Independent Egg Producers’ EDI Upgrade flows smoothly

When one of New Zealand’s major egg suppliers needed to overhaul its accounting solution without ruffling feathers down on the farm…

Independent Egg Producers Co-op Ltd (IEP) is a major nationwide New Zealand egg supplier to retailers and the food service industry.

IEP sells cage, barn, free-range and organic eggs under the Morning Harvest, New Day and Sungold brands. Its customers include the country’s two large supermarket operators, Foodstuffs and Progressive Enterprises, and the McDonald’s restaurant chain.

The co-operative is made up of 15 regionally-based owner/operator farms with national sales agreements, marketing and promotional activity run out of a head office in Auckland.

The challenge
In order to improve its business processes, and to comply with increasing customer expectations that orders be processed electronically, in 2008 IEP began a project to implement an EDI platform combined with the deployment of a new head office financials system.

A key requirement of the new solution was the implementation of systems that would not only meet the accounting requirements of IEP Head Office, but also enable the integration between each of the cooperative’s 15 members and their range of different accounting systems.

The project was prompted by Foodstuffs, which required its suppliers to implement an EDI solution for processing orders and invoices. With Foodstuffs business across New Zealand divided into three regions, and with each region requesting multiple egg orders each day, there are literally many dozens of orders and invoices transmitted between IEP and Foodstuffs’ offices in Auckland, Wellington and Christchurch each day.

The Solution
After researching its options, IEP selected Flow Software, a specialist in data integration and EDI solution with offices in Australia and New Zealand, to deploy its EDI solution.

System integrator Datagration was selected to work with Flow to deploy MYOB’s EXO Business suite as the co-operative’s new head office accounting solution. Datagration also implemented EXO Business at three of the co-op’s farm sites.

EXO Business offered IEP the benefit of functions such as financial and customer management, reporting and inventory control.

Flow’s software was installed as the middleware between EXO Business and the several different accounting solutions being run by the co-operative’s member farms.

“When we first conceptualised the project it was quite a minefield,” says Susan Bamfield, IEP’s general manager.

“We spoke to a number of customers and companies about our requirements and I was given Flow’s name by a key customer as an option,” Bamfield says.

“Right from the outset they were very customerfocused and made a real point of trying to get a very good understanding of our business. Flow and Datagration worked very well as a team and everyone’s been very proactive about solving problems along the way. They’ve been fantastic.”

With approximately 100 invoices being sent electronically from IEP to Foodstuffs’ three regional offices each day, key advantages of the new system include the reduction in administration required at the farm and head office level, a reduction in invoice errors and better transparency through report generation.

“From a management perspective this means we are in a better position to measure the business by product, by customers, by individual farm, and to look at trends across the business,” says Bamfield.

The combination of the EXO Business solution and integration using the Flow system enables IEP to generate a number of highly useful reports including a daily statement for each individual farm of all the invoices sent to head office, plus weekly statements of outstanding invoices.

Head office receives reports of all invoices outstanding for each of the three Foodstuffs regions and is also importing .csv remittance files from Foodstuffs, cutting out the need to manually retrieve this data.

Bamfield says one of her main requirements during the deployment of the system was that it didn’t disrupt work on IEP’s farms.

“My instructions were that at the end of the day we couldn’t disrupt the farms’ day-to-day operations,” she says.

“The farms were understandably quite sceptical about the impact a major IT project would have so my priority was to get them on side and make things as disruption-free as possible until we got to the point where we could tell them to press the button.

“That’s happened as well as we could have hoped for, so I think the farms have been pleasantly surprised that all the glitches that you hear about in IT projects haven’t happened,” she says.

“That’s testimony to Flow’s and Datagration’s real customer focus. They understood where we were coming from and did everything they could to make sure our expectations were met.”

Speeding things up
Bamfield says with the project now fully completed, IEP is noticing a number of benefits to its head office operations, and also the way business is being run on its member farms.

Whereas there was previously a backlog of Foodstuffs invoices in the system, invoices are now being paid much faster, meaning cashflow is improved.

Administration time at the farms and at head office has been reduced, and the farms are also saving on consumables costs, such as paper, printer ink and postage.

“It now just takes a click of a mouse for the farms to submit their invoices. They no longer have to do any of the work they used to such as printing off each invoice and going through them one-by-one.”

As well as the efficiency and cashflow gains introduced by the new system, it has also enabled better tracking and order fulfilment, and better invoice accuracy through reduced human error.

Bamfield says the project has also set IEP up well to take advantage of future opportunities to automate processes and add other customers to its EDI platform.

“We’re also going to be looking at the options of automating more at farm level on the remittance side which will mean further savings through efficiencies,” she says.

“We’re certainly looking at ways we can become even more efficient using the solution Flow and Datagration have put in place.