16 Oct Wow Nutrition Optimizes Setup and Reduces Stock Costs with Simatic IT Preactor APS
WOW Nutrition is a company operating in the consumer goods area with a focus on healthy food and drink products (Beverage, Diet and Light and Infant Nutrition products). With a pioneering and innovative strategy, the company began operations in 1999 in Brazil with the launch of Caferazzi, the first ready-to- drink cappuccino. Additionally, an important organizational innovation was the concept of creating “ready-to-drink green tea,” currently participating as a market-leading brand in its category. The company is the result of the union between WOW, specialized on the healthy drinks segment, and Gold Nutrition, one of the largest industries in sweeteners on the domestic market. Both companies merged in forming WOW Nutrition, a market leader and benchmark in the beverage and health food market.
The company has the largest and most modern soft drinks Industrial Park in Latin America, located in the city of Caçapava, São Paulo, counting with over 1,100 employees. WOW Nutrition is also the first facility in its segment to obtain the HACCP, certification regarding the quality and hygiene with standard classification in food, created by NASA (National Aeronautics and Space Administration), which is responsible for management system certification aimed at safety on food industries.
For WOW Nutrition, the main challenges were to improve service levels and to give the ability to generate scenarios to help decision-making in the planning stage. The beverage segment misses the accurate visions of cyclical demand expected for the commercial area, supported by a demand forecasting solution with the plant capacity management. The manufacturing capacity for planning is driven by the filling lines dedicated to each type of packaging. The cyclical demand of the juice consumption in peak season requires a high percentage of the maximum capacity to be used during this period, while using further lower levels of the filling lines.
Besides the change of use of the lines, inventories of raw materials and finished products have great impact on the business scenario, since the same product can consume material from different sources depending on the offer of suppliers, thus generating a complexity in controlling manufacturing raw materials usage. Finished products with short life, close to its expiration date, have negotiation apart from other products in inventory, also generating more complexity on these stocks control.
After finishing material needs planning, the manufacturing sequencing requires a daily manual creation of work orders in the ERP from the planning department, to be released to shop floor leaders. Another challenge was to examine constraints like the use of pulp drums and the capacity of the mixing room, in the case of products that use soy. The huge number of combinations regarding pasteurizers and filling lines caused an impossible task for the system to allocate jobs on the resources in order to aim for the most optimal option.
SIMATIC IT Preactor APS was the tool chosen to meet WOW Nutrition’s needs, after an assessment comparing to three other systems, since the company realized the system is the one that suits best their process. ACCERA was chosen as a partner to implement Preactor after some benchmarking technical visits to existing customers who were using Preactor, along with the presentation of a prototype configuration.
Based on the challenging scenario faced by WOW Nutrition, the project team developed a new planning and scheduling workflow to handle over 100 SKUs managed on the master plan. The new process would include SIMATIC IT Preactor AP (Advanced Planning) configuration, ERP improvements and a SIMATIC IT Preactor AS (Advanced Scheduling) configuration. The new operating design is the outcome of discussion among the consulting team from ACCERA, the WOW Nutrition team and ERP consultants.
At the planning stage, with aid of the SIMATIC IT Preactor AP configuration, the user has the demand forecast made by the company’s commercial department. By simulating scenarios, the correct demand distribution allows the company to recommend shutting down idle filling lines in order to reduce direct costs, since they are leased (outsourced). Stock policies were defined aiming for inventory reduction, ensuring demand service with products within shelf life. An expiration date report assists the control of all available stock, rendering SIT Preactor AP as an important tool to reach quality standards and reduce waste.
The scenarios made in SIT Preactor AP are taken to the operations planning stage of S&OP (Sales & Operations Planning). All managers and senior board of Directors of WOW Nutrition gather and compare alternatives. The selected scenario and other decisions about capacity and inventories are exported to the ERP constrained operations plan set. Production needs and BoM to be applied for each product are defined in ERP. The SIT Preactor AP configuration is also responsible for the Bill Of Materials “explosion”, adding the role of MRP to the module, improving results even further.
The SIMATIC IT Preactor AS configuration starts its cycle by the importing bill of materials (BoM) and work orders generated by the ERP. When running the sequencing of tasks formulation and packaging, some combinations must be respected and others must not take place, and this is achieved through secondary constraints enabled in SIT Preactor AS. According to the BoM of each work order, the use of pulp drums can vary and is controlled by a secondary constraint, while pulp drums are modelled as capacity per hour. Another great feature applied to the system is scheduling packaging lines combined in which occurs the filling of the same SKU simultaneously treated by Preactor as a single resource, but with twice the efficiency in its calendar. The main rule used in the sequencing aims the setup reduction, since setup times must vary from a simple rinse to a heavier cleaning known in food and beverage market as CIP (Clean in Place).
With a finished schedule and selected orders already firmed, these orders are exported to ERP and then they become available to the shop floor. The new schedule is presented through customized report developed for WOW Nutrition. Automation of this process significantly reduces the amount of hours spent with the daily task of manual orders creation. The pulp report developed by ACCERA helps defrosting operation of drums pulp to the formulation, thereby reducing the losses of material and synchronizing this activity with the production lines.
Supported by a robust Project Management Plan, with schedule, actions and responsibilities clearly defined, along with the application of conceptual training for leveling and training focused on SIMATIC IT Preactor AP and AS configurations, the project was delivered ahead of schedule. The ACCERA team, in collaboration with WOW Nutrition and all other parties, advanced The Go Live of the SIT Preactor AP configuration by two weeks, yielding results before the completion of the SIT Preactor AS configuration. Both systems were fully deployed in August 2015, one week earlier than originally planned.
The return on investment to WOW Nutrition was achieved in 6 months post-implementation and the success of the project is expected to be continued with the expansion of the solution to the Diet & Light and Infant Nutrition segment. The partnership also provided the acquisition of another solution for visibility of the supply chain and retail market developed by ACCERA, turning Preactor in a key player in the business relationship.