MADETA: Effective Balance

Production of milk products is distinguished by a number of specific problems; they include, above all, lack of raw material and its limited durability, which in order not to be degraded or depreciated must be quickly processed. To cope in the optimum way with these processes on which success in both the local and foreign markets depends we have used from 1997 the information system MFG/PRO. It had been however proven in a short time that in order to keep up the company development there was required a system which would not be only orientated on the past and present. We therefore began to search for such system which would be capable of merging the process of the plan development and modelling with the controlling of achieved results, of enabling flexible responses to changes of both the internal and external conditions, as well as of simulating impacts on the management decisions regarding the company business performance and results.

Company characteristics

MADETA, a. s. is the largest food company in the Czech Republic specialized in the production of milk products. It includes eight production plants located in the region of Southern Bohemia and employs around 1,600 people. The company is at the same time the biggest exporter of milk and processes on an annual basis more than 500 mil. litres, with a turnover of CZK 6.6 bill. It offers its customers 250 types of products.

PRIOR TO BNS INSTALLATION

The information system MFG/PRO had rather covered the operational level of management but was unable to create an overall picture of business in figures, which could be utilized for assessment. We thus missed the supporting information for an effective dealing with business chains and felt more and more strongly pressure of the foreign competition from EU member-states and were affected by liberalization of milk purchases. We had at the same time no tool available which would be capable of unifying the information from all our eight plants and of making relevant comparisons.

AFTER BNS INSTALLATION

The Business Navigation System (“BNS”) has given us a competitive edge since 2001, significantly aiding to achieve ambitious plans of our company. It has been employed for the tactical management of production and trade and has an essential importance when developing and updating the company plan. BNS shall be gradually extended to other affiliated companies too, which provide auxiliary and supporting services. This will enable to create a united system, ensuring the planning of milk collection, production, trade and logistics for all the companies together. INEKON SYSTEMS specialists upgraded the system in 2004 and a part thereof was implementation of the system of data store as an interface between MFG and BNS.

What was the decisive point

Balance of the input raw material, its availability and optimum valuation put great demands on suppliers. The new system had to be distinguished by speed, adaptability, options of the variant planning and capability of integrating data from more plants. Our high demands in the above respects were met best of all by Inekon Systems.

Implementation procedure

The crux of success of the whole project was the Navigation Concept, which assisted in the clarifying of the planning process. Thanks to this study there could be created individual BNS modules including the areas of purchase, sale, production, financing and creating of the covering contribution. They were put into sharp operation gradually so that the final users could well adjust thereto.

Results

• Planning processes were accelerated and made more exact, which contributed to the company flexibility and thus to strengthening its position in view of the competitors in the market.
  
• Creation of results reflects the current market development and takes into consideration integrated data from eight company plants. Its benefit consists in several plan variants.
  
• We can flexibly respond to customer and business chains requirements.

Petr Krejčí, IT manager:

“BNS has enabled us not only to plan our business strategy in a short time but also the required quantity of raw materials and packaging and therefore to specify the financial value of the highest cost items. Upon comparing the reality with the plan we are able to correct both the input costs and business margins. The system has also enabled us to model certain variants, while assisting in strategic decisions taken up by the company management. The unbelievable number of various spreadsheets earlier has been made useless and the time required to process the above parameters and numbers has been reduced.
The system is now managed in its most part by IT department and its operation and development is independent, with exceptions, on its contractor.”