Ault Foods Ltd.

Ault Foods Ltd. is one of Canada's largest and most successful consumer goods companies, with many diversified divisions and affiliates, and total sales over $1 billion. The Industrial Division of Ault Foods produces a large variety of dairy products, encompassing over 1,000 consumer SKUs, and well-known brand names such as Black Diamond Cheese.

A mandate was initiated to improve the forecasting process that drives manufacturing systems. Specifically, the mandate entailed generating weekly forecasts for production, while providing Sales and Marketing with numbers that would be useful as decision support. Historically, there was no formal, unified process to generate forecasts which could drive the manufacturing cycle. Even within the Industrial Division, different techniques and processes were in use. Senior management felt that improving forecast accuracy could result in significant savings, by reducing work-in-process, inventory and unsaleable product levels. Also, by planning better, it was felt that more order could be brought to a business noted for its volatility. The solution required would therefore encompass not only new software systems, but also process and MRP-related consulting.

Ault evaluated a number of software packages and vendors, before choosing Hunter Business Consultants, Inc. (HBC) of Mississauga to supply an integrated solution comprising the TimeTrends® forecasting system, consulting, process re-engineering and training. HBC were selected due to their ability to integrate a PC-based forecasting system with the AS/400 based CA-PRMS manufacturing system. HBC's experience in MRP II environments and with process re-engineering were also key factors.

TimeTrends is a forecasting software system developed for the Windows™ operating environment by Montreal-based software developer ALT−C Systems Inc. TimeTrends was chosen as the forecasting package, according to Karen Liedtke, Forecast Coordinator, primarily due to its ability to import promotional indices from Microsoft Excel, as well as its user friendliness, ease of setup, and fulfilling a detailed list of other criteria that had been established as part of Ault's commitment to leading software technology.

The initial portion of the project involved one of HBC's consultants studying the current processes, information flow, timelines and so forth. This resulted in recommendations being made as to the optimal forecasting process. The forecasting process had to be at the SKU level, since many if not most of the SKUs were subject to different promotions and sales patterns. Customer needs, A-B-C ranking and safety stock were also considered. The promotional influences on the business were extensively analyzed and quantified in models that included account type, expected pricing competitiveness and promotional effect on baseline volumes. These were incorporated to generate final forecasts. The result is a weekly set of forecasts, generated by Trade Marketing in the Ault Etobicoke Head Office, which are transmitted to the production plant located in Belleville, Ontario.

System integration issues included first of all extracting sales data from the AS/400 and downloading it to the Novell network for updating the PC-based forecasting database. This database is now updated on a regular basis with new data, providing a virtually automatic process. Forecast processing is done within TimeTrends which then exports the resulting forecasts in a format suitable for uploading back to the AS/400. Results can also be distributed by attaching a report to the inhouse cc:mail electronic mail system. Several exception reports were specifically developed on the AS/400. Reports can also be run at the PC level through TimeTrends ability to create a direct link to a third-party report writer. The result combines the flexibility of PC-based analysis with the number crunching power of the AS/400.

The results have been dramatic. A sample study of 19 key promoted SKUs, (previously forecasted monthly), were tracked for 22 weeks to measure compliance with a plus or minus 30% error margin. The compliance of the test SKUs increased from 40% on a monthly basis to 50% on a weekly basis. In other words, accuracy increased significantly, while at the same time quadrupling the level of detail. Other benefits include improved customer service, improved product quality and rotation, and inventory reduction.

Next steps call for expanding the use of TimeTrends to other product lines and within other divisions.

"The TimeTrends product is helping Ault obtain the winning edge and focus on its most important asset - its customers." - Susan Dineen, Director, System Development and Support

TimeTrends was chosen as the forecasting package, according to Karen Liedtke, Forecast Co-ordinator, primarily due to its ability to import promotional indices from Microsoft Excel as well as its user friendliness....

"The development of a forecasting process was considered as critical to achieving excellence in production planning. We believe that the TimeTrends product was an outstanding choice to help us attain this objective." - Susan Dineen, Director, System Development and Support

TimeTrends® is a product of ALT-C Systems Inc