Executive Briefings

Naturally Fresh Dresses Its Supply Chain With New Capabilities

Rapid growth, Y2K issues and the need to better control and trace inventory all led salad dressing manufacturer Naturally Fresh to implement an enterprise system that included robust supply-chain capabilities.

Naturally Fresh is one of the most ubiquitous brands in the fresh foods industry. Whether during commercial travel, at a restaurant, or having dinner at home, nearly everyone has tried a sauce or salad dressing from this Atlanta-based company, formerly known as Eastern Foods.

In addition to being the leading supplier of salad dressings to airlines, Amtrak and cruise ships, Naturally Fresh serves thousands of restaurants, institutional food providers and national grocery chains. Thirty-three million portions of its products are dished up monthly, delivered via 28 distribution centers around the country as well as by wholesalers and channel partners worldwide.

Of course, the company didn't start out with this kind of scope. In 1966, Eastern Foods opened with a $10,000 investment, a handful of employees and a 4,000-square-foot warehouse. Its only product was a refrigerated, vegetable-based coffee creamer that it provided to airlines flying out of Atlanta's Hartsfield Airport - before the "International" was added to that facility's name. Steadily, the privately held company expanded. It entered the specialty goods market in the 1970s, then in the 1980s moved into retail - supermarkets and restaurants - with its Naturally Fresh line of products. Later the company added bar mixes and steak sauces to its product line. Today, Naturally Fresh operates from a 250,000-square-foot facility in Atlanta, produces more than 300 recipes, each packaged in a multitude of sizes, and has annual sales approaching $100m.

"The company has experienced consistent 10 percent to 25 percent growth a year," says Joe Stell, director of information systems at Naturally Fresh. In order to better manage this growth - and to ensure that it would encounter no Y2K problems - the company decided in the late 1990s that it was time to upgrade its existing legacy system.

"Not only were our sales growing, but our product line was growing as well," Stell says. "When we say we have 300 different products, that doesn't take into account all the different packaging. For instance, Ranch dressing is Ranch dressing, as a bulk product, but we package it in gallon containers for restaurants and in 16-ounce jars that you see in grocery stores as well as in four-ounce individual services, the little pillow packs that you get at the salad bar and even the small cups that are used on airlines. There may be 10 different pack sizes for one product." This adds a lot of complexity to the manufacturing side as well as to forecasting. "We needed much more detailed information and a lot more visibility than we had in our legacy system," Stell says.

Limited Shelf Life
The need for effective inventory control is exacerbated by the perishability of Naturally Fresh products, which - not surprisingly - are made with all natural ingredients and no preservatives. Most product must be refrigerated and shelf life is limited, with every product carrying an expiry date. "If something gets to within 30 days of that expiration date, stores really can't sell it, even though it is still good," says Stell. The maximum lifetime of a product is 180 days. "That may sound like a long time, but it really is a relatively short window for manufacturing a product, packaging it, warehousing it and getting it through distribution channels to the ultimate consumer. So we have to manage our inventory very well and have it go out as quickly as possible after it is made."

After considering five enterprise resource management products to replace its legacy system, Naturally Fresh decided on Ross Systems, Atlanta, which specializes in enterprise applications for process industries. "We saw that we would have much more detailed information available to us with Ross," says Stell. In addition, Ross demonstrated "a whole multitude of critical criteria, from ease of implementation to functionality specific to food manufacturers - the whole nine yards," Stell says.

Implementation of the Ross iRenaissance system was completed in August 1999, four months ahead of any Y2K issues. Today, iRenaissance handles all of Naturally Fresh's processes and transactions. On any given day, says Stell, the company knows "with much greater certainty" what needs to be made and in what volume. "I don't say make to order, because we don't do that, but product is made as it is needed," he says. Naturally Fresh says it also knows where each finished product is located - down to the last ounce - anywhere in the world. That's a lot of product. The company packages more than 3,000 units every minute, totaling more than 25,000 gallons a day.

"Before, we were able to know what we did yesterday," Stell says. "Everything was batch processing - we entered all our work in today and then overnight we ran reports that told us what happened." As the business grew, working with day-old information "simply became unacceptable," he says. "Now, we have a real-time system that gives us a much better view of not only what we manufactured and filled yesterday, but what I am going to need to manufacture and fill tomorrow." This information is continually updated, he adds. "I can run a sales report now, and when I look at it again in five minutes it will have changed."

