Al Halwani Brothers take control with IFS modules.
The rollout of IFS’ financial and distribution modules 18 months ago has enabled food manufacturers, Al Halwani Brothers to gain greater control of its supply chain, and gather more accurate stock information.
Al Halwani Brothers has brought greater control to its supply chain over the last 18 months with the rollout of IFS’ financial and distribution modules. Previously the process of gathering accurate stock information from its nine warehousing outlets was both “lengthy and tedious,” says information systems director, Saud Mosali of Al Halwani Bros.
At the close of each working day, each outlet would upload text files containing invoicing, cash collection and customer returns information, over dial-up connections back to the Jeddah-based head office. “But the old system often led to inaccurate, duplicated or inconsistent information,” comments Mosali. “It was clear that we had to bring better control to the supply chain.”
The deployment of IFS’ distribution module required the food manufacturing business to alter its internal business relationships between the Jeddah-based head office and the nine supplier outlets. The head office assumed the role of internal supplier to the warehousing outlets, and in turn the nine branch operations began to take a greater responsibility for their own stock levels. The management also introduced the concept of a ‘re-order point,’ which referred to the quantity of particular item in the warehouse. Based on an internal formula developed by the management, each branch office produces demand reports and from there, each warehouse can submit the quantity to the head office. “Through IFS we can now look at all the stock reports across the entire group and treat the warehouses like our own internal customers,” says Mosali. “We also have an accurate idea of the level of stock we’re holding around the country, and we can move stock across the country if and when we need it,” explains Mosali.
But generating consistent and accurate information within the distribution operation wasn’t enough — Al Halwani also had to devise a more reliable method of transferring stock data back to the head office. With leased lines still “very expensive,” says Mosali, the business had to find a cheap, but reliable alternative. The solution was to hire one leased line that went directly to a Jeddah based ISP.
All nine warehousing outlets now dial into that one ISP and access the solitary leased line. “The solution works very well — it’s cheaper than nine leased lines and its reliable,” adds Mosali.
With the distribution module in place, Al Halwani Bros. is now able to generate accurate reports quickly. For example, the senior management team can produce comparison reports, sales budget forecasts and better plan the production of goods from its series of factories in and around the Western province. “We’re able to study our stock information in a logical manner and [consequently] manage our stock levels better,” says Mosali.
The streamlined distribution operation and the parallel rollout of IFS financials module also enables Al Halwani to rapidly close its books. Previously closing the books at the end of each financial year would take up the vast majority of the first quarter. “Now the whole process is done within just three weeks for the whole company,” comments Mosali.
With the distribution and financials modules rolled out, Al Halwani has been tackling its manufacturing operation. The trading company currently runs 12 factories producing and packaging various ranges of goods. The business has just gone live with a comprehensive rollout of IFS manufacturing module in its processed cheese factory. The project has included a comprehensive study of its entire manufacturing process — from the ingredients delivery, to machine capacity and even packaging.
“The early pilots in January and February of this year have been very successful,” explains Mosali. “The manufacturing module shows us which items are profitable and which are more expensive. This allows the management to decide whether certain items are worth carrying on,” he adds.
The manufacturing model is directly interfaced into the financials model, enabling a complete cost model of the entire manufacturing process to be compiled.
The IT team under Mosali is currently studying the business processes of its other manufacturing facilities in preparation of a broader rollout of IFS’ manufacturing model.
Further development plans also include the deployment of bar code readers across Al Halwani’s 150 van fleet, to provide accurate and up to the minute delivery information.