CASE STUDY - Traditional dairy co-operative uses technology to open up local and global markets

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When it comes to buying food, quality and provenance are now high on the consumer agenda so demand for regional produce has never been greater. According to Food From Britain, 74 per cent of consumers want to support UK farmers and producers by buying regional food and drink.

Isle of Man Creamery Ltd - a co-operative of 51 dairy farmers dedicated to producing quality milk-based products that reflect the culinary heritage of the island - is one company that has managed to transform its business model from a distinctly local dairy producer, into an international supplier to leading global retailers, UK supermarkets such as Morrisons, Tesco, ASDA and Sainsbury's, and local Isle of Man customers such as Shoprite, Tesco, Marks & Spencer, CWS (Co-op) and CI Newsagents. At the same time, Isle of Man Creamery continues to pride itself on sourcing quality local dairy produce and provides every one of its Manx customers with a personal doorstep delivery service, free of charge.
 
Farmers and dairy producers have experienced spiralling costs due to more expensive animal feeds, yet Isle of Man Creamery has managed to grow the company without expanding its workforce. Solarsofts TROPOS ERP has made this easier within the doorstep delivery system, and will help to move the business forward even further as supply-chain visibility aspects are implemented.

Traditional company takes local produce to international market
Today's consumers want to know where their food comes from, which is why major supermarkets sell more local or regional products. Isle of Man Creamery Ltd is one such regional success story: it has managed to maintain its local roots - guaranteeing 100 per cent transparency, as all its dairy products can be traced back to the co-operative of 51 farmers that make up the organisation - but also sells its products to leading retailers worldwide.

Established in 1934, Isle of Man Creamery has become one of the UK's leading dairy producers with an annual turnover of 14 million and growing. It maintains its local service, delivering a range of products milk, cheese, cream and butter to doorsteps and to retail customers all over the Isle of Man. Major UK and international retailers, including UK multiples Morrisons, Tesco, Sainsbury's and ASDA rank among the Creamery's customers and its distinctive, award-winning Manx Mature Cheddar cheeses can also be found abroad in Ireland, Spain, Denmark, Malta, UAE, Canada and, most recently, the United States of America.

Expanding customer base demands flexible and unified IT platform
As the company grew, the management team recognised an urgent need to review the company's IT systems. These were predominantly spreadsheet-based and very fragmented, which caused a lot of administrative inefficiencies. The same information was being inputted by three or even four people, leading to discrepancies and errors.

Lack of instant traceability was one of the main downfalls with the spreadsheet system, and this was a major issue as the Creamery was targeting the American market, which has particularly stringent regulations. It needed a system that could trace any product right the way back to the particular farmer it came from and with the old system this was a time consuming exercise.

Stephen Keeley, FD at Isle of Man Creamery takes up the story: "One of the main issues we wanted to address was how to manage an increase in sales without increasing the workforce. Recently, there's been a sharp rise in costs for dairy farmers - especially for animal feeds - so we have to be extra mindful of our outgoings."

"Added to this, in 2007 we acquired a new customer base which enlarged our doorstep deliveries by 50 per cent. We wanted to manage these new customers through a streamlined system that would give us up-to-the-minute information from each department including sales orders, production, purchasing, warehousing, distribution and invoicing. This could only be achieved through a single, unified system that would deliver complete transparency over all elements of the business," Stephen Keeley continued. 

As the Creamery's new customer base went live so did Solarsoft's TROPOS ERP solution. Solarsoft is implementing the core supply-chain system plus additional modules specifically designed to support Isle of Man Creamery's very specific business needs.

Specialist industry modules produce significant cost savings

Solarsoft's tailored modules have helped Isle of Man Creamery address the business challenges that a dairy processor faces. A key part of the reporting system at the Creamery involves the farmers' co-operative milk production. "Every part of the supply-chain process from the time that the milk reaches the Creamery will be able to be accessed very quickly. TROPOS will enable us to look on a single system that can tell exactly how, when, where and what milk has been moved and by who - so the entire process becomes fully traceable. Reports can be rapidly produced, which will help us to identify problem areas within the shortest timeframe possible, limiting any financial or, more importantly, customer loss," explained Stephen Keeley.

TROPOS will help Isle of Man Creamery Ltd to reduce its product waste by pinpointing where exactly the milk is being lost - be it through the tankers or pipes. Around one per cent of the milk purchased from farmers disappears and this equates to a loss of up to 350,000 litres of milk and around 80,000 every year. TROPOS will ensure that managers can identify not only where the losses are taking place but how much is disappearing from each area.

The Role-Based Applications (RBA) feature gives tight control over Isle of Man Creamery's rounds-based sales, allowing managers to:

  • Maintain standing delivery schedules
  • Set up a customer holiday calendar
  • Manage deliveries by exception
  • Record additional sales post-delivery
  • Reconcile vehicle stocks
  • Record cash collection

Stephen Keeley continues: "The RBA feature of TROPOS is perfect for us, especially as the doorstep delivery service is a key growth area. More and more consumers now want to have their milk delivered again. They want to know where their food comes from, that it is good quality, and they want to support British farmers. One of the main reasons we decided to implement TROPOS over any other solution was because the system is scaled to cope with any customer base regardless of how fast it grows, or where it's based."

And, as a best-of-breed solution, TROPOS ERP has been integrated with CODA-Financials. For the first time, the Creamery can now access accounts on the same system as everything else - so they are always real-time. With more customers, the number of financial reports the company needs to produce has increased, and they have also become more complex with online purchases and standing orders from individuals as well as huge retail outlets. However, TROPOS has taken away additional work and ensures customers are able to choose between setting up continuous weekly or even daily orders.

Over 70 per cent of Isle of Man Creamery's products are now exported
Around 70 per cent of Isle of Man Creamerys products are currently exported from the Isle of Man and because TROPOS is a powerful and flexible solution, the company can confidently compete in an industry that is dominated by much larger corporations. Flexibility ensures that multi-billion pound supermarkets receive their required produce but also that locals receive their daily or weekly order to their doorstep regardless of where they are, what they ordered and how they pay.

Isle of Man Creamery Ltd will have a streamlined business process from milk collection right the way through to payment collection, and it will all be fully traceable on a single system. Orders will be dealt with as soon as they come in - over the phone or via the internet - because every staff member will access a real-time production schedule, which tells them exactly what stock they've got in.

From local to global - the importance of a robust and flexible IT platform
At a time when many farmers and dairy producers are going out of business because of the rising price of animal feeds, Isle of Man Creamery has achieved rapid growth and penetrated new global markets, all without the added financial burden of taking on extra admin staff. 

With Solarsoft's TROPOS solution, the Creamery has a strong platform to move the business forward, especially into new global markets. It has plans in the near future to update the system in phases with 'Warehouse Management' followed by 'Production Line'.

"We pride ourselves on being a traditional regional creamery with a personal touch. Whereas many milk delivery companies have been phased out across the British Isles, our customer base is getting bigger and our delivery service is booming. Our consistency of service is what achieves customer loyalty so we're implementing TROPOS across the entire Creamery to ensure high standards are met through a system that will grow at the same pace we do," concluded Stephen Keeley.

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