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November 11, 2022

Golden State Foods modernizes manufacturing and operations with Dynamics 365

A core line of business for food industry leader Golden State Foods (GSF) is the production of liquid products like sauces, dressings, and condiments. GSF needed to modernize a 25-year-old legacy ERP (Enterprise Resource Planning) system that ran the Liquid Products division at two existing plants and set it up for a new plant to manage the business across the division locations seamlessly. To create a common modern platform with shared data, centralized reporting, and standardized processes GSF turned to Microsoft Dynamics 365 Finance and Dynamics 365 Supply Chain Management.

Golden State Foods

“We chose Dynamics 365 because we need modern technology that will evolve with us. The reality is that our business needs didn’t just change over the past two years—they were disrupted overnight by the pandemic. Fortunately, with Dynamics 365 we have a flexible solution that can adjust and adapt with us.”

Carol Fawcett, Corporate Vice President and Chief Information Officer, GSF

Golden State Foods (GSF) is one of the largest suppliers to the foodservice and retail industries. GSF provides 200+ leading customer brands to more than 125,000 restaurants in more than 50 countries from 50 locations and feeds more than one billion people every day. Always known for high quality, innovation, and customer service, GSF provides not just food products but also a customer-oriented logistics network, ensuring freshness and quality.

GSF started small, providing meat products and other supplies to restaurants and hotels in and around Los Angeles. In short order they began supplying hamburger patties to McDonald’s. (Famously, GSF helped refine and commercialize the Big Mac® sauce for McDonald’s in the late 1960s, along with hundreds of other quick-service restaurant products over the years.) You may not realize that GSF is the second-largest ketchup provider in the world, because their products are branded for their customers and don’t carry the GSF name. Sauces, dressings, and condiments continue to be a big part of GSF’s business. Today, their core business operations include processing of liquid products, protein (hamburger patties and other protein products), produce, and dairy along with providing custom distribution and other services.

This story is about GSF’s Liquid Products business, which includes sauces, dressings, condiments, syrups, and toppings. GSF provides hundreds of liquid products in a variety of packaging options to quick-service restaurants (QSR), from single-serve and dipping cups to bulk. Think of all the ketchup packaging options at your favorite fast-food restaurant: the ketchup pump at the napkin station, the single-serve packets included in your takeout bag, and the innovative quick-dispensing containers in the kitchen that put ketchup on the burgers. These are just a few examples of the many different SKUs (Stock Keeping Units) required by the changing needs of labor-conscious restaurant brands.

“We evaluated three different systems, including Dynamics 365, and made the end users part of that process to see what the application looked like, processes impacted, the different screens they would use, and how they would navigate the user interface. Their vote weighed heaviest, and Dynamics 365 won.”

Carol Fawcett, Corporate Vice President and Chief Information Officer, GSF

Before Dynamics 365 

GSF needed to modernize a 25-year-old legacy ERP (Enterprise Resource Planning) system that ran the Liquid Products division in the back-office and at two plants: one in Conyers, Georgia, and the second in City of Industry, California. Meanwhile, a new plant was in the works in Burleson, Texas, and GSF wanted to be able to manage the business across the division seamlessly. The vision was that all three plants would run on a common modern platform with shared data, common reporting, and standardized processes.

The two existing plants each had their own on-premises ERP application. Each plant’s systems had been heavily customized over decades in response to unique reporting requests. This meant that processes, data, and metrics varied between the two plants. Adding a third plant with another unique way of doing things would only make financial reporting and operational management more complexand harder to drive improvements. While breaking ground on the new Burleson plant, GSF decided to streamline systems, data, processes, and governance across all three facilities.

The desire for standardization drove the need for one common system, but of course not just any system. GSF knew that they wanted something modern and cloud-based that could adapt and grow with them, assuming they could find a cloud-based ERP that met their functionality needs.

GSF evaluated three systems for functionality fit, reporting capabilities, and overall ease of use. To make sure they got it right, the company involved the day-to-day users throughout the process of gathering requirements and evaluating systems. Ultimately, it was the day-to-day users who chose Microsoft Dynamics 365. Dynamics 365 outperformed the competitors by having strong online reporting and data management capabilities and an intuitive interface, which won over users.

