Thanks to an SAP R3 roll-out, Campbell Arnott's can now use technology to track every aspect of the production process behind one of the world's favourite biscuits — the Tim Tam.
"We've just finished an SAP roll-out with the R3 suite now deployed across the business," Campbell Arnott's chief information officer (CIO) Paul Williams said today at an IBM roundtable. "It is punishingly unforgiving in terms of its integration and the discipline everyone needs to follow, so one of the things we did was to try and tell the story to everyone in our business so that they can get onto it and understand it."
To help staff understand the nature of the new system, how it works and how important it is to participate and record data accurately, the company ran a two- to four-hour course for every employee in the business.
"Of about 2500 employees in our business, there's around 800 users of SAP, so we needed to first explain what SAP is and how we're going to work under SAP to everyone in the business. We brought together a program and called it 'the life of Tim Tam' for branding reasons, but essentially what we wanted to do was show, in an SAP world, how raw materials and a demand signal from a customer kicks off producing a case of Tim Tams and how we move materials through the plant and, eventually, how they get sold to our customers," Williams said.
Post implementation, Campbell Arnott's is able to make Tim Tams with less waste and lower costs.
"While we don't make a Tim Tam faster and cheaper, we now know exactly how long it takes us to make [a Tim Tam], how much it costs to make it. The system interacts with the shop floor [and] all of the inventory that comes in is tracked. What that gives you is a very clear picture of exactly what the direct and indirect cost of making a Tim Tam is. That [level of information] gives us a lot of choices about where we put our bets."
The system also produces a large amount of information surrounding the distribution process.
"There's a standard direct cost associated with each warehouse. For example, if we're shipping from our Adelaide warehouse, that has to travel further and is therefore going to cost more on the supply chain and in labour. You can't do that in spreadsheets, you need a system which catches that level of detail all the way down," Williams said.
The company also added technology into the baking process.
"It's really about statistical process control. So in a baking process, it's about getting the right moisture content in the dough so that it forms properly and bakes evenly," he said.
Any mistakes lead to wasted ingredients, according to Williams. To avoid that, the company needs to know what's happening at every stage of the production process. With that knowledge, the company can reduce average waste levels.
"In any one product we have say 10 per cent scrap factor, and anything over that we can find out what's causing it. Now, we can say let's get that 10 per cent scrap factor down. You need to enable the people up and down the line to understand how to do that."
Williams shared the insights into the Campbell Arnott's SAP operations at a media roundtable at IBM's Innovation Centre in Sydney.
The roundtable was held to discuss the results of IBM's latest chief executive officer (CEO) survey and the implications the results would have on CIOs. Of the 1541 CEOs interviewed for the survey, 81 hailed from Australia/New Zealand.
The survey found that technology is now, more than ever, a driving factor in global business, and that this will put more pressure on the CIO to deliver faster, cheaper, more effective technology for a business that has the ability to recover quickly from faults and build customer relationships.