Moving Legacy Supply Chain Management Processes into the Modern Age with Qlik
A company’s history can have a massive impact on its future success. With a company legacy dating back to 1868, Brüggen has its own unique traditions, processes, relationships, and technologies. Our company employs 2,000 people to produce over 200,000 tons of breakfast cereals last year—2,500 products to be exact. We’re also a very successful business, generating $375 million in revenue each year.
But historic, long-term success doesn’t guarantee anything for the future. You have to constantly look for new ways to improve on the strategies that made you successful in order to keep your company moving forward.
In a small town in northern Germany, our company founders got their start by constructing a buckwheat mill. Over time, as the company grew, so too did their supply chain and facilities and the company moved to Lübeck. Despite all these changes, one thing remained the same: the company continued to be owned by the same family that founded it. Even all these generations later, Brüggen is still owned by that same family.
By 1989, we relocated to a newer, bigger production facility in Luebeck. Despite years of growth, the company established two new factories in Poland (2001) and France (2008). And in 2015 Brüggen America was founded, which allowed the next generation of owners to take the company international. While the vast majority of our customer base is still concentrated within European countries, we also export our products to North and South America, Africa, and Asia.
In November 2007, when I joined Brüggen, it was the first time ever that the company had a head of supply chain management. It was clear to me that process only flows as well as knowledge, and the supply chain management processes of the past had not kept pace with the company’s rapid growth. It was time for a change.
Already in 1999 SAP-R/3 was implemented within the company. But through the enormous growth of the company the system was not used in a proper way.
We wanted to reorganize our systems and processes, and we wanted to exploit the potential benefits that lie in a targeted and structured usage of SAP.
After the re-organisation of the ERP-processes some questions remained:
- How good is the performance of our information and workflows?
- What do we have to measure, and how?
- Which tool would meet our BI needs?
Our existing SAP-BW system was not our desired solution (too complex, poor frontend).
Clarifying Priorities: Establishing Radical Transparency in Our Supply Chain Processes
We decided to search for a new business intelligence (BI) solution to help grow and connect our business.
In 2015, we sought to answer our own questions. We started by looking at forecasting—specifically, our accuracy when it came to demand-planning. We needed a tool that would provide forecasting accuracy, a critical need for our advanced management that would also help us deliver an excellent service level to our customers.
The next step was to find a tool that would also help us to optimize our material requirement planning. This would allow us to accurately review our inventory stock, which would also help us minimize waste, measure base inventory, and optimize our stock structure.
Furthermore, we needed a tool that would help us manage logistics on the supplier side, as our purchasing departments have to buy the raw ingredients, packaging materials, and more, while also measuring our suppliers’ service level. Our purchasing departments are more interested in the costs of items purchased, while the supply chain side is focused on the reliability of our suppliers and their ability to deliver on time.
These are all vital factors in ensuring that our company maintains its competitive edge in this modern era. These are supply chain key performance indicators (KPIs) that touch all areas of the business and must be measured accurately, regularly, and reliably. You could measure more than 100 logistics KPIs at a time, but you need to know what the most important logistics KPIs are, so you can take action in a timely fashion. At the time, it was incredibly challenging to start from the scratch. So we needed a tool that would help us create radical transparency in the process.
Seeing the Forest for the Trees: Experiencing the Difference Qlik Makes
We knew right away that Qlik was a great fit for our needs. Firstly, we wanted to visualize the data in a way that would help our people make good decisions quickly. In the past, the SAP system displayed long lists that were visually unappealing and cumbersome. We needed succinct, clear, engaging visualizations so we could see the forest for the trees. We didn’t want to have to hunt for the information; we wanted it to be easily searchable so we could find what we needed when we needed it, without requiring assistance from our IT department.
Qlik also provided us with a solution that offered dynamic reporting and ad-hoc analysis. But we knew every single user didn’t require interactive access. That’s why we also wanted to automate the sending of reports to simplify and streamline the process. This way, we could keep specific parties informed through a weekly or daily report automatically sent via email. We were also able to connect to different data sources; our main data source is, of course, SAP, but we also wanted to remain open.
Qlik allowed us to explore and implement all of these options, which is why its solutions were the best fit for our company. At the end of the day, we chose Qlik because it’s faster, cheaper, and better—everything needed to ensure our legacy company continues to keep pace in the modern age.
The Inventory Optimisation Cockpit: Transforming Our Supply Chain Management
Since rolling out Qlik, we’ve been able to implement several changes. The first area where we’ve seen terrific ROI is in a dashboard that allows us to manage raw-material requirements at our different plants. Let’s say the German plant is running low on cashews. In the past, without insight into other plants, they would buy more cashews from our suppliers. But what if the Poland plant had a surplus of cashews? For Poland, they’d normally dispose of this excess if it was no longer needed.
However, if we could transfer those cashews from Poland to Germany, that would save on waste and cut the cost of buying from our supplier. With this dashboard, we’ve already seen savings of €200,000 by not needing to buy from external suppliers.
Through Qlik’s various dashboards, we’ve also created what we call an inventory optimisation cockpit, which is a compilation of four KPIs: stock coverages, inventory rate, blocked/total stock value, and wastage/goods receipt value (internal and external).
This data cockpit gives us real insights into our supply chain, identifying problem areas that need immediate attention, highlighting areas for growth and optimisation, and areas where we are excelling and should either maintain or build on their successes.
All of these four KPIs give us a holistic picture of the organization’s overall business health. We can see the absolute figures and percentages, and compare them between our four plants. Using Qlik’s dashboards to create an inventory optimisation cockpit has allowed our company to set benchmarking for the first time ever.
From Handshake Deals to Data-Driven Insights
From the beginning of our inventory optimisation initiative, we had three different goals: to establish an excellent service level, to maintain only necessary inventory, and to create efficient production. While it’s not possible to achieve all three goals at the same time, implementing Qlik gave us the technology and business insights we needed to institute transparency within our strategies and processes.
In the past, our family founders relied on handshake deals to build relationships and establish agreements. Now, as our company expands our global customer base, we rely much more heavily on data-driven decisions to not only build relationships.
For example, our purchasing department has secured contracts for raw-materials in areas like Philippines. The logistics for shipping these products across the world requires considering more factors then pricing. The sharp increase in operational complexity means that we have much less flexibility than in former times by buying from European countries.
With the insights we can now see from Qlik, we’re in a better position to analyze and mitigate these complexities. Leading an old company into a new age of commerce can seem daunting without the right tools in place. But with Qlik providing the insights we need, Brüggen is not only able to keep pace with our competition, but we’re able to allocate on the right products and production capacities so that we can expand into new markets our founders 150 years ago could only dream about. With a proud heritage as our foundation, the world of cereal continues to grow from our humble beginnings in Germany to across the globe and into the future.