The Implementation 

GSF set out with a goal to build one common technology blueprint to use as a foundation for all Liquid Products manufacturing plants. This was going to be a very large implementation. GSF chose RSM as their implementation partner, in large part because they felt a strong cultural fit.

Working closely with RSM, GSF deployed Dynamics 365 at the City of Industry plant first. The plant went live on financials and supply chain. Following the original plan, the team meticulously documented lessons learned in preparation for the next two plants. The implementation team then turned to the recently constructed Burleson plant to deploy purchasing and payables, enabling them to track the purchase orders generated at the facility. And then the Covid-19 pandemic hit, throwing a wrench into implementation plans.

The pandemic led to a dramatic overnight shift in demand. Food-service demand for bulk items fell sharply. Demand for bulk packaging of sauces dried up overnight as sit-down dining dropped to a small fraction of pre-pandemic levels. Meanwhile, demand shifted to other areas: drive-through dining levels soared, and the need for single-serve sauce packets shot up with takeout orders. Inside restaurants, self-serve ketchup pumps disappeared, and customers instead asked for single-serve ketchup packets. There was a widely publicized ketchup shortage1 during the pandemic as takeout orders spiked. GSF never ran out of single-serve ketchup packets or any ketchup SKU.

In addition to changes in demand for specific SKUs and packaging, turnover in the industry increased dramatically. Workers in the food manufacturing plant are essential to our food supply, and few plant-related jobs can be done remotely. The way people work changed overnight. Worker shortages and new safety protocols in the plants disrupted day-to-day operations.

With the drastic increase in demand, the plants were running 24/7 with zero downtime, creating a key challenge: How do you execute the steps of implementation (testing, cutover, go-live, etc.) when your plants are running 24/7?

To ensure its customers weren’t affected, GSF worked with each one to pre-order, and the plants made enough products to carry them through the cutover.

A huge part of implementing a new system is user adoption and training. Taking users from “green screen” systems that they’d been using for decades to a new state-of-the-art system like Dynamics 365 requires taking them away from their desks and day-to-day jobs and putting them in training rooms for hours. It means taking supervisors off the production floor where they’re needed to solve minute-by-minute issues and training them to use a tablet connected to live data. It means training managers in new ways to collect the data they need to run the business. And with pandemic turnover, the number of new workers who need training is higher than anticipated.

One of the key lessons learned from the first implementation in City of Industry was revealed in survey results. Associates wanted more training. GSF has a culture of ownership and employees rose to the challenge. Some associates took on two jobs to enable others to get the essential training necessary to do their jobs with brand-new tools.

The company’s goal was to provide training in a way that users could easily consume. GSF focused on continuous training of long-term and brand-new employees alike, offering training in a variety of formats so that employees could receive training in the format that was best for them.

The pandemic disrupted the implementation timeline, but it didn’t stop the program. Despite all the challenges, GSF pushed ahead with the implementation and is now up and running on Dynamics 365 Finance and Supply Chain Management at all plants.

The Dynamics 365 solution

All three Liquid Products plants are now live on Dynamics 365, using accounts payable, accounts receivable, general ledger, process manufacturing, advanced warehouse management, quality, and asset management for maintenance, repair, and operations (MRO). Here are a few highlights of how the system is running today to enable critical business processes:

  •  Quality and food safety: In the food industry, quality and food safety are key. Throughout the production process, batches of liquids are tested frequently. While the product is on the production line, workers take samples and log results or initiate a test. Testing used to take several days to complete in a lab. Now GSF uses Dynamics 365 supply chain application quality functionality with some enhancements to manage testing. The entire testing process takes 4–5 days.
  • Warehouse management: Dynamics 365 is being used to receive, put away, and consume inventory for production; report inventory as finished; store it in finished goods warehouses; and select it for shipment for customer orders. It prints GS1 standard barcode labels that are used at customers’ distribution centers for fast and accurate traceability. GSF is an innovation leader in the manufacturing world, making sure that customers and distributors know where the food that GSF produces is at all times for the safety of customers and consumers.
  • Asset management: The Asset Management Add-in for Dynamics 365 has a user-friendly tablet interface provided by an ISV (independent software vendor) add-on from Dynaway. It allows GSF mechanics to review work orders, ensure replacement parts are available, and schedule maintenance jobs quickly and easily. With the native integration of Dynamics 365 Finance and Supply Chain Management, parts consumed on work orders are removed from inventory and charged directly to the specific machine and production zone where they’re used for better financial controls. This fully integrated experience ensures production continues on schedule without unexpected downtime.
  • System updates: GSF has developed an automated testing process to minimize downtime related to scheduled Dynamics 365 service updates. The automated process enables GSF to apply updates in less than an hour—and thanks to clever scheduling, the updates coincide with maintenance crews cleaning the factories to avoid any interruption to manufacturing runs and other business operations.