"One of the important things about our product is that it is built on an internet technology foundation," says Eric Musser, CTO of Ross Systems. This means that all of the execution applications are available via a browser-based interface, using XML and web services connectivity standards. This enables connections to be established and maintained with minimal overhead, Musser says, and the need for expensive and maintenance-intensive middleware is eliminated.

Automatic Reports
Having inventory and other information available in useable, automatic reports was important to Naturally Fresh and it spent time getting it right. "Reporting was a big deal for us, and it took a while to customize the software to get it to do what we wanted and to integrate information that management needed from some other applications, such as demand planning - things that our legacy system could not do," Stell said.

The company currently is looking at making all of its internal reports web based, which iRenaissance also can enable.

The fulfillment process begins for Naturally Fresh when its 28 branches, or distribution centers, place orders with the plant, based on orders they have received from individual customers. "Now, we actually have visibility to three important pieces of data," Stell says. "We know what the branches are requesting based on orders and inventory on hand, we can see what we had forecast and we know what customers have actually ordered. We combine all that information to determine how to modify our production schedule," so that supply more accurately matches demand. Often, there is a little more collaboration involved, Stell adds, particularly on the retail side. "If a store like Kroger is doing a big promotion, particularly if it is a BOGO [buy one, get one free], which can increase sales by 25 percent to 30 percent, we need to know about that as early as possible. If we are not ready for it, we're going to short them, so it takes a lot of collaboration between us and customers and with our sales people to make sure that the peaks and valleys are communicated back to the plant."

Personal Interaction
The company uses its systems to enable some of that collaboration, but for the majority, "you still can't beat the telephone or e-mail," says Stell. "The reason I say that is because I believe you really have to interact with a person." Stell notes that the company's branches and field staff have very close relationships with customers, "so much so that if a customer fails to call an order in one week, the sales person will pick up the phone and say, 'Hey, where is your order?'"

With better visibility to actual demand, Naturally Fresh is able to schedule more efficient production runs and significantly reduce changeovers. "Typically, we manufacture several vats at a time - these are huge tanks that can be 10 or 15 feet tall and about 10 feet in diameter," says Stell. The product in these vats feeds the production line, where it is put in various size containers. "Every time we make a change from one line to the other we lose product and time," says Stell. "Now, instead of running 10 different products each day - stopping the Ranch midstream to switch to, say, Blue Cheese and then going into an oil and vinegar dressing - we actually are able to run the Ranch all day long, then do Blue Cheese and so on. This is because we have better visibility to what we need to produce." The company has decreased the number of separate production runs by 20 percent to 25 percent, Stell says, which means that the same amount of goods can be produced with fewer workers.

Currently the company is achieving an extremely high fill rate on customer deliveries, Stell says. "I look at that about once a week. Every once in a while we drop below 99 percent at one or two branches, but that is rare. Most of the time it is 100 percent," he says.

The actual movement of product is well in hand since Naturally Fresh has its own fleet of refrigerated trucks that make set runs to its 28 branches. "For example, we have trucks that run from Atlanta to Seattle and back, or trucks that run from Atlanta to Houston to Dallas and back," Stell says. "The runs are very static and very predictable. They are loaded at the same time each day and depart on the same days of each week and everything follows a very tight schedule." On a smaller scale, the same holds true on deliveries from the branch DCs to individual customers. "Most restaurants or retailers want two to three deliveries a week," Stell says. "They don't want to maintain an inventory, so we will warehouse it for them. So every day the first run of the morning will be these 15 stops, then you go back and load up again and go to the next 15 stops. That happens, with those stops, the same days every week." Because of this predictability - and because of Naturally Fresh's already high performance - the company elected not to implement the transportation management system in the Ross iRenaissance suite. "The transport situation has really worked very well for us," Stell says, who notes that the Naturally Fresh fleet often is able to pick up raw materials on the return trip to Atlanta. Naturally Fresh purchases and processes more than 300 tons of fresh vegetables a year as well as prodigious amounts of oil, vinegar, butter, cheese and other base ingredients. "We didn't use the transportation part of the software only because there was no need to fix something that was already working," he says.

