IFS: Fresh food manufacturer keeps an eye on the bottom line

THE COMPANY: Freybe Gourmet Chef (FGC) in Langley, B.C., a subsidiary of Freybe Gourmet Foods, has grown substantial since inception and continues with strong growth. It supplies salads, dips and soups to local delis, chain stores and distributors, and prides itself in using local produce whenever possible.

THE CHALLENGE: A major challenge is that the raw material used is highly dependent on seasonality, which is a major contributor to the volatility of raw material cost. FGC’s legacy system used for managing recipes and work instructions could only track projected cost instead of actual cost. Maintenance of the existing system was almost impossible as it was a homegrown solution. Similarly, any upgrades and modifications proved to be extremely difficult and time consuming.

THE SOLUTION: The president of FGC requested the implementation of an IFS recipe management application that was already in use by its parent company Freybe Gourmet Foods. Recipes included in the pilot project were based on complexity of their structures, and a recipe from each product category was to be included. Once the data for the project was cleaned and entered into IFS, the system was then configured to provide reports and information that addressed core business requirements. As soon as the costing information is available (estimated material cost, latest purchase price or average purchase price), one of these costs is selected and set to the standard cost for evaluating the inventory movement of the finished goods. The summary graphical presentation of the costing result, allows for review of product costing buildup without having to go into detailed accounting explanations. An added benefit is the revision control, and accountability for changes.

THE RESULT: Cost can now be rolled for estimated material cost; latest purchase price or average purchase price.” This information is extremely valuable when renegotiating contract pricing with major customers. It also helps the operations management group to identify product categories that need to be revisited to review and update the production standards. FGC is impressed with the results of the pilot; and will capture all of the current active recipes into the system. Particularly helpful was the fact that IFS Applications was able to handle the mixed mode nature of FGC’s business, combining recipe management and process manufacturing with discrete manufacturing, which allows FGC to track cost per packaged item as well as the cost of recipe ingredients as they change.

Custom reports were designed to present recipe information to the shop floor.” In a format that is easy to read, and understand yet still capturing all the requirements needed for traceability, yield and test results for a production run. The costing report also includes a section with pricing suggestions detailing the unit and per kg costs and selling prices at different markups.

An additional phase of the project that is under discussion is shop order access on the shop floor, allowing for real time tracking and electronic end-to-end lot tractability.