Impacts and benefits

  • Supply chain visibility: With Dynamics 365, GSF Liquid Products operations managers have visibility across all three facilities and can make better decisions about what product is made at which facility. Production restraints can be minimized with better forecasting and better visibility to inventory.
  • Focus on quality and food safety: Quality has improved with great visibility to live data on raw material and finished goods testing.
  • Data visibility: With visibility to aggregated data in Dynamics 365, GSF can work cross-functionally between plants. One recent benefit of this collaboration came when investigating equipment variances and settings in relation to a production performance improvement project. With process and data standardization side-by-side evaluation is possible and best practices can be adopted across plants.
  • On-the-spot reporting: With the quick, robust reporting capabilities of Dynamics 365 and Power BI, GSF has reduced auditing and inspection process time and removed the burden of manual paperwork. Now, their auditors praise the speed at which they receive chemical and micro-check compliance reports.
  • Traceability ease: Dynamics 365 inventory scanning and tracking capabilities have streamlined the process of generating customer production and shipping reports, removing numerous labor-intensive steps to conduct traceability exercises.
  • Procurement optimization: Dynamics 365 eliminated paper forms and reduced administrative duties with simplified tracking and electronic review and approval of purchase orders. Today, GSF has an end-to-end solution for procurement through payments and can easily track expenses to ensure supplies are being allocated to the correct accounts.
  • Full visibility into operational and financial data: Business managers need to know how many cases were produced, where, and at what cost and margin per case. Finance managers love being able to export data easily to Excel. With Dynamics 365 and Power BI, GSF now has accurate and accessible dashboards providing a wealth of relevant operational and financial information to the right people to make the right decisions at the right time. For example, with all the operational data on the plants visible, plant managers can make better decisions on shift scheduling and are now able to plan for five-day work weeks instead of seven. This isn’t just a cost savings. It’s a fundamental cultural shift to attract and retain talent with a better work-life balance.

What’s next?

For 75 years, GSF’s culture has been one of learning, continuous improvement, and innovation. They were the first company to introduce one-stop shopping to quick-service restaurants. They invented and patented beef patty mold plates that doubled patty formation capacity, revolutionizing the entire industry. They adopted the latest optical sorting technology for produce, reducing costs and risk of injuries, while improving product quality and increasing yields. They created a more sustainable sauce dispenser for restaurants, enabling them to dispense more products, more safely and more sustainably. They’ve innovated leading-edge technologies to track, trace and monitor fresh beef products in real time throughout the supply chain. And among many other advancements, they continued the tradition of learning and innovation with the implementation of their new ERP system.

Among the next steps, GSF is planning to use Azure Data Lake Storage to provide near-real-time visibility of Dynamics 365 data. “Now that we’ve been using the system, we’re focused on optimization. How can we use the system to make better decisions?” says Carol Fawcett. The team is looking at key functional processes across all three plants to continue to standardize and optimize processes such as cycle counting, demand planning, supply scheduling, procurement, and more.

GSF is gearing up to implement Materials Requirement Planning (MRP) and harness the power of planning automation in their operations. They’re starting with process alignment to take advantage of built-in functionality and standardized training across all three plants. Other capabilities, like Asset Management, will continue to be rolled out at additional locations. Finally, a training program will be created to train new associates and act as refresher courses for tenured associates, designed to help GSF attract and retain the brightest and most innovative team in the industry.

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