Ateeco Adopts Business Process Management

Under the brand Mrs. T's Pierogies, Pennsylvania-based Ateeco Inc. manufactures more than 12.5 million potato and cheese filled pasta products a week called pierogies to grocery markets, convenience stores and food service clubs across the United States and to military bases around the world.

 

Ateeco needed to create profitable growth through operating cost reduction, product innovation and by increasing sales of existing products. Through the use of timely and accurate information, and through continuous improvement initiatives with built-in best practices, IDS Scheer and SAP software provided the 56-year-old business with both of these imperatives.

 

As part of a company-wide strategic plan to increase profitability and business performance, Ateeco realized it needed a single computer system to improve the automation, data accuracy and planning processes across offices, manufacturing plants and 14 warehouses. Process improvements were needed in areas like sales and distribution, finance and controlling, materials management and product planning.

 

At the time, recording the receipt and consumption of raw ingredients and the output of finished goods was a manual process performed each day for the previous day. Not only was it a time-intensive task, but for some warehouses, inventory information was accurate only 80 percent of the time.

 

"The Mrs. T's Pierogies brand is very successful, but inefficiencies and manual processes in production, distribution, accounting and more were preventing the company from reaching our goals of maximum profitable growth," says Timothy Coyle, director of Information Systems & Technology, Ateeco. "Taking many of our day-to-day manual processes into an automated, digital form freed up our staff's time to do higher-level tasks and focus on growth."

 

Ateeco digitized the process by assigning pallets of finished goods and orders of raw materials unique identification numbers that were transmitted wirelessly as they're processed. This has given Ateeco real-time insight into when a pallet was made, what raw materials were used, when it was received, when the pallet was shipped to an outside freezer and when the pallet was picked up and shipped to a customer.

 

Ateeco hired IDS Scheer to implement the SAP infrastructure that would facilitate, monitor, report on and help the company improve processes. The results were a 13-week, $500,000 project that's expected to deliver a 300 percent return on investment, a 15 percent to 20 percent improvement in inventory accuracy, and a real-time view into the company's operations.

 

Based on industry-averages for enterprise resource planning (ERP) implementations for mid-sized manufacturers, Ateeco expected the implementation to take six to nine months. But each week that passed was a lost opportunity in the highly competitive consumer products arena.

 

"Even though our implementation was only 13 weeks, we took the challenge very seriously, knowing the lost opportunity each day the project wasn't complete," says Coyle.

 

According to Coyle, the company adopted a "start small, think big" approach. Ateeco aimed to achieve 80 percent of the functionality needed quickly for critical areas, then work on additional features later on. It also used an out-of-the-box, industry-specific SmartPath for Foods business process modeling solution, which came pre-packaged with models for best practice processes in the foods industry.

 

A team of 20 Ateeco associates and six IDS Scheer consultants blueprinted, prepared, completed and tested the ERP system using accelerated SAP methodologies in 13 weeks, less than half the expected time.

 

Ateeco received a new system for managing, monitoring and reporting on business processes that produced accurate, real-time information to company decision-makers. The company's entire IT department, including support for the ERP system, consists of only three people.

 

Accuracy of inventory data at 13 outside warehouses went from 83 percent to 98 percent. The Pittston, Penn. warehouse, which carries 70 percent of Ateeco's inventory increased accuracy from 78 percent to 98.9 percent.

 

With higher inventory accuracy and lower safety stock levels, Ateeco can reduce the balance of inventory that it stores in freezers -- the end result is lower storage and carrying costs. In addition, with accurate inventory balances, production planning can be enhanced through better staff labor resources and the efficient planning of down days.

 

Now, any inventory or delivery discrepancies can be instantly recognized with process visibility to perform root cause analysis, saving several hours of time per day. In addition, outbound shipments now have Bill of Lading documents that are generated from the computer system, not manually typed, saving several hours per day.

 

Ninety-six percent of Ateeco customers are now able to send orders and receive invoices electronically -- typically within 15 minutes. Therefore, sales shipment information is accumulated in real time. When an order is marked as shipped, Ateeco can accrue rebates expenses against the order or freight charges based on the location of the customer. This accurate accrual has enhanced Ateeco's month end reporting. Using the real-time order, shipment and accrual transactions, Ateeco has built reports that display company and customer profitability with drill down capability. Prior to the new system, this information was difficult and time-consuming to compile.

 

Improved pricing accuracy has also led to a reduction in Credit Memo and Returns. In addition, when there is a return, the integrated credit and return system maintains accurate revenue and commission details. With improved auditing trails, Ateeco can now strive for a two-day close versus one week. Plus, the company now has the highest degree of data accuracy as proven by its new reconciliation processes. For non-EDI customers, invoice processing time has been reduced to seconds per day compared to five hours/week.