Snack Brands Australia, one of Australia’s largest suppliers of snack foods, reached a point where traditional planning tools didn’t have the capacity to manage its production. After all, its output had increased from 15 million packets per year in 1996, to more than 200 million today.
And with its $222 million Orchard Hills manufacturing site in Sydney – a project classified as a State Significant Development – there’s no sign of any slowdown.
It was back in 2014 when Snack Brands was starting to feel the squeeze, as the existing spreadsheet-based planning approach was showing its limitations. Planning was too time-consuming and didn’t offer any real decision-making support.
Dealing with new product introductions, frequent updates to flavours and packaging, and regular product deletions were constant challenges. Additionally, short order lead times, often around 48 hours, added significant pressure to their operations.
Snack Brands planning manager, David Colburt, said that originally the company had wanted a rough-cut capacity planner that would provide a medium-term view on production loads and key raw material requirements.
“We needed a way to balance the factory load and increase our operational efficiency, including a reduction in overtime.
One of the keys to our production is the synchronisation of the packaging machines with the fryers. These critical resources are shared across multiple product groups, and packaging must be available to draw from the fryers as product becomes available,” Colburt said.
For Snack Brands, demand is heavily impacted by short SKU lifecycles, seasonality, and shutdown periods. Some of its brands are Thins potato chips, CC’s, Kettle chips, The Natural Chip Co., and Cheezels.
“We quickly understood that we needed a solution that went beyond the capabilities of a traditional planning tool. Our ERP application partner suggested RELEX as a potential supplier.
“Their Supply Chain Optimizer offered the right depth of capabilities, with the benefit of an already available interface to our Microsoft Dynamics AX system. That’s really how it all started,” Colburt said.
A pilot project was run for one of the fryers, with the team investing considerable time to understand how to utilise the system effectively.
This effort was deemed essential. There had to be a thorough understanding of each manufacturing operating systems’ workings and interrelations so they could be accurately defined in the ERP system and then drive the RELEX solution effectively.
It was the most challenging part of the project but also pivotal. The process unlocked unlimited possibilities for developing planning scenarios and viewing production from entirely new perspectives.
“It took us quite a bit of time to understand how to drive the system to get the outputs we needed. But this was always going to be time well spent,” he said.
From the start of the pilot to the go-live, the whole process took one year.
Colburt said things the team likes about the system is how intuitive it is and its speed at optimising plans and scenarios, which is “invaluable”.
“It’s a real decision-support tool. It is so fundamentally different from our old Excel approach. We’ve been able to reduce the number of SKUs we run each week for the Kettle brand from around 40, down to about 15. This is a huge saving, as we require far fewer changeovers than before. RELEX makes sure we run all products in a group at the same time to ensure maximum efficiency,” he said.
The software also optimises production around shutdowns and planned maintenance to ensure the right amount of stock is built to service customers while these essential works take place.
It is a fundamental shift from the company’s previous reliance on spreadsheet-based approaches, offering a more advanced and efficient solution for planning and analysis.
But Colburt provides a warning. “There are no shortcuts when it comes to the data. You need a very thorough understanding of your own capability and how to represent that in the system.
“Don’t expect the output to be 100 per cent valid out-of-the-box. There will be a need for someone to review the outputs to validate the solutions.
“If one parameter is out on a product, it can cause issues, so be careful. But don’t let that put you off. The benefits of the Supply Chain Optimizer are immense, and as you start working with the solution, you will continuously refine any settings and the model will become more and more accurate,” he said.
Today, RELEX provides up-to-date, optimised production plans every week, covering two factories and 12 separate resource operations. Snack Brands uses RELEX to sequence like products, and other products that use the same equipment.
Plan generation times have been cut in half and alternative scenarios can now be generated to support various business decisions.
It has given Snack Brands the tool to optimise production based on total cost to the business and helped the company strike a better balance between supply and demand. This change has led to significant savings by reducing the number of required changeovers, and maximising efficiency in the production process.
