Friday 21st Oct 2016 - Logistics Manager

Visibility and control eliminates risk

Established for more than 110 years, Calypso Soft Drinks is a £26M company based in Wrexham, North Wales. The UK market leader in cup drinks, Calypso manufactures more than 500 million units a year to stock in a variety of single-serve packaging formats – mostly cups, Tetra cartons and freeze pops for its 14,973sq m warehouse. Calypso has 1,200-plus customers – it supplies all the major UK supermarkets as well as distributing through cash and carry and food service channels.

Calypso extracts an average of 110 million litres of Natural Mineral water, a major ingredient in its production processes, from a borehole at the Wrexham plant. In 2001, after months of hard work tracing the direction and age of the water, the source was given Natural Mineral Water Status and named Abenbury Mineral Water.

In 1997, Calypso was producing from two sites – at Tattenhall in Cheshire and Workington in Cumbria. Manufacturing capacity was at a maximum, and there was no room for expansion.

With the ongoing growth of the beverage market and Calypso’s consistent increase in turnover, the company decided to invest in a new multimillion pound purpose-built manufacturing and distribution facility in Wrexham, Clywd.

James Holmes, IT director at Calypso, explains: “We had simply outgrown the two sites and decided that the best course of action was to move to one purpose-built location which could cope with the current production and distribution needs and provide us with the room to expand. At the same time this gave us an excellent opportunity to review the existing IT infrastructure and the efficiency of our business processes.”

Calypso short-listed four leading software vendors back in January 1997 and chose Geac System21 Enterprise Resource Planning (ERP) solution to be the backbone of the company’s operations.

The full suite of System21 covers financials, payroll, manufacturing, distribution – including inventory and transport planning, sales order processing with both telesales and Electronic Data Interchange (EDI) functionality and also sales analysis. This was all implemented on an IBM iSeries 720 server.

Implementation took just six months to complete and went live in January 1998. The whole project was managed while the two factories were being moved to the one site at Wrexham. The system was up and running on the first day of the site opening. For the past five years, Geac System21 software has supported the majority of Calypso’s operations. Orders are taken by a dedicated sales order processing (SOP) team, with 80% received via EDI. The software automatically credit checks the customer and analyses stock availability. Order acknowledgements are then printed out and passed on to a transport planning department.

The software allows the SOP teams to identify any irregularities in the orders. Each customer has its own buying list and the last five orders are stored on the system, enabling the team to see any fluctuations in order quantities. If, for example, a regular order has not yet been received or the quantities are substantially lower or higher than normal, Calypso can immediately check this with the customer.

Quick supply

Calypso manufactures within a batch process production environment. Recipes are mixed and stored in tanks. These recipes are then fed through to the appropriate production line.

Most of Calypso’s products have a long shelf life. Therefore it manufactures mainly to stock and strives to maintain sufficient factory – there are about 7,500 pallet spaces, which means around one million cases can be stored – although actual quantities stored fluctuate according to the time of year.

During 2003, Calypso began a business-wide process improvement project. It invested in an innovative new pallet-tracking system from Agility Systems that will give it real-time traceability on its hundreds of different products. The real-time pallet tracking system uses radio data terminals to transact the pallets at each stage within the manufacturing process and supply chain.

Key for Calypso is to have a system that accurately recognises and records what has been produced and moved to finished stock. The introduction of this tracking solution will ensure both real-time accurate production receipts and inventory management.

The business wide process improvement project also involved the implementation of Geac’s business process management software, called process.connect, to speed up operational processes.

Holmes says: “We are continually looking at ways to enhance our processes whether it is to aid efficiency or improve customer care. The workflow and modelling capabilities of Geac process.connect ensures that rules we introduce for certain activities are completed effectively.

“In order to maintain margin, one of our business rules in the ordering process is that there is a minimum order requirement. When an order does come in that is under the required quantity an email is automatically created by the Geac system and sent to the telesales department, the customer’s sales manager and the distribution team. The telesales team will then immediately contact the customer to rectify this.”

Holmes continues: “This instant alert has proved to be extremely effective. Previously such orders would slip through the net and would sometimes not be spotted until the order came through to despatch. This caused delays and frustrations internally and meant that the customer would not be informed of the order minimum until a few days after.”

An exception to this however, is that if an order comes in that is under the required quantity but over a certain value it can be allowed to go through. Geac process.connect is flexible enough to take into account both these rules and ensures that all orders that are processed meet this criterion.

Calypso cites two main benefits that this process improvement has provided:

  • Cost control – Calypso now has an early warning system to ensure that unprofitable orders are not processed. This has resulted in time savings right across the business and maintenance of margins.
  • Improved communications – because an instant email alert is sent to a number of different departments it facilitates conversations across the organisation and has improved problem solving. For instance if an order comes through for under the required quantity from a customer in Birmingham and there happens to be a delivery going near the area with the capacity to take the order, distribution will let the sales department know this. The order can then be authorised without having to go back to the customer, leading to improved customer service.

Debtor risk

The drinks manufacturer introduced a further control within the sales order process. Now, whenever an order is taken there is an automatic check put through on the customer’s account. If an order is taken by the telesales department or through EDI that would result in the customer exceeding its credit limit or if the account is ‘on stop’, an email is automatically sent to the sales manager in charge of the customer, the sales order processing team and the finance department.

Holmes explains: “The extra controls that the Geac system enables us to put into our ordering process has resulted in our finance department having much greater control at a very early stage. Much of Calypso’s debtor risk has been reduced because we now have such good visibility. Because of the automatic email alerts it also means that the sales team is informed immediately of any problems with their customers via their BlackBerry handheld devices which they use in the field.”

Another way in which process.connect has automated and streamlined Calypso’s business processes is in credit management. Each day credit controllers receive a ‘chase’ list from System21 detailing all of Calypso’s customers who are late with payment. This provides an accurate call list for the team each morning, and also means that any temporary staff employed in the department at the time has a graphical, easy reference document to work from. This also shows processes and levels of authority within Calypso’s credit control operations. A great deal of training time and extra administration has been saved by implementing this process.

In 2004 Calypso began focusing on improvements in its production processes, including bringing advanced data capture to the production floor. Calypso is also planning to upgrade to System21 Aurora, Geac’s next generation ERP solution.

Holmes concludes: “Any changes we need to make to our manufacturing or distribution processes are taken as read because we are confident that Geac can support us in what ever direction we take. Every day sees a change to how we work because we are constantly striving to improve our performance. This is driven by the information we get from System21. We are constantly cutting and slicing the data to help forecast, budget and push the business forward.

“Another major asset with System21 is that it is constantly evolving and developing. This means there is no need for us to look elsewhere and it also links easily to other third-party systems that we use. We receive a great deal of pressure from the major multiples to operate in a certain way which is then pushed on to Geac to solve.” n