SAP Business One: Food One Solution Optimizes Business and Compliance Processes for Castle Importing, Inc.
Castle Importing, Inc. is an Italian family business with roots in the cheese industry dating back more than half a century. The company's name is derived from the family's hometown of Castellammare del Golfo in northwest Sicily. Originally, their business focused on the processing of the standard sizes of hard Italian cheeses and then expanded to include custom cheese blends, private label programs and a line of high-quality Mediterranean olive oil products. Currently, with its state-of-the-art processing facility (over 70,000 square feet), Castle has expanded its product line with cheeses that can be processed into an infinite variety of packaging options for both retail and wholesale markets.
Manual "Pen-and Paper" Tracking Method Proves Unwieldy and Imprecise
As a large-scale producer of grated and shredded cheeses, as well as custom blends, Castle Importing, Inc. employs a highly complex procurement, production, packaging and shipping cycle that culminates in the delivery of finished products to its retail and wholesale customers.
Freshness and food safety are of paramount importance to Castle and to the U.S. Food and Drug Administration (FDA), which mandates that all food processing companies have the capability to "trace" every "ingredient" in their "recipes" -- commencing with the initial purchase of raw materials from their vendors through sales, production, packaging and shipping.
In the food industry, despite all possible precautions, the potential for a product recall is always present, and if a recall is warranted, it behooves a food-based company to have fully integrated systems in place in order to "trace" the exact cause of the problem and to take immediate corrective action. Until recently, Castle Importing utilized a manual "pen-and-paper" approach to conduct the tracing procedure required in the event of a product recall, which proved increasingly time-consuming, labor-intensive and risky as the company grew.
According to Castle Importing vice president Rosangela Borruso, "Whenever we conducted a "mock" product recall, we had to assemble a team of at least five co-workers to painstakingly examine scores of logs that contained records of receipts of raw materials, production data (including labeling and packaging), sales and customer data (including any special instructions) and shipping information . Since our systems were manual, it took too long to pinpoint the cause of the recall and the exact quantities involved in our simulation."
SAP Business One 'Food One' Deliver Superior Automation of Highly Complex Food Production Cycle
In early 2011, Borruso and her colleagues began to evaluate software options that could streamline their business processes, especially MRP, warehouse management, lot tracing for recalls and FDA food audits, as well as commissions and rebates for their sales force and customers. An initial examination of numerous products was disappointing since most of the solutions didn't offer the automated lot tracing functionality they needed. This led to consideration of a custom-designed solution from scratch.
Fortunately, they discovered SAP Business One, a robust and flexible ERP solution that appeared to fulfill all the items on their wish list. The company contacted a local SAP Gold Partner, Softengine Inc. (www.softengineusa.com), to demonstrate the features and benefits of the software and explain how the system could be modified to their unique specifications.
Softengine not only had an impressive track record of successful, high-ROI implementations of SAP Business One, they also had developed a complementary SAP software extension program that was designed expressly for food-based businesses 'Food One'. Together, this powerful combination could deliver superior financial management and inventory control functionality, plus complete traceability of every step and ingredient in their complex production process. Armed with this solution, Castle Importing could conduct quick and precise recall practice runs and maintain total compliance with all FDA requirements.
Comprehensive Inventory Control and Lot Tracing Functionality
After the SAP Business One 'Food One' solution had been installed, Castle Importing started to reap instant dividends from its fully automated, real-time inventory control system, especially in the area of lot control. "With the new system, I can pull up a serial number, item number or batch number and immediately see all the history behind that product," said Borruso. "For example, when we get an incoming product, shipping assigns a lot number. From that lot number alone, I can see where I purchased that item, where I used it and how much of that item is still in the warehouse -- all from one piece of information."
Central to the new solution was the optimization of its tracing capabilities. To achieve this goal, the Softengine programming team modified its Food One program to offer a wonderful new feature called "Multi-Level Trace," which automatically traces every step and ingredient of the entire cycle backward from the shipping documents received by the customer to the initial purchase order sent to the vendor.
From the Batch Number Transactions Report screen, a user selects a specific Batch Number and then presses the Multi-Level Trace button. The ensuing screen displays a comprehensive array of information pertaining to all the Items contained in that batch, including Levels, Item Codes, Recipe Descriptions, Batch #s for each item, Warehouse location, Quantity, UOM (Unit of Measurement), Ship Dates and Addresses of applicable customers and vendors. Once the specific items for recall have been identified, the user can press the Lock and Recall button, which freezes those items from any further processing and automatically generates a recall letter. This letter can then be sent to the appropriate vendors and customers associated with those items, thereby ensuring that every product is recalled and taken out of circulation.
"You have to be third-party, food safety-audited and you have to be able to conduct a complete recall procedure within two hours to meet the FDA compliance regulations," claimed Borruso. "With our new Multi-level Trace capability, we can produce a report that contains all the batches/lots, vendors and customers in the allotted time and have the confidence that we can pass any FDA audit procedure."
The enhanced system also enables users to locate any discrepancies that may appear in a particular recipe, by tracing back to a specific lot number, weight or quantity. This enables the production team to make adjustments before the product is finished, thereby reducing waste, costs and the potential for a recall later due to an error that wasn't caught in production. Plus, when they assemble a recipe, if they are lacking an ingredient needed to complete the job, they can either find a substitute ingredient (with the customer's approval) or have the system create a purchase order to obtain the missing ingredient. This saves considerable time and expense, since they no longer need to manually double-check every component, repackage and then resend the finished product.
Flexible Commission and Rebate Management
With its network of sales reps and brokers, and unique terms established for each customer, Castle Importing needed its new system to handle multiple commission and rebate types. For example, a salesperson or broker might get paid a commission for each item sold based on a percentage of the sale price or a fixed dollar amount by the case or by the pound. Similar options apply to rebates, where customers might earn a rebate on a per-pound or per-case basis and apply that to a future purchase or they might get their rebate in the form of a discount at the time of purchase if they pay by a certain date. The parameters for commissions and rebates may be changed at any time.
Sales Order and Purchase Order Guides Streamline Ordering Process for Castle Importing and Its Customers
Softengine augmented the core functionality in SAP Business One to create Sales Order and Purchase Order Guides, basically catalogs of items designed to streamline the ordering process between Castle Importing and its business partners (customers and vendors). When the Order Guides feature is opened, the user can choose to view all Order Guides in the system By Customer or By Vendor. If By Customer, for example, Castle staff can view the purchase history of any customer, including information such as the last price paid and quantity ordered for a particular item. Also included is a Customer-Specific Item Number, which provides information unique to a particular customer, including a complete bill of materials (BOM) plus any special instructions regarding preferred delivery times, packaging, shipping and much more, which is invaluable when a customer is on the phone.
A great time-saving benefit of the Order Guides is that Castle Importing can use information from previous sales orders or purchase orders and either simply copy or make changes to then instantly generate new sales orders or purchase orders.
Sales Order and Purchase Order Validation Tools Eliminate Unnecessary Duplication
On occasion, an order comes into Castle Importing containing a purchase order number that already exists in the system. Since duplication of purchase order or sales order numbers can cause unwanted complications for Castle, its customers and vendors, Softengine was summoned to modify the solution so that it would automatically send a warning whenever this condition arises. As a result, if the system detects a duplicate number, it generates an error message that the same purchase order or invoice could be posted twice. This alert gives staff an opportunity to go back and double-check why the number was duplicated and take corrective action.
Sky's the Limit with SAP Business One and Softengine
Leaving behind the manual systems they had relied upon for so many years wasn't easy, but Rosangela Borruso has seen the light. "I don't like change or surprises and I had a lot of resistance at first to totally revamping our business systems," said Borruso. "But now that we have been live with SAP Business One 'Food One' for some time, our ability to track everything in our complex production processes down to the smallest detail has saved us so much time and money! From the initial purchase order to production to invoicing and shipping, this solution pulls everything together. Plus, our financial information is always up to date and accessible in real time, so we never have to wait for nightly or weekly postings. In fact, this solution is so powerful, we have barely scratched the surface on all of its capabilities."
"I believe that the sky's the limit with this system as long as we have a great company like Softengine supporting it," added Borruso. "Any time we need a new customized report or we have an issue that requires immediate resolution, Softengine responds quickly and I come out smelling like a rose! Where would we be without SAP and Softengine?"