Fonterra Brands New Zealand - Case Study

Based in Australia and New Zealand, Icon Integration is a strategic partner to The Config Team and specialists in SAP, Supply Chain and Business Intelligence. Icon Integration is a reseller and implementor of the Movilizer for SAP Logistics application suite.

Who is Fonterra?

Fonterra is the world’s largest dairy exporter and share their products with more than 140 countries and one billion people every day.

New Zealand is home to their 10,000 farmer shareholders and the base for global operations. With more than 30 manufacturing sites across the country, Fonterra processes about 16 billion litres of milk every year. They export about 95% of their domestic production and at peak they close the door on a container of dairy exports every three minutes.

What process were they trying to improve?

Previously Fonterra’s store delivery process was a paper-based process. This meant no form of electronic proof of delivery – relying on paper delivery dockets, physically signed, hard to locate, with many hours of manual data entry required. These piles of paperwork ended up back at the depot taking a long period of time to track and enter manually back into their SAP system.

In the old system Fonterra had no effective way of easily knowing what was delivered, when it was delivered and what was accepted. Who signed for the delivery? Was it delivered to the right location?

As a result, Fonterra’s credit returns policy was largely based on strong customer relationships and goodwill, but clearly warranted improvement. A better control and standardised approach was needed as it wasn’t always possible to verify accuracy of deliveries through Fonterra’s Auckland delivery fleet.

What was the solution?

Only a year earlier, Fonterra had commissioned a new state of the art distribution centre in Mangere, servicing the North Island. The Warehouse Management Software (WMS) deployed to manage the warehouse processes was the SAP EWM platform. This included best practice mobile integration of Voice directed & RF processes to help accurately and efficiently manage the storage and retrieval of chilled, frozen and ambient products supporting demanding customer requirements.

After partnering with SAP NZ and Icon Integration to successfully deliver this significant transformation for the new DC, they enlisted the expertise of Icon Integration in order to provide delivery drivers with a best-of-breed Proof of Delivery mobile extension integrating directly with Fonterra’s SAP ECC environment supporting the Fresh White Milk Business unit.

Matt Kirdy, DC Network & Optimisation Manager from Fonterra Brands NZ explains they were in the market to find “a mobile platform that was quick, easy and agile” for their operations.

Icon Integration have a strong foundation and history anchored in SAP and supply chain and chose Movilizer due to its certified direct integration into SAP’s premier backend systems and a highly secure cloud mobility platform.

What were the benefits?

With the Movilizer application Fonterra are now able to do more than ever, they can scan in and confirm deliveries at a pallet level instead of an order level, so everything leaves the DC scanned and accepted by the driver. The pallets are consolidated correctly via EWM with ownership back on the driver to verify the stock they are delivering. This has helped pallet accuracy quite substantially, the ‘scan to load’ application builds the delivery as you load the truck.

Safer working environment:

With added in health and safety checks, Movilizer has provided increased fluency with the transport management team and safer working environment for the drivers. The correct checks and balances are now in place to ensure Fonterra are providing the best working environment for their staff. The vehicle inspection and driver chain of responsibility removed further paperwork and assigned it to each drivers’ delivery route.

Better visibility:

Fonterra’s new proof of delivery application added more than just sign on glass, they now have better visibility of the entire delivery, including exact latitude, longitude with an attached photo capture including items temperature on delivery for both chilled dairy foods and beverage categories supporting their quality and traceability standards.

Upon this proof of delivery verification, this triggers the invoicing only after the customer has confirmed the stock order and when the customers sign on glass, a tick box was added which alerts the Fonterra offices to require a call from customer service. This is directly integrated with their CRM system, logging a call and assigning it to a support staff to call the customer.

Happier customers:

Movilizer gave Fonterra the foundation to implement an improved returns policy and makes it easier for the customer to only be invoiced for what they verify at delivery. This has allowed Fonterra to investigate discrepancies in real time. Investigations can now take place while the stock can be receipted back into the supply chain - important for such short shelf life products like fresh milk. Cycle counts can also be made real-time to amend stock discrepancies.

ROI:

With a solution delivered to Fonterra via the Movilizer rapid enterprise application development platform, Icon Integration delivered a go-live application from first meeting in 12 weeks (including sandbox, development, QA, pre-production and production environment).

The benefits were real, with the proof of delivery capabilities, they have received a major reduction in stock credits in the first year. The pallet and milk crate tracking enabled them to monitor their assets all over the Auckland metro area. With major improvements to the warehouse processes, scan to load into the truck and reissue goods back to stock, this added real process to claims, credit returns and their reverse logistics. This has helped progress customer traction, with an improvement in the Advantage survey grocery industry benchmark, jumping Fonterra from 26th position to 13th in the same year.

The Movilizer implementation created a return on the initial investment for Fonterra within six months.

You can download the full case study here or contact us to see how mobility could be used within your SAP supply chain.