Another critical functionality that is being enabled by the Ross system is lot traceability. "This is a major concern in the food industry," says Stell. "We have to know every product that a given raw material goes into." For example, he says, butter is one of the materials that Naturally Fresh uses in large quantities. "Let's say we find out that a block of butter was contaminated," he says. "We actually know every product that was made using that block. We know where it went, which job it went into, which cases it was packed in and where those cases were delivered. This is a functional aspect of the software that was really critical to us."

That is not because recall situations occur frequently, but when they do occur fast, accurate information is imperative. To maintain its edge in this area, Naturally Fresh regularly runs "fire drills" to test its tracing capability. "Somebody from Quality Control will come down and pick a raw material - they may choose something like honey that comes in these big totes - and they will say, 'This particular 3,000-pound tote of honey was bad. I want you to identify all of the product that it went into.'"

Often there are secondary products along the way, Stell explains. Oil and eggs, for example, are combined to make mayonnaise, which then may go into one of the many salad dressings. At the end of the process could be thousands of cases of multiple products that contain material from a particular batch of a raw ingredient. "We have to be able to verify where each of those cases are - so many at this warehouse, so many at this distributor, so many at this customer, and this much product was lost in production."

Naturally Fresh was able to do this before, Stell says, but it took three to four days. Now the tracing is done in three to four hours.

Naturally Fresh continues to expand its use of iRenaissance. "One of things we are looking to do is enable better access for our customers by opening up our system to them" says Stell. "We want customers to be able to log in and place an order online or check the status of an order or check on their open invoices. This would help them manage their business better and would also allow us to do a better job from a customer service standpoint - really a CRM type of application."

The company also wants to improve its connectivity with suppliers. It is beginning to implement vendor-managed inventory with some of its packaging providers, for example. "We know we are going to use the same label for the next five years, barring anything major coming up," says Stell, "so we ask our vendor to go head and print these labels for us. They may print enough to last us a year, then they maintain the inventory and pull it as needed."

"No matter what, it is never an easy process to do a major implementation, but it is well worth the effort," says Stell. "And one of the things we have learned is that this is a process that should never stop. You always need to listen to people, watch what is happening and go in and tweak things as needed. There really is no end point."

Naturally Fresh is one of the most ubiquitous brands in the fresh foods industry. Whether during commercial travel, at a restaurant, or having dinner at home, nearly everyone has tried a sauce or salad dressing from this Atlanta-based company, formerly known as Eastern Foods.

In addition to being the leading supplier of salad dressings to airlines, Amtrak and cruise ships, Naturally Fresh serves thousands of restaurants, institutional food providers and national grocery chains. Thirty-three million portions of its products are dished up monthly, delivered via 28 distribution centers around the country as well as by wholesalers and channel partners worldwide.

Of course, the company didn't start out with this kind of scope. In 1966, Eastern Foods opened with a $10,000 investment, a handful of employees and a 4,000-square-foot warehouse. Its only product was a refrigerated, vegetable-based coffee creamer that it provided to airlines flying out of Atlanta's Hartsfield Airport - before the "International" was added to that facility's name. Steadily, the privately held company expanded. It entered the specialty goods market in the 1970s, then in the 1980s moved into retail - supermarkets and restaurants - with its Naturally Fresh line of products. Later the company added bar mixes and steak sauces to its product line. Today, Naturally Fresh operates from a 250,000-square-foot facility in Atlanta, produces more than 300 recipes, each packaged in a multitude of sizes, and has annual sales approaching $100m.

"The company has experienced consistent 10 percent to 25 percent growth a year," says Joe Stell, director of information systems at Naturally Fresh. In order to better manage this growth - and to ensure that it would encounter no Y2K problems - the company decided in the late 1990s that it was time to upgrade its existing legacy system.

"Not only were our sales growing, but our product line was growing as well," Stell says. "When we say we have 300 different products, that doesn't take into account all the different packaging. For instance, Ranch dressing is Ranch dressing, as a bulk product, but we package it in gallon containers for restaurants and in 16-ounce jars that you see in grocery stores as well as in four-ounce individual services, the little pillow packs that you get at the salad bar and even the small cups that are used on airlines. There may be 10 different pack sizes for one product." This adds a lot of complexity to the manufacturing side as well as to forecasting. "We needed much more detailed information and a lot more visibility than we had in our legacy system," Stell says.

