LycoRed
LycoRed is a leading supplier of vitamin and mineral
blends, many of them household names. New ownership signalled the
search for a manufacturing solution that was a perfect fit for the
company's size while providing the flexibility and agility needed
to outperform larger competitors. LycoRed found the answer in
Access Supply Chain.
The challenges
Under the previous ownership of German based group Merck, the
site had tried to adopt SAP. It's a common scenario for a small
business to be force-fed a system by its parent, but, as is often
the case, it proved to be a difficult exercise. Nigel Nash, the
firm's Company Secretary and Financial Controller, explains,
"Instead of the system meeting our business needs, we had to try to
change our operations to fit with what SAP could do. It was a
really difficult time because I had no control over anything - it
was all carried out at the group's head office which, for me, was a
total nightmare."
At that time, the company was already familiar with Access as it
had previously used the accounts system. So, once the company knew
that its owners were looking to sell, the site returned to Access
and installed its Access Supply Chain suite. "We knew we would need
a working platform on which to move forward," says Nigel.
A winning solution
And it has proved to be a winner. From its new site, which
offers double the capacity of the previous plant, LycoRed is now
anticipating a surge in sales. With flexibility and agility
provided by the supporting systems, the business can pursue its
goals of growing the existing base as well as expanding into new
areas. "We're negotiating with customers, particularly those who
re-order mixes, to make larger batch runs which we can either hold
for call-off, or deliver," says Nigel. This has been made possible
by the increased capacity: previously, a 2,000 litre mixer was the
largest used, but now it's a 5,000 litre version.
"Running a business is all about having the right
information at the right time. Access provides us with just that."
Nigel Nash
Company Secretary and Financial Controller
Apart from easing the move to new premises, Access has been an
important step in securing the company's future. "We can react so
much quicker than many of our larger competitors," says Nigel.
"They are such big organisations with so many product lines. We
have limited product lines, but can respond quicker and cut lead
times." Indeed, the lead time averages are between two and three
weeks - elsewhere, it is five or six weeks. For LycoRed, its
success has been built on combining a quality product with speed of
response.
Developing the right mix
Research and development plays a vital role. New recipes, or
mixes, are developed and tested every day. Once a customer request
is received, LycoRed's technical team moves into action and works
on achieving the right mix. "We are continuously working on new
recipes," says Nigel. "And for every dozen or so requests that we
work on, only one may go into final production." This could be a
result of particle size, taste, and so on. "There are so many
variables that we have to consider before we reach an acceptable
end product."
Access has been a key enabler for R&D. "Before, we had a
formulation database which was a standalone system," explains
Nigel. "We used to take our recipes and label them with information
from that system and physically key it in, which took about half an
hour. But in the past two years, we've worked with the database
supplier and with Access to create an automatic link between the
two." So, once the customer gives the go ahead, the authorised
recipe can be downloaded at the push of a button. "The information
includes label requirements, pack sizes, ingredients, the
percentage per kilo of production - it's all there and ready to
roll."The savings amount to more than just time, "We'd have to do
this ten times a week, so that's 300 minutes a week we've saved,"
says Nigel, "but we've also eliminated the errors from manual
keying. The benefits of speed and accuracy were
immediate."
A perfect blend
For the day-to-day business, Access has also led to dramatic
improvements. Nigel describes the process, "When an order comes in,
it goes straight to customer service where it is entered on the
system. This gives the planner a prompt that a new order has been
entered: he checks when it can be produced and confirms if that
matches the date requested by the customer, which it is in most
cases."
Interestingly, LycoRed has chosen to blend the IT capability
with human expertise to give the best result. The planner still has
the opportunity to exercise his skill and experience: there is no
scheduling software. And its on-time in full (OTIF) delivery is
currently 95 per cent, a huge improvement.
Nigel has also regained the control and visibility that was
lacking before. "Debtor days went through the roof when credit
control responsibility lay with head office. It's now halved to
less than 60 days."
Elsewhere, visibility is boosting efficiency, too. "To check
shelf life, we run monthly reports on expiry dates and run
auto-allocation of materials. We used to have a manual system to
decide which batch of material to use next. Now, it works
automatically."
Future developments
And what of the future? While response time and ability to react
have been so important for LycoRed's success, Nigel says the
business is looking to develop and to proactively market to its
customers. He meets Access on an annual basis to work with them on
extending the scope of the system to help drive the business
forward. "I've always got something I want to develop; I never want
to slip behind."
He also actively consults key customers on development plans and
one example of this supplier/customer consultation process
delivering benefit is with barcoding, which will be implemented
later this year.
Traceability is vital in this sector and barcoding will speed up
the process and give better access to data. But not content with
implementing a system for its own needs, LycoRed is looking for
customer input. "We're working in conjunction with customers to see
what requirements they have for coding on finished products: it's
not enough to solve our own issues, we have to satisfy customer
needs. We may be a manufacturer, but service is what our business
is built on," says Nigel.
"We're also working with one customer to develop infant formula;
this will be a major step for us," he says. This is only possible
because the new Aylesford facility was built to pharmaceutical
standards. The customer in question even helped out with advice on
the design of the building so that it could achieve the high
standards required.
"We are expecting turnover to double in the next three to four
years to £20 million," reports Nigel. "Running a business is
all about having the right information at the
right time. Access provides us with just that."
Choosing an ERP system from the wide range on offer can be a daunting task. Confronted with lots of conflicting advice about what's right, you want to be sure that your new system fits both your business and your budget. This guide, the first of two parts, will help you make informed choices during the first steps of the process.
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