Nicholl Food Packaging Ltd UK (NFP) is the head office of the successful Nicholl Group, a leading manufacturer of aluminium foil containers predominantly used by the food industry. The £58m turnover group sells to the major mainland European markets and the UK where it supplies trusted food companies including Heinz, Danone, Unilever and Manor Bakeries (Mr Kipling) with end users including Marks & Spencer, Tesco, Asda, Morrisons and Sainsburys and perhaps your local Chinese or Indian takeaway. Market share is approximately 55% in the UK with NFP alone forecast to produce 1.7 billion trays in 2010 to meet demand. Recent ventures include sales in America, Canada and Australia. Planning and scheduling on this scale and for such household brands requires a solution with an impeccable pedigree – one of the reasons NFP invested in Preactor.
From tarts to takeaways to turkeys, the food industry uses a staggering amount of foil trays each year and these come in a bewildering variety of size, shape, gauge and finish. NFP has over 800 different product types to choose from in addition to occasionally being called upon to design a bespoke product with annual demand ranging from 60,000 to 500,000,000. The company deals with approximately 400 orders a week as well as managing consignment warehouses for specific customers. Price and timely availability of product are the key considerations for many of NFP’s customers so accurate planning and scheduling of not just what to make and when, but also how much and what type of foil to buy and when are vital to NFP’s success.
While finished good product lead times average about a week they can vary between same day (ex stock) and several weeks. Lead times for over 200 different types of raw material used are typically 6-12 weeks. NFP does have 3 consignment stock facilities which help buffer against demand fluctuations and delivery disruptions. As these facilities have different stock and credit agreements it might be more cost effective to call down stock from different facilities at different times. Because of this, and the regularly fluctuating cost of aluminium itself, accurate demand forecasting plays a key role with NFP often having to commit to purchasing foil prior to having confirmation of orders. Tight interaction between demand forecasting, sales orders, purchasing and production planning is vital as actual demand compared to forecast demand as well as actual production against planned production can have a huge impact on foil requirements.
The production process itself is relatively simple albeit done on a large scale involving 46 process lines divided into 4 main types. These presses make use of over 250 live tools with different products requiring overlapping combinations of press, tool and stacking/collection system. Minimum production runs are 24 hours while others can be continual throughout the year and may involve several presses. Set-up times are relatively short and there is an appreciable degree of time saving by sequencing groups of jobs that require the same tool but with a slightly different setting. Similarly it is advantageous to place jobs that are automatically collected on adjacent presses so that they can be monitored by a single employee thus utilizing labour more effectively. After the trays have been stacked (by hand or automated stacker), they are loaded into appropriate packaging according to customer specifications and moved to the finished goods stores where they are kept as stock on high turnaround items or dispatched to the customer.
Chris Scattergood is Operations Analyst at NFP and has been with the company since 1999. Originally he worked for Ekco Packaging in Buckinghamshire but relocated to the midlands when it was acquired by NFP. He describes the main planning and scheduling challenges that the company face. “Given the importance of integrating forecasted and actual sales with purchasing and production planning, Christmas presents the biggest difficulty. This is not just because of the increased demand we experience but also because of the finite capacity constraints in production.
We tend to get an increased amount of unpredictable short term orders, either as a result of promotions in the major supermarkets or sometimes because one of our competitors has a problem with their supply. We need accurate visibility of our current and projected plan in order to know whether we can fulfil these orders.”
He continues, “We endeavour to supply all demand and have to adjust our plan on a regular basis in order to do this. Though our tools and presses are regularly maintained and serviced inevitably there are unforeseen breakdowns which also have an impact on our plan. If a tool or press fails, it may be a simple fix or a complex and lengthy issue, all of which has a knock on effect on the following jobs.” As previously mentioned, NFP’s final challenge relates to the long lead times in foil purchasing compared against relatively short notice on the majority of sales orders. Even allowing for the cushioning effect of consignment stocks, NFP has to plan to have an optimum level of both finished goods and raw material at all times.
According to Scattergood, prior to investing in Preactor, scheduling and foil availability problems were “usually dealt with as they happened.” Foil stock levels as well as finished good levels were much higher than they are now on a “just in case” basis. NFP (at the time Ekco Packaging) used a Movex system and a variety of Lotus 123 spreadsheets to cover any areas that couldn’t be dealt with in the main system though Movex did have built-in MRP and some basic scheduling tools. When acquired by NFP, Sage became the main system in line with NFP’s other production sites though as Sage’s MRP abilities were not suitable for NFP’s processes, further spreadsheets where used to fill the gaps. Many of these were updated on a manual basis which was time consuming and there was always a danger of mistyped information, formulas accidently overtyped or multiple versions of the spreadsheet being generated.