Mother Parkers Tea and Coffee tackles manufacturing complexity with a scheduling system.
Analyzing the demand stream—looking at historical patterns, demand variations among different products lines, seasonality and order sizes.
Creating an inventory profile—identifying the relevant inventory attributes such as product, package, production date, amount and warehouse and manufacturing locations.
Creating a demand planning process that can be routinely executed—deciding on a level of aggregation that generates a statistical forecast without losing too much detail and identifying the persons or functions that contribute changes to the demand plan.
Create a model to balance supply with demand—constraints and cost factors such as manufacturing facilities, transportation resources, contract facilities and other resources can be balanced with revenue or margin optimization to find the balance point in keeping with business objectives.
Implement an ongoing sales and operations planning process—far more than a "monthly meeting," S&OP is the way effective supply chains are managed on a daily basis, providing a disciplined way of responding to change while minimizing disruption in the day-to-day operations.
Building an ATP (available to promise) capability—in this final step, companies build additional quantitative and communications structures to provide specific calculations and reporting procedures for your most common promise transactions.
Coffee Processing: A Balancing Act
Mother Parkers Tea and Coffee implemented the scheduling techniques in stages at its Mississauga plant, starting with packing lines, then the grinders and bins and most recently, the roasters. Will Kappel, the company's vice president of supply chain, has been overseeing the project for the past five years.
How are you doing your scheduling today?
Kappel: Every morning, we download all our coffee inventory positions across the entire system, so we know what our starting bin inventories are. We have all of the orders from our ERP system, all the demand, whether it's an actual order or an inventory adjustment, and the schedulers get to see the total demand.
The plant features 26 packaging lines, so for each line the schedulers optimize packaging. Each line flows through a unique set of bins and grinders, and then works back through another set of bins for holding and tempering and then back again through one of five roasters. The product can be produced on any roaster, so the system gives a series of preference tables to determine which roaster to use.
It might say that, for a certain blend, you can only make that on two of the five roasters—and out of those two, you should prefer one for whatever reason. It knows that out of your 10 grinders, three can make that particular grind—it might be a really fine grind for an espresso or for a vending machine, so it knows which grinders it can tap into.
How does it do that?
Kappel: The system understands the plumbing of the plant, so it knows which bins and lines can feed certain grinders and what packaging lines are available. It goes through and searches the best availability and combination throughout the system.
How flexible is the system?
Kappel: The system generates the schedule, but it allows the scheduler to makes changes if needed, so it's very flexible.
How accurate is the forecast?
Kappel: We've been hitting 99 percent attainment on a daily basis—and last week we hit 100 percent, which I've never seen before. We've seen a 20-point improvement in schedule attainment, plus a dramatic improvement in scheduling capability. And now we can monitor and measure schedule attainment at each level of manufacturing.
What were some of the benefits of working with SCC?
Kappel: SCC has the technical expertise that we don't have, so they worked with our folks to model the system and develop the scheduling tools. They learned our business very well and were able to translate that into an optimization algorithm. The tools are not unique, but our application is, and they successfully translated it into the tool.
Coffee Facts
Coffee is one of the largest commodity industries in the world, second only to oil. Coffee is indigenous to the highlands of Ethiopia and the Boma plateau in the Sudan. Production is concentrated in the tropics of Cancer and Capricorn, with South and Central America and Africa being the largest growers.
Coffees, like wine grapes, get much of their flavor from specific growing conditions and preparation methods of each producing region. Ideal growing conditions include: volcanic rich soil, cool temperatures, tropical rains and a high altitude.
Coffee is grown at numerous elevations along mountains—to about 7,000 feet. Midway up the mountains, at about 4,500 feet elevation, is where the best quality beans are grown—these are called "strictly hard beans."
Coffee grows on trees. Individual trees take approximately five years to mature. The average height of a coffee tree is kept trimmed from four to six feet. This eases picking and maintains quality.
Of course, as with fruit trees, the best quality fruit is found at the center of the tree. Crops begin with the flowering of the trees, and approximately five to six months later, the fruit is ready for harvesting. It takes five years for a coffee tree to bear its first crop.
Bright white flowers signal the beginning of the growing season. The fruit matures to a bright red cherry. These cherries are harvested by hand and sent to a processing facility, where they are milled, washed, sorted and dried. At this point, they are ready for exporting. Raw coffee beans are shipped to roasting facilities in burlap sacks.
A coffee tree will yield, on average, one pound of coffee per year. Interestingly, about 3,500 coffee beans are needed to produce one pound of roasted coffee.
