reporting was a big focus for Tillamook, and they built an extensive data warehousing solution to aggregate data from Dynamics 365 and various other systems and a broad range of reports to support the diverse needs of the 400-business user across farm services, manufacturing, quality, supply chain, sales, and finance. Today there are ~300 reports, and 75 workspaces used on a day-to-day basis to provide valuable insights across their entire business. 


Implementing Dynamics 365

Tillamook started their Dynamics 365 journey in 2017 with a request for proposals. After reviewing many solutions, the choice came down to Dynamics 365 or SAP. Ultimately, they chose Dynamics 365 for the flexibility and productivity tools as well as the dairy accelerator with RSM. 

Tillamook went live with Dynamics 365 at all locations in late 2019, just before the pandemic hit. 

Impacts and benefits

The impacts and benefits include:

  • Modern platform for growth: Implementing a modern platform supports long-term growth and scale as Tillamook expands its product offering and moves into new regions and markets. With growth comes an increased volume of transactions. For example, from 2018 to 2020, order line counts increased 100 percent. However, by implementing Dynamics 365, Tillamook managed this increased volume without increasing workforce – instead, by increasing automation to make each worker more productive. 
  • Increased operational performance and productivity: During the pandemic demand increased, as did case pick volume: Tillamook began shipping about 40 percent higher than pre-pandemic volumes. Case pick can be a major consumer of warehouse worker hours. Some companies would have seen throughput and fill rate metrics go down with this increased demand and increased case pick volume; however, with the Dynamics 365 implementation Tillamook handled the increased demand and hit higher metrics with less effort. Some of the improvements include: 50 percent increase in throughput of pallets (pallets built and shipped per hour and 10 percent increase in fill rate (to 98 percent)
  • Intuitive user interface that enables use of flexible workforce: If workers were out, Tillamook needed to quickly find alternate staffing solutions. With the old system, which was not intuitive to use and required a significant amount of training and institutional knowledge, Tillamook was unable to fully leverage a temporary workforce. With Dynamics 365, employees from across the plant and corporate level learned how to pick and ship orders in no time, allowing for greater flexibility in the workforce. 
  • Regular updates without consultants: Tillamook uses the full benefits of software as a service (SaaS) ERP, and upgrades two to three times per year with minimal effort and maximum success. They do this with their own lean IT team and do not need to rely on expensive external consultants for updates. 
  • 24/7 reliability in plants with cloud and edge: Previously, Tillamook had stability issues because the integrations with their ERP were not reliable. This could cause the plants to go down and made it challenging and risky to make updates to the system. Dynamics 365 enabled cloud and edge reliability and that coupled with Dynamics near-zero downtime capability keeps their plants up and running 24/7 even while the ERP requires maintenance or updates. 
  • Single-source of truth across operations: Dynamics 365 serves as a single-source of truth and provides enhanced visibility across all operations. Today, Tillamook has about 300 reports and about 75 dashboards in Dynamics 365. Using Power Platform together with Dynamics 365, Tillamook provides the ability to aggregate the data and generate meaningful insights and reliable metrics. This improves visibility, performance, transparency, and accountability. Information that Tillamook’s employees have with the system – with analytics, with dashboards – to help them make decisions.


Solution architecture

Like many large companies, Tillamook has many different systems serving different business needs. Dynamics 365 serves as the core ERP and system of record.  The flexibility of Dynamics 365 has supported a complex architecture of bi-directional integrations to the ERP system which continues to evolve as Tillamook grows.

What’s next? 

Tillamook is currently implementing project accounting for capital projects; and in the warehouses, they are rolling out the new Dynamics 365 warehouse management mobile application to drive greater efficiency and ease-of-use.  

Going forward, Tillamook will look to automate more transactions to help with supply chain and inventory accuracy, as well as implementation of credit management, segregation of duties and migration to Azure data lakes with Dynamics 365 for data warehousing and analytics.

“We continue to augment and improve the flexible Microsoft Dynamics 365 system, adding more agility to engage with existing customers and gain new ones.”

Travis Pierce, Director of Information Technology, Tillamook

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