20% of Orders are now received via EDI but as these are mainly from large multiples, these account for 50% of the actual production with other orders coming in via fax, telephone and increasingly email. Opies manufactures on 90/10 split between Make To Stock (MTS) and Make To Order (MTO) with the former having a typical lead time of 1-3 days and the latter between 1 to 3 weeks depending on product. To meet these orders, Opies runs 4 main production lines – 2 product type specific and 2 with multiple product capabilities – with additional hand packing capabilities when required.
Paul Fox joined Opies in 1999 and is Business Development Director. His arrival was a catalyst for implementing significant changes to the company’s manufacturing and he outlines the key challenges a company like Opies faces. “A food company like ours has 3 main considerations: forecast accuracy, stock control and production. If the forecast is wrong, you either end up making too little or too much product. If your stock control is poor, you either end up with surplus stock which is waste or a shortfall which means you are unable to meet your customer orders. In terms of production, you need to maximise the efficiency of your product lines to avoid costly downtime due to poor planning especially where lengthy changeover times are involved.”
When it comes to forecast accuracy, Opies is fortunate that customer demand via multiples is fairly predictable, even allowing for the Christmas weighting of certain products. Only the food service sector offers the occasional challenge in terms of unexpected demand. Opies therefore compiles its forecast on a rolling monthly basis based on the previous years’ sales figures and demand levels.
A much greater challenge however exists in the area of raw materials and stock control. While demand may be fairly consistent, availability of raw materials may not be. Opies buys in against contract and draws down according to order and demand, however as Fox explains, this doesn’t necessarily guarantee supply. “We are sourcing products from all over the world – many of which have very narrow windows of availability and which are highly susceptible to disruption. Drought, flooding or disease can decimate an entire crop of a vital ingredient or push the price up dramatically. Because of the distances involved, we also have to deal with delays and problems in transportation.”
Fox cites the current world shortage of lemons and silver skin onions as examples and this can lead to limited availability of a certain product which then brings complications of product shortages. This also puts acute pressure on the manufacturing and production side of the business because failure to get each batch right first time and the resulting waste could make the vital difference between meeting customer demand or not.
The greatest potential difficulty in terms of production comes from dealing with such a large range of product types each with different shapes and sizes of packaging. In addition to managing the flow of correct product down the appropriate line, sequence dependency is also critical to minimise time consuming changeovers. “A complicated product changeover can easily take an hour” explains Fox. “Not only does the line need cleaning to varying degrees depending on the difference between products, it also needs to be recalibrated in terms of jar size, cap type and size, filler header and label type and size. Even allowing for the ideal of a ½ day run this still represents a minimum of 4 hours per week.” With Opies running a 40 hour, 4 day week, even a modest increase in the number of changeovers or changeover times can effectively take out an entire day’s production.