Limited Shelf Life
The need for effective inventory control is exacerbated by the perishability of Naturally Fresh products, which - not surprisingly - are made with all natural ingredients and no preservatives. Most product must be refrigerated and shelf life is limited, with every product carrying an expiry date. "If something gets to within 30 days of that expiration date, stores really can't sell it, even though it is still good," says Stell. The maximum lifetime of a product is 180 days. "That may sound like a long time, but it really is a relatively short window for manufacturing a product, packaging it, warehousing it and getting it through distribution channels to the ultimate consumer. So we have to manage our inventory very well and have it go out as quickly as possible after it is made."

After considering five enterprise resource management products to replace its legacy system, Naturally Fresh decided on Ross Systems, Atlanta, which specializes in enterprise applications for process industries. "We saw that we would have much more detailed information available to us with Ross," says Stell. In addition, Ross demonstrated "a whole multitude of critical criteria, from ease of implementation to functionality specific to food manufacturers - the whole nine yards," Stell says.

Implementation of the Ross iRenaissance system was completed in August 1999, four months ahead of any Y2K issues. Today, iRenaissance handles all of Naturally Fresh's processes and transactions. On any given day, says Stell, the company knows "with much greater certainty" what needs to be made and in what volume. "I don't say make to order, because we don't do that, but product is made as it is needed," he says. Naturally Fresh says it also knows where each finished product is located - down to the last ounce - anywhere in the world. That's a lot of product. The company packages more than 3,000 units every minute, totaling more than 25,000 gallons a day.

"Before, we were able to know what we did yesterday," Stell says. "Everything was batch processing - we entered all our work in today and then overnight we ran reports that told us what happened." As the business grew, working with day-old information "simply became unacceptable," he says. "Now, we have a real-time system that gives us a much better view of not only what we manufactured and filled yesterday, but what I am going to need to manufacture and fill tomorrow." This information is continually updated, he adds. "I can run a sales report now, and when I look at it again in five minutes it will have changed."

"One of the important things about our product is that it is built on an internet technology foundation," says Eric Musser, CTO of Ross Systems. This means that all of the execution applications are available via a browser-based interface, using XML and web services connectivity standards. This enables connections to be established and maintained with minimal overhead, Musser says, and the need for expensive and maintenance-intensive middleware is eliminated.

Automatic Reports
Having inventory and other information available in useable, automatic reports was important to Naturally Fresh and it spent time getting it right. "Reporting was a big deal for us, and it took a while to customize the software to get it to do what we wanted and to integrate information that management needed from some other applications, such as demand planning - things that our legacy system could not do," Stell said.

The company currently is looking at making all of its internal reports web based, which iRenaissance also can enable.

The fulfillment process begins for Naturally Fresh when its 28 branches, or distribution centers, place orders with the plant, based on orders they have received from individual customers. "Now, we actually have visibility to three important pieces of data," Stell says. "We know what the branches are requesting based on orders and inventory on hand, we can see what we had forecast and we know what customers have actually ordered. We combine all that information to determine how to modify our production schedule," so that supply more accurately matches demand. Often, there is a little more collaboration involved, Stell adds, particularly on the retail side. "If a store like Kroger is doing a big promotion, particularly if it is a BOGO [buy one, get one free], which can increase sales by 25 percent to 30 percent, we need to know about that as early as possible. If we are not ready for it, we're going to short them, so it takes a lot of collaboration between us and customers and with our sales people to make sure that the peaks and valleys are communicated back to the plant."

Personal Interaction
The company uses its systems to enable some of that collaboration, but for the majority, "you still can't beat the telephone or e-mail," says Stell. "The reason I say that is because I believe you really have to interact with a person." Stell notes that the company's branches and field staff have very close relationships with customers, "so much so that if a customer fails to call an order in one week, the sales person will pick up the phone and say, 'Hey, where is your order?'"

