CGI implements QAD MFG/PRO and best-practices at Neilson Dairy to improve business management and lay foundation for complete supply chain integration

"This was the first ERP implementation I've been through where there wasn't an initial degradation of customer service. CGI helped us make this go so smoothly and seamlessly, customers didn't even know we switched systems. This was an absolutely significant event for us."

Mike Coté, VP Logistics, Neilson Dairy

Founded in 1893 as the William Neilson Company, and subsequently acquired by George Weston Limited in 1947, Neilson Dairy is the number one fluid milk producer in Ontario, Canada, selling more than 400 million litres of milk annually. Headquartered in Halton Hills, near Toronto, Neilson Dairy's operation includes manufacturing sites in Ottawa and Halton plus distribution centres in Halton, Toronto and Peterborough.

In addition to its 'core milk' business, Neilson Dairy's products include eggnog, chocolate milk, buttermilk, cream, and cultured products such as yogurt, sour cream and cottage cheese. Neilson Dairy recently expanded its product line with the addition of a family of shelf-stable milkshake products sold across Canada in plastic bottles.

The Challenge

Historically, the managing of Neilson Dairy's core milk business has been based on legacy department-oriented business processes – with little inter-department workflow – and limited use of technology. And the information technology systems they did use – such as finance, route accounting and sales order entry – did not integrate well, offered poor information visibility and often resulted in different departments having different data. This impacted communications and made the data hard to manage, making it necessary to validate data being moved from one departmental system to another.

The core milk business follows a relatively simple business model – produce it today and sell it tomorrow – and thus sophisticated inventory monitoring and supply chain visibility are not critical requirements. However, the legacy data management problems made keeping up their reputation for delivering top-level service to its customers an increasingly difficult task for the dairy.

Compounding these challenges, the introduction of its new line of shelf-stable products added significantly to the complexity of Neilson Dairy's business. Because the new products have a longer shelf life and are sold right across the country, they require a different business model and a more integrated business management system.

A better way to manage both product lines was needed to help Neilson Dairy overcome the challenges of trying to achieve a higher level of sustained customer service.

The Strategy

Drawing upon previous experience with similar business management challenges, the new management team at Neilson Dairy decided to implement an ERP system, and chose QAD's MFG/PRO solution after investigating several other products on the market. To validate their decision, they engaged the services of CGI Group to ensure MFG/PRO would be the best solution for their needs.

"We chose to work with people at CGI because we wanted to work with the best ERP consultants that specialized in MFG/PRO," says Fred Ferrer, Manager of Information Technology at Neilson Dairy. "Our management team had worked with them before and were confident they would deliver," adds Ferrer.

To clearly identify Neilson Dairy's business requirements and the objectives behind implementing an ERP solution, CGI conducted a series of interviews with line of business owners to profile their operations and needs. This enabled CGI to conduct a 'gap analysis' between what MFG/PRO could do and what the dairy needed it to do.

The analysis revealed a functionality gap that was subsequently closed by two custom 'bolt-on' applications developed by CGI to enhance MFG/PRO's capability. One, a Direct-to-Store Delivery (DSD) module required because of the short shelf-life of milk products, ensures the right orders get onto the right trucks going to the right stores on the right schedule. The DSD module includes support for handheld data-collection devices used by delivery truck drivers to modify orders and handle returns.

"In addition, a very talented group of CGI programmers developed a Rapid Order Entry module that enables us to efficiently handle the high volume of small orders we receive from nearly 4,000 'mom & pop' stores that call every day," explains Mike Coté, VP Logistics at Neilson Dairy.

Because this project involved redesigning Neilson Dairy's business processes to take advantage of ERP and to move them as close as possible to best practices – and was not about simply automating existing processes – CGI helped Neilson Dairy conduct a series of Conference Room Pilots (CRP). Used primarily for 'proof of concept' and to flush out process and system bugs as well as validating the data conversion architecture, the CRPs consisted of walkthroughs of all key business processes using the QAD system and a test database populated with a snapshot of the dairy's real production data.

"The consultants working with us clearly had a lot of implementation experience. They really contributed to how we should design our new business processes around best practices," comments Ferrer on the CGI people working on the project team.

Because Ottawa represents only a small portion of the dairy's overall core milk business, MFG/PRO was implemented there first so that the project team could manage the risk, yet still pilot the complete set of core milk processes. Following the Ottawa success, the system was rolled out to the remaining core milk locations. In addition, processes for managing the shelf-stable business were implemented at the Ottawa manufacturing facility where these products are produced.

Commenting further on the CGI team's role in getting a new system designed and into production, Mike Coté adds, "The CGI team contributed a lot of fresh ideas towards designing an effective solution, and kept challenging us on best practices so we wouldn't simply duplicate our old practices."

The Technology

• QAD MFG/PRO eB
• Progress Database
• Intermec 6220 Handheld Data Collection Devices
• Numerics Handheld Management System (HMS)
• IBM 650 pSeries Servers running AIX

The Results

Neilson Dairy has always had lots of data; but now it's real-time data, fully automated, and integrated across the entire organization. With all departments working with the same data and common processes, there is less manual data entry, less duplication and fewer errors.

Instead of taking a week, for example, it now takes only 24 hours to know what level of customer service is being delivered. In addition, the 10 to 12 shipping errors per week previously experienced have been virtually eliminated, and the daily task of planning delivery routes is now fully automated and managed by one person instead of five.

Along with providing decision makers with more accurate and timely data, the QAD system has delivered inventory management benefits critical to effectively managing shelf-stable products. In addition to providing production control, lot traceability and full inventory visibility – which helps reduce product obsolescence and wastage – the new system automatically manages inventory sharing, called "fair-share inventory", when on-hand inventory falls below total customer requirements. It also provides the ability to forecast requirements at any time for more efficient production planning.

"One of the most important roles played by CGI in helping us achieve these results was forcing us to maintain project scope and keep the combined team focused on the prescribed objectives," offers Coté.

Adding to this, Ferrer says, "We needed tools such as an ERP system to help with our processes; but we also needed CGI to show our business users that this application has been used many times before and can work for us. CGI was the glue that pulled together the processes, technology and people to make it happen."

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