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American Dairy Brands, a $300M division of Dairy Farmers of America (DFA) which is the largest U.S. dairy cooperative marketing over 45 billion pounds of milk per year, has achieved substantial supply chain savings through Infor's Supply Chain solutions. Infor has given Dairy Farmers of America the ability to successfully manage the supply chain to drive service levels to greater than 99% for their Borden-brand cheese products.
Borden brand cheese, with the familiar face of Elsie the cow on the product label, has become a staple in many American households. With a diverse product line, including many variations of single slice cheese, shredded cheese and chunk cheese, American Dairy Brands (ADB) faced multiple supply chain challenges such as limited visibility of supply and demand, production inefficiencies, inventory variables and distribution constraints. American Dairy Brands needed a better way to manage their supply chain to ensure both customer service levels and margins were at their highest.
American Dairy Brands selected the Infor solution, including the Infor Advanced Supply Chain products and Infor Adage ERP, to manage all facets of their supply chain. "Infor has provided our American Dairy Brands division with capabilities for taking into account all of the constraints we face, allowing us to reduce errors, increase forecast accuracy, improve our safety stock calculations and substantially increase customer services levels", says Bill McCurry, Supply Chain Systems Manager at Dairy Farmers of America. "In fact, since our Infor implementation, the American Dairy Brands division has been able to achieve a greater than 99% service level on shipping to customers".
Driving Supply Chain Efficiencies
One of the most significant and most complex challenges faced by American Dairy Brands is the management of the varying process industry supply chain constraints which include material and product shelf life, inventory and safety stock quantities, production capacity limitations, and distribution constraints. By not taking these issues into account throughout the overall production plan, it is difficult to ensure that the right product is produced at the right time to satisfy consumer demand. It is also difficult to sustain competitive margins when you are losing your profits to supply chain inefficiencies.
For American Dairy Brands, when raw material enters the supply chain, where raw material consists of cheese that requires further processing, choices need to be made regarding the right product mix that will provide the most substantial profit margins, within the constraints of meeting customer service requirements.
With the Infor advanced supply chain planning solutions in place, American Dairy Brands is now able to make productmix- profitability choices by taking into account all variables and constraints in the supply chain, as well as look downstream to map it against the demand. They are now able to make optimized recommendations based on all of the constraints, enabling the best plan to ensure quality assurance, customer satisfaction and the best margins possible without tedious workarounds. In addition, Infor solutions allow American Dairy Brands to react quickly to changes in the supply chain, such as raw material availability and remaining shelf life.
McCurry states, "Like most manufacturers, our business goal is to achieve the highest customer satisfaction at the highest possible profit margin. Infor supply chain solutions have enabled us to meet these goals through better planning processes".
Staying Ahead of the Competition
Although Borden is a well-known brand with a very successful product line, they, like many other food manufacturers who focus on the consumer market, must take proactive measures to stay ahead of the competition and to continue to recognize revenue growth on a continuing basis. To do this, American Dairy Brands frequently introduces new cheese products to the market, which poses numerous supply chain challenges. For example, determining which products will be successful in the marketplace requires the accurate forecasting abilities to determine if there will be demand for the product. It also requires the ability to review historical trends in the forecast on which to base new product decisions. The addition of product SKUs also significantly impacts manufacturing processes, from production capacity to scheduling challenges, the overall supply chain plan must be able to take new products introductions into account.
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