For most manufacturers, production scheduling is more of an art than a science. With so many variables—changing consumer demand, seasonality and promotions, to new a few—and information coming from a variety of sources—demand planners, plant managers, sales representatives, etc.—it's hard to believe that any organization can accurately plan more than a day ahead.
But forecasting doesn't have to be a guessing game, as Mother Parkers Tea and Coffee Co., a Canadian-based tea and coffee producer, found out. You may not recognize the name, but chances are you've had a cup of its coffee as Mother Parkers provides private-label blends for many leading grocery and restaurant chains in the United States.
In Canada, the 94-year old company is renowned for its own brands, including Higgins and Burke as well as its namesake, Mother Parkers Coffee and Mother Parkers Tea. It also produces private-label brands for a number of lines. The company operates three manufacturing facilities—separate coffee and tea plants in Mississauga and Ajax, both in the greater Toronto area, and another coffee plant in Fort Worth, TX.
The two coffee plants produce finished product at a rate of more than 50 million tons per year, making Mother Parkers the largest privately held coffee and tea manufacturer in North America.
Scheduling these products on shared facilities is a challenge because of the variety—some 3,500 SKUs—and the need to respond quickly to changing customer demand.
"In the Mississauga plant, we do everything from very large runs for our biggest customers to make-to-order runs that can be as little as 30 cases," says Will Kappel, the company's vice president of supply chain. "We bring in un-roasted green coffee in burlap sacks from around the world to produce about 100 different blends. We have to schedule the run, roast, grind, de-gas, blend and package the product. Sounds very easy—just follow the sequence and you're set."
But coffee processing is not that simple, Kappel says. In fact, it's a complex process. "The cycle times on each product can be very different. We can have a whole bean coffee that has a very fast cycle time through the plant, say 20 minutes from roasting to packaging. But in another situation, that same roasted product may not be packed for 24 hours.
"We've got five roasters and hundreds of tanks, and every single lot of coffee is uniquely produced and running through the facility at a different rate. We have to monitor quality control because of tempering and degassing times, which complicates the process. Any change in production schedule can have a large impact on throughput because we have multi-layers of movement of product through our network," he says.
How to manage complexity? A few years ago, Mother Parkers launched an initiative to improve schedule attainment, reduce costs and inventory levels, while maintaining customer service. The company boasts a case fill rate of 99.3 percent plus, so its high service level gave it a competitive advantage, but at a cost.
"Internally, we had to maintain that service painfully," says Kappel. "Our objective was to find a scheduling solution that allowed us to forecast better, combine like blends so that our packing lines were producing on a more consistent basis, and combine and sequence through the roasters, so that the roaster would be operating on a continuous basis."
In addition, the company wanted to be able to continue to grow its business.
"If you're in the branded business, you create marketing programs to grow your business and find new forms of distribution, but in the private-label business, your business grows as fast as your customers can grow it," says Kappel. "We can't grow any faster than our current customers.
"Last year we added a major convenience store customer and manage two-thirds of their volume, and we took over that business seamlessly. And we recently got all of our plants organic certified because we see huge growth in organic products. So we're trying to better manage all of this complexity, and do it more cost-effectively."