What if you could reduce your physical inventory variance by 99%? Silver Spring Foods, a US food manufacturer, did just that, proving that they had not yet reached their perceived max capacity.
THE CHALLENGE
The world has changed a lot since 1929 and so has the way Silver Spring Foods runs its business. The food manufacturing company recognized that their current Enterprise Resource Management (ERP) system could not handle their developing business requirements and was unable to evolve as the company continued to grow.
“One of the biggest challenges we had was that we reached capacity – or so we thought,” said Noah Wallace, CIO of Silver Spring Foods. “We were lead to believe that in order to grow the business, we would need to physically expand the building, add additional manufacturing lines, and increase the staff. Something just did not seem right with that.”
The Silver Spring Foods team also found themselves producing unnecessary waste and wanted to run a leaner manufacturing operation. “It was not uncommon for us to have a $250,000 – $300,000 variance just in physical inventory,” continued Wallace. This concern led much of the evaluation discussions.
THE SELECTION
The food manufacturing company evaluated their needs and requirements in an ERP system in order to scale the business. It was determined that they were needed a system that: tied together customer service, accounting, manufacturing, purchasing, and shipping within a single tool; had strong data mining and reporting functionality; provided strong sales reporting; was configurable without customization; had strong sustainable technical support capabilities; and would not exceed ERP budget allocations.
“DEACOM ERP was the only system we saw that met all of our requirements without needing to be customized. As a result of this, DEACOM was able to provide us with a ‘Not to Exceed’ implementation quote, which no other competitor was even willing to discuss,” said Wallace.
Another benefit of installing a single, configurable system is the predictable quality and cost of ongoing IT support and maintenance. “When you think about it, no two customized ERP solutions are alike. Therefore, it becomes extremely difficult for a single vendor to provide ongoing support for each and every system. The Deacom team are all experts on the DEACOM system because every single one of our clients runs the same version of DEACOM,” said Scott Deakins, COO of Deacom.
THE RESULTS
With real-time access to every facet of the business, Silver Spring Foods is able to instantly gain a thorough understanding of operations to drive stronger decision making. Inventory management was perhaps the most notable improvement by applying DEACOM MRP. With all data living within one system, the manufacturer is able to fine tune material purchases to match current production needs, sales forecasts, and production schedules.
“With DEACOM, we are able to quickly isolate where time and materials are being wasted. The first year we were on DEACOM, we were able to scale our inventory variance down to $90,000 (from nearly $300,000). Today, Silver Spring Foods is in the $1,800 – $2,500 range for variance in our inventory. We have gained our efficiencies, proved we were not at capacity, and improved inventory management. Those three things alone have allowed us to grow the business without adding additional square footage.”
For more information about how DEACOM ERP can help drive efficiencies for food manufacturers, click here.
