Case Study

McCormick & Company


McCormick & Company is the International producer of spices, seasonings, flavorings, and specialty foods with a very broad product line that encompasses both the retail and industrial markets. In the retail division, the package engineering department has the responsibility to generate packaging specifications and disseminate them to the necessary functions including production, quality control, purchasing, etc. In the Industrial divisions, this job is usually handled by purchasing, QA, or manufacturing.

In the past, this was accomplished by producing written specifications on a word processor and distributing them through the internal mail system. This was very inefficient as it could take a week or more to disseminate the documents. There was also the possibility that they could be misplaced or would sit on someone's desk while they were on vacation or traveling. This made it necessary for the affected departments to field a huge number of inquiries and often resulted in the incorrect information being applied to the finished goods case, or the wrong packaging materials being used. The magnitude of this problem is hinted at by the fact that an average of 100 changes -- some of them naturally very small -- are made to specifications every day in our retail division.

OVERCOMING DIFFICULTIES

We have overcome these difficulties by installing a packaging specifications database in our retail division called PC-SPECS from Keene Systems, Inc., Dallas, Texas. We recently purchased a corporate license for the software in order to roll it out to our other divisions, both domestic and international. This software system easily manages complete specifications including CAD drawings, graphics and supporting text documents. Once entered into the system, material specification information is available over a local area network (LAN) instantaneously to users

in various departments, and is planned to soon be available to suppliers that need it as well. Results have included increased productivity and elimination of packaging errors.

The McCormick/Schilling Division is responsible for blending and packaging of the company's consumer products in the U.S. The division has two plants. One in Hunt Valley, Maryland and the other in Salinas, California. The SKU's that constitute the division's products each consist of a minimum of two different material components - typically several. Frequently, a single product is offered in more than one package format each of which requires a unique SKU number.

As the company has grown through acquisition and new products, the job of managing packaging material specifications has greatly expanded. In addition, the volume of information required to be maintained on each specification has increased over the years in response to various needs. For example, the company has embarked upon a vendor certification program which involves partnerships with key packaging suppliers that have demonstrated their ability to maintain the company's quality standards. This program has made it necessary to provide far more detailed specifications and drawings to the Procurement Department who maintains the certification program. The increased use of automated packaging machinery has also driven the need for more detailed specifications because more precise dimensional tolerances are needed to stay within the machine's operating capabilities.

A significant time lag was involved with the previous method of communicating specifications. Bill of Materials (BOM) information is maintained on a mainframe database which contains only item codes for the components rather than complete material specifications. Packaging component changes, which could be new items, discontinued items, or changes made by marketing or production, were printed out every day and provided to us. Package engineering was then responsible for creating the packaging specification which consisted of, at a bare minimum, generating date coding and pallet pattern instructions. The specification would be originally drafted on paper, submitted to a central word processing pool, sent back to be proofread, resubmitted to typing and finally printed and mailed. The entire process could easily take several weeks. With so many specifications and the time lag involved from creation to distribution it was not uncommon to produce a product to an old or obsolete specification. Specification management became a real issue!

Packaging engineers at the company had long recognized the problem but were not able to find a promising solution until they heard about PC-SPECS. This software package, which was just being introduced, was a personal computer-based program and database that specifically addressed documentation for packaging component and material specifications. The uniqueness of the product rests in its ability to seamlessly integrate information in multiple media formats, including CAD drawings, graphics and artwork, pallet diagrams and text-based support documents - in a multi-user environment into a single system. The package is sold as an off-the-shelf system with customization added as necessary to match existing control procedure requirements. Some of the features of the program include: 1) Records maintained of all changes made to specifications, 2) Searches can be made for specifications matching certain parameters which helps reduce duplication, 3) Specifications are maintained according to finished product

or individual components. 4) Control over user access is provided through the use of passwords and security access level assignments on an individual user basis, 5) Data for saved palletization software solution files can easily be imported into the system, and 6) An electronic signature capability for approval purposes is included, removing the need to route paper copies.

At the same time this software package was installed, McCormick's standard specification formats were upgraded to include about three times the amount of information that they held before. Working closely with Keene Systems personnel, a design was developed in order to interface the PC-SPECS system with McCormick's mainframe BOM system.

INTEGRATING BOM SYSTEM

In the beginning, the entire BOM database was exported from the mainframe in ASCII format and imported into PC-SPECS. Changes are then downloaded on a daily basis to keep the two databases synchronized. Those changes are then compared against the existing PC-SPECS database. For each specification which has changed either in the mainframe data or PC-SPECS, the specifications administrator is shown a discrepancy report which highlights the differences between the two system databases. With this capability, the administrator can detect potential errors in the mainframe database or spec system. An average of 100 valid finished good specification changes are made each day - which in turn equates to numerous individual component specification changes. Once the update process is complete, the PC-SPECS database is a mirror image of the mainframe database.

The specifications administrator also associates pallet arrangements, CAD files, and support documents with the specifications. This process saves a tremendous amount of time compared to the previous method of maintaining the paper specifications library. It is estimated that maintaining the upgraded specifications using the old approach would have required an increase in the specifications administration staff from one to as many as three. Instead, it was accomplished with no increase in manpower.

IMMEDIATE ACCESS

As soon as a specification is updated, the information is immediately available through a system of local and wide area networks that spans the division's office and plant locations. Thus, the need to distribute and maintain paper documents is eliminated. Anyone with the proper security authorization can access the specification in seconds on their computer. Providing production personnel with correct specifications on a real-time basis has eliminated production errors caused by outdated specifications. The plant also gets the benefit of being able to instantly view a CAD drawing of the package, palletization diagrams and related support documents which were rarely, available before. The quality control department also has easy access to the latest specifications and drawings which has helped to improve their certainty in inspecting incoming components and ensuring that all the appropriate materials are used during production. In combination, these changes have virtually eliminated production errors. The value of having a comprehensive, 100% accurate, on-line specifications database, however, goes far beyond the production and quality control departments.

When somebody in the graphics department needs to lay out a new label, they can easily call up the CAD drawing that depicts the blank label and instantly determine the printable area and any special requirements such as leaving an area blank for on-line date coding, thus expediting the package