Sanitarium transforms 'Post-it note' supply chain

It's top marks to technology, nil for paper, at a long-established health food company on NSW's Central Coast about 80 kms north of Sydney.

A wireless network at its main manufacturing and distribution centre let Sanitarium Australia deploy a new RF-based supply chain solution that ousted its good old Post-it notes system.

IT business project manager Alan Myers at Sanitarium, which produces Weet-Bix, Marmite and more, said the SCM project was the most challenging he has tackled to date, because it was in production at the same time as building extensions to the warehouse were under way.

While half the project involved the implementation of SAP warehouse management with RF scanners, Myers said the rest of the time was dedicated to developing warehouse processes after discovering there were none in place.

"The change management was as big as the technology," Myers told delegates at a wireless summit in Sydney last week.

Some of the company's sites had no Ethernet or wireless infrastructure, and "only two people with computers".

Myers said the stock was being managed with Post-it notes with messages like "use this last", because few of the staff used computers.

The solution was delivered by Hewlett-Packard and the wireless infrastructure consists of Cisco access points since Sanitarium had a "positive" experience with those suppliers for its wired network. VoIP and wireless telephony is also being deployed.

Myers, a strong believer that IT is a "tool to help the business", said the "middle bit" was "simple" as SAP has a standard console and the licensing model "suited our budget".

"It has a telnet client and the application only had text and colour; the graphics added no value because they were harder to see than mono in poor lighting," he said.

The Symbol MC9060 terminal was chosen for mobile scanning, because it met the business and key IT requirements for operating temperature, wireless range, battery life, and scanner range.

"When I spoke with one vendor for that job, its response was 'do you want me to drive up to the Central Coast?' And 25 handsets is not a small sale," he said.

Skywire was contracted to supply, configure, and integrate the solution.

When it comes to integration work, Myers says, make sure it's "someone you are comfortable working with; if not, don't bother".

Wavelink's Avalanche was used for centralized device management.

"For anyone involved in a supply chain, it's about delivery in full, on time," Myers said. "We have increased the accuracy of stock levels and picks, and reduced time to double check. There are fewer 'crisis' activities [and a] significant reduction in short-dated stock."

Myers said problems can now be detected on arrival at the warehouse, which is better than when it's too late to fix it.

Another positive outcome of the SCM project is that it will remove the need for an annual stock take as "we no longer have the need to determine what's missing and problems are all dealt with straight away".

On the backend, SAP is running on a Windows 2003 server and authentication is done with Funk Software.

"The first day was an anticlimax - everything worked, no delays, no crises," Myers said. "Barcode scanning has delivered best-ever inventory accuracy. Five casuals started one and had never used RF terminals and were working unaided the next."

Myers' secret to the success of an IT project is finding out what business needs and applying IT to it.

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More about CiscoFunk SoftwareHewlett-Packard AustraliaSanitariumSAP AustraliaSkyWire (Australia)Wavelink Communications

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