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Enterprise Resources Planning (ERP): Streamlining Business Processes and Upgrading Information Technology for a Food/Beverage Distributor

Food/Beverage Distributor $80mm Sales Revenue

A wholesaler of domestic and imported wines and liquors sells to on-premise restaurants, taverns, hotels, and clubs who serve liquor, such as VFW, located in Tennessee and Kentucky.  Annual sales are approximately $82-84 million. The company needed to substantially improve productivity in its distribution operations by modernizing its business processess and information systems. Rockford Consulting Group was asked to assist as an advisor, counsel, and outside independent/objective party to initially map the current business processes, and determine the potential economic benefits for implementing a new information system.

Cross-functional teams were organized by business cycles to facilitate this process. Business cycles were mapped.  We continued with an overview of cycle counting procedures and recent results of the cycle counts. We tested the percentage outages, comparing them to total typical line items picked.

The review of business operations, starting with the sales order cycle, and continuing on through loading of delivery trucks provided a perspective on the caliber of operations, its use of technology, and its idiosyncrasies. Our review of the IT system indicated that it is a 1970’s-1980’s vintage legacy, homegrown system developed to operate on the SYS/34 using RPG programming language, and rewritten over the years. We concluded that this system was a direct cause of an enormous amount of lost productivity and lost time in the organization. This happened as employees throughout the organization were forced to compensate by performing nonvalue-added tasks to compensate for system deficiencies.

The current system was not providing the information they needed, when they needed it, in a manner in which they could effectively perform their functional responsibilities.

We recommended the following:

  • Replace the current systems in place with a state-of-the-art Enterprise Resources Planning (ERP) system.
  • Use cross-functional teams to identify functional requirements, to evaluate and select the new system, and during implementation.
  • Implement inventory-by-location at receiving, warehouse, and shipping operations to have instantaneous visibility of balances at each inventory item-location.
  • Implement a transportation planning and routing module for picking according to delivery routes, and for delivery truck routing.
  • Move all transactional processing and posting receipts, issues, and inventory balance updates from the office to the source point at receiving, warehouse, and shipping.
  • Employ the use of RF units to implement bar coding scanning applications within receiving, warehouse, and shipping to remove the possibility of human error in purchase receipts, warehouse receipts, and picking.
  • Begin a formal process of cycle counting during downtime to increase and maintain an inventory balance accuracy to 98%
  • Develop written operating policies, procedures, and job instructions to provide long-term organizational sustainability, and to be used for personnel training.

    • Following this effort, we assisted the company define its system requirements, evaluate and select software/hardware/communications providers, and implement a state-of-the-art ERP system.  Business processes were streamlined using state-of-the-art technology, and integrated with the functionality of the new ERP system, combining the best of both.

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