With better visibility to actual demand, Naturally Fresh is able to schedule more efficient production runs and significantly reduce changeovers. "Typically, we manufacture several vats at a time - these are huge tanks that can be 10 or 15 feet tall and about 10 feet in diameter," says Stell. The product in these vats feeds the production line, where it is put in various size containers. "Every time we make a change from one line to the other we lose product and time," says Stell. "Now, instead of running 10 different products each day - stopping the Ranch midstream to switch to, say, Blue Cheese and then going into an oil and vinegar dressing - we actually are able to run the Ranch all day long, then do Blue Cheese and so on. This is because we have better visibility to what we need to produce." The company has decreased the number of separate production runs by 20 percent to 25 percent, Stell says, which means that the same amount of goods can be produced with fewer workers.

Currently the company is achieving an extremely high fill rate on customer deliveries, Stell says. "I look at that about once a week. Every once in a while we drop below 99 percent at one or two branches, but that is rare. Most of the time it is 100 percent," he says.

The actual movement of product is well in hand since Naturally Fresh has its own fleet of refrigerated trucks that make set runs to its 28 branches. "For example, we have trucks that run from Atlanta to Seattle and back, or trucks that run from Atlanta to Houston to Dallas and back," Stell says. "The runs are very static and very predictable. They are loaded at the same time each day and depart on the same days of each week and everything follows a very tight schedule." On a smaller scale, the same holds true on deliveries from the branch DCs to individual customers. "Most restaurants or retailers want two to three deliveries a week," Stell says. "They don't want to maintain an inventory, so we will warehouse it for them. So every day the first run of the morning will be these 15 stops, then you go back and load up again and go to the next 15 stops. That happens, with those stops, the same days every week." Because of this predictability - and because of Naturally Fresh's already high performance - the company elected not to implement the transportation management system in the Ross iRenaissance suite. "The transport situation has really worked very well for us," Stell says, who notes that the Naturally Fresh fleet often is able to pick up raw materials on the return trip to Atlanta. Naturally Fresh purchases and processes more than 300 tons of fresh vegetables a year as well as prodigious amounts of oil, vinegar, butter, cheese and other base ingredients. "We didn't use the transportation part of the software only because there was no need to fix something that was already working," he says.

Another critical functionality that is being enabled by the Ross system is lot traceability. "This is a major concern in the food industry," says Stell. "We have to know every product that a given raw material goes into." For example, he says, butter is one of the materials that Naturally Fresh uses in large quantities. "Let's say we find out that a block of butter was contaminated," he says. "We actually know every product that was made using that block. We know where it went, which job it went into, which cases it was packed in and where those cases were delivered. This is a functional aspect of the software that was really critical to us."

That is not because recall situations occur frequently, but when they do occur fast, accurate information is imperative. To maintain its edge in this area, Naturally Fresh regularly runs "fire drills" to test its tracing capability. "Somebody from Quality Control will come down and pick a raw material - they may choose something like honey that comes in these big totes - and they will say, 'This particular 3,000-pound tote of honey was bad. I want you to identify all of the product that it went into.'"

Often there are secondary products along the way, Stell explains. Oil and eggs, for example, are combined to make mayonnaise, which then may go into one of the many salad dressings. At the end of the process could be thousands of cases of multiple products that contain material from a particular batch of a raw ingredient. "We have to be able to verify where each of those cases are - so many at this warehouse, so many at this distributor, so many at this customer, and this much product was lost in production."

Naturally Fresh was able to do this before, Stell says, but it took three to four days. Now the tracing is done in three to four hours.

Naturally Fresh continues to expand its use of iRenaissance. "One of things we are looking to do is enable better access for our customers by opening up our system to them" says Stell. "We want customers to be able to log in and place an order online or check the status of an order or check on their open invoices. This would help them manage their business better and would also allow us to do a better job from a customer service standpoint - really a CRM type of application."

The company also wants to improve its connectivity with suppliers. It is beginning to implement vendor-managed inventory with some of its packaging providers, for example. "We know we are going to use the same label for the next five years, barring anything major coming up," says Stell, "so we ask our vendor to go head and print these labels for us. They may print enough to last us a year, then they maintain the inventory and pull it as needed."

"No matter what, it is never an easy process to do a major implementation, but it is well worth the effort," says Stell. "And one of the things we have learned is that this is a process that should never stop. You always need to listen to people, watch what is happening and go in and tweak things as needed. There really is no end point."