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Grounded on reliable systems for smooth operations
[November 12, 2006]

Grounded on reliable systems for smooth operations

(New Straits Times Via Thomson Dialog NewsEdge) COMPANY name: Munchy Food Industries Sdn Bhd Established: August 1991 Nature of business: Confectionery products producer THE Munchy brand is not new to the local market. The company has been around for more than a decade, producing various types of confectionery products from biscuits to wafers.

As a fast-growing company, Munchy Food Industries Sdn Bhd understands the importance of having a reliable and robust information and communications technology (ICT) system to ensure its operations are always smooth and one step ahead of its competitors.

According to Munchy Food Industries' managing director C.K. Tan, the rapid growth has forced the company to re-evaluate how it conducts business, especially in tracking communication among vendors, buyers and other partners.

"The IT infrastructure we were using could not keep pace with the company's growth. The mixed IT environment hindered operational efficiency, decision-making and communication to customers and partners." Tan adds that the solution required the company to batch orders that cost them time, orders, and profit.

"At times, reconciliation was nearly impossible due to volume and data integrity issues," he adds.

Business intelligence is also considered as one of the main "weapons" to compete and stay competitive.

"We also needed a tool that will make us better at predicting future sales. Previously, the employees used several different tools for the different steps of the forecast process and these tools were not integrated. As a result, our forecasts were not always accurate and there were often production stops due to missing raw materials," Tan elaborates.

THE SOLUTION. Munchy Food Industries realised that it is hard nowadays to operate and compete effectively without the aid of technology tools such as enterprise resource planning/customer relationship management (ERP/CRM) financial reporting, etc.

Towards that end, the company opted for Microsoft Dynamics AX, an ERP solution which is capable of driving operational excellence from financial reporting, manufacturing and distribution operations to CRM.

"After considering several options, we found that Microsoft Dynamics AX was the best solution available in the market. It is being implemented in stages, over two years, and will be completed in September 2007," says Tan.

To date, Munchy has completed the implementation of the ERP solution in the manufacturing division and it is now looking into the distribution, sales and marketing division.

With Microsoft Dynamics AX, Munchy now has greater visibility and accessibility into accurate data to make better and faster decisions as it continues to expand its business.

"Today we are delivering our products to 15,000 food and retail outlets nationwide and to over 50 countries and territories. We are continuously expanding into new markets. Such an aggressive growth needs to be grounded on reliable systems that are able to grow with us. Managing a 240,000- square-foot manufacturing facility is also a challenge that Microsoft Dynamics has been able to help us with.

"We have also seen improvements that help us drive our business forward and meet market challenges. For example, our financial processes have been simplified as we are now able to interface with our bankers' payment system and time-consuming data entry has now been replaced with automation," says Tan.

THE BENEFITS. Munchy Food has gained several business and operational benefits from the Microsoft Dynamics AX implementation. Firstly, the company now has greater forecast accuracy.

"With better access to data, we are now able to meet customer demands and anticipate customer needs much more precisely. There are no longer production stops due to missing raw materials and there is an improved balance between demand and supply," says Tan, adding that Munchy now has a much better way of growing the business and can forecast with greater accuracy.

Besides that, inventory visibility and integration is also now possible.

One of the key drivers for the project was to break down the information silos that existed in the company and introduce a new level of inventory control and management that recognised and addressed the critical need for accurate and immediate information.

The ICT upgrade has also enabled Munchy to build productive vendor relationships as the solutions help employees improve relationships with vendors and trading partners by giving them access to vendor communications, agreements, and commitments.

"The supply chain functionality in Microsoft Dynamics also helps us monitor and report on the actual productivity and business value of vendor and partner engagements, and implement appropriate course corrections," says Tan.

Finally, the reduction of operating costs. Since Munchy now is able to plan better, it can optimise the balance between its delivery performance and inventory levels.

"Employees spend less time on the forecasting process and they have minimised the time spent on updating purchase orders and calling suppliers. This has resulted in a better use of production assets," says Tan.

There are also fewer production stops due to missing goods, and less time spent on order updates. The company is thus able to focus production and sales resources on products and customers that matter.

Copyright 2006 The New Straits Times Press (Malaysia) Berhad. Source: Financial Times Information Limited - Asia Intelligence Wire.

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