Keeping it simple

The Irish Dairy Board (IDB) is a major international exporter of Irish dairy products, servicing the needs of customers worldwide. Established in 1961, the Board has become one of Ireland’s biggest exporters and a major food distribution company in overseas markets, with annual sales of almost €2 billion.

The IDB, which has subsidiaries across Europe and the US, owns the internationally established Kerrygold brand (the Irish dairy industry's most important marketing asset) and its product portfolio is divided into two main segments: consumer business and food ingredients.

The IDB sources product from member co-operatives and suppliers of varying size and IT capability. It utilises over 80, third-party storage locations across Europe and interacts with a large number of diverse service providers, agents and distributors. As a result of the constantly expanding B2B environment, it required a solution that would provide efficient and cost effective communications with its trading community and to support its growth strategy.

A solution was required which would provide the necessary communications infrastructure to handle the real-time exchange of time sensitive data. Cheese for example is a ‘living’ product which is sensitive to changes in environmental conditions and composition which ultimately affects its quality. IDB relies on the timely and accurate exchange of such information between its suppliers, warehouses and customers.

A key requirement was for backend integration with its Movex M3 ERP system. Movex has been implemented across its European subsidiaries and one site in the US to manage the flow of information with trading partners.

Food Solutions caught up with John O’Moore at the IDB along with John Nugent.

FS. Information technology is an increasingly important part of any food producer’s operations. Where are the pain points in your organisation, and how has IT helped address some of these issues?

JOM. We are a 24/7 exporting organisation and logistics plays a key role in our operation. We have a complex environment of suppliers, customers, third-party warehouses and service providers. One of our roles in IT is to facilitate the supply chain and streamline the delivery process. We are engaged with a broad range of third-party organisations who are outside our direct control. This presents a significant challenge for integration between the supply side, the logistics side and the end customer.

What systems have you put in place to support your operations?

JOM. A number of disparate systems were in place throughout our group. In recent years our strategy has been to seek standardisation in terms of the software platform and the IT infrastructure. The goal is to harmonise business processes and facilitate consolidation.

Across Europe, we’ve partnered with Lawson (formerly Intentia) to implement their ERP product - Movex M3 and with Sterling Commerce to implement their B2B solution - Gentran Integration Suite (GIS). This has been completed in the majority of our European companies and we are now in the final stages of its implementation.

FS. Have you witnessed any particular benefits from implementing this system to date?

JOM. The main benefits have arisen from improved information flow, cost savings, efficiencies and standardisation. Ultimately it is all about serving the customer, and the systems have provided us with a basis of information that allows us to streamline our processes, be more efficient and deliver a first class service to our customers.

Many of our customers are European multinationals who demand an exacting high level of efficiency and service. The Movex software, together with GIS, has facilitated us in improving processes and procedures which ultimately are instrumental in achieving the levels of service that these organisations require.

FS. The nature of your products presents certain unique challenges. Cheese, for instance, is a ‘living’ product that changes over time. What unique challenges does this present in terms of communicating up-to-the-minute information between suppliers and distribution centres?

JOM. Cheese is a living product, constantly changing. The marketplace includes the full range of variants from relatively young mild cheese through to extra mature. It is vital that we manage our stocks efficiently in order to satisfy market demand. A number of integrated systems are in place that track the product from the initial production stage through its full lifecycle to the consumer. The systems record both composition details and grading results and provides up to the minute information down to the level of each pallet of product. This information is held centrally and is used to match customer specific requirements against current and projected stock composition and characteristics.

It is not just about tonnage in a warehouse; it is about tonnage of a certain quality of cheese, or cheese that possesses certain characteristics, and matching the product with the current and long-term requirements of our customers. The goal of the system is to facilitate the planning and simplify the control processes required to manage the maturing and distribution of a living product.

FS. How important is traceability to your organisation? How does IT help bring transparency into the production/distribution chain?

JOM. Traceability is absolutely critical. Like all natural foods, our products are subject to inherent natural variations during both manufacture & storage and the system ensures that we can trace the product throughout its lifecycle.

We must be capable of identifying the origin and ultimate use of all our products. To address this challenge we have a number of electronic transmission systems in place providing details of the quality of the product, stock movements and related purchase and sales transactions. Data is recorded at pallet level providing the IDB with complete visibility throughout the full life cycle of the product.

JN. In terms of traceability it is primarily about accuracy of information. We are close to reaching a point where 100 percent of our transactions are electronic. The absence of manual entry ensures that the information we have is accurate and reliable because it is coming typically from the manufacturer’s own laboratory systems.

We are using software products and services from Sterling Commerce to provide a front end to the ERP system. We are processing information from a broad spectrum of sources and have recently begun using the AS2 functionality which is a seamless internet based method of transferring information from our logistical parties. Sterling Commerce GIS solution manages the data transfer and handles all the data transformations.

We are engaged with logistical partners of varying size and complexity. Some are very large companies using a range of ERP systems. Conversely we have smaller partners using either flat file or XML formats. A web portal supported by GIS provides real time access for locations with limited B2B capability. Our systems need to be capable of receiving data in a wide range of formats and to translate the information for processing by the Movex ERP system. GIS controls the flow of information between the ERP system and the logistics partners. Up until recently, we used a previous generation of EDI software but are currently in the process of replacing this with the latest release of GIS which will meet our current and future B2B requirements.

FS. And how is your new IT infrastructure supporting the IDB’s growth strategy? What’s next for the IDB?

JOM. We are now fully operational on a 24/7 basis, with high-availability and mirroring on the hardware platform. We are trading in most countries around the world, and to support our customer base in all time zones we need to provide a full 24/7 service. It’s been an important part of our growth strategy over the last few years. The migration from a frame relay network to an MPLS environment adds further flexibility to our IT infrastructure.