Sara Lee Case Study

by Phil Robinson (BPIC) - Comments to : phil@bpic.co.uk
URL : http://www.bpic.co.uk

As success stories go Sara Lee Household and Personal Care is a household name. Yet when the time came to update their computer system, they found out they were failing to achieve their true potential. In order to choose the right system for their needs, it was necessary to take a closer look at the business and the way the company worked. The result was to opt for the MRP II computer system CINCOM    along with the forecasting package Logol .

Jargon Warning If this case study uses terms with which you are unfamiliar, you can look them up in the Jargon Buster at http://www.bpic.co.uk/jargon.htm. For more details see Business Excellence (ISBN 0-952-8885-05) by Phil Robinson.

Sara Lee also decided to completely overhaul their total business philosophy and this is when MRP Ltd was called in to bring an outside view to the situation and begin Sara Lee's examination of the route to Business Excellence.

MRP Ltd were able to help the company's management team to scrutinise every aspect of their business and see where they could perform better. For example, they had assumed their Bill of Material accuracy was good, but it was only between 30% and 50%.   Now 99% accuracy is the norm.

John Wilks, Operations Director for Sara Lee was delighted: "MRP Ltd delivered a set of tools that pulled together Total Quality, MRP II and JIT. This allowed us to measure where we were, how we could improve performance and gain a competitive edge."

The next step was to spread that culture of continuous improvement throughout the company External education was undertaken and cascaded down internally, promoting change from within.

Meanwhile, the change towards complete integration was kept on target by the introduction of a Sales and Operations Planning framework. Wilks continues: "We were able to strip out duplication and see clearly how the company was performing, which is essential for control and improvement" .

Today, a new stock control and location system has helped improve raw materials inventory accuracy move from 20 / 40% to 99.8%. Finished goods inventory accuracy has risen from 20% and under to a firm 98.5%. They have made a saving of 50% on inventory investment, yet customer service and satisfaction have reached the highest levels ever (99.5% plus).

But the last word must rest with Sara Lee's John Wilks who would not describe the route they have taken as easy. "MRP Ltd's role has been to hold up a mirror to show us where we were. The rest depends on the commitment you're prepared to give, particularly through education and training, and the skills you can draw on within the company".

"It took us two years to see tangible results, exactly as Mike Salmon predicted. But there is only one alternative to Business Excellence, and that is business mediocrity " Class A since June 1994, Sara Lee continues to forge ahead.
 

Phil Robinson - www.bpic.co.uk 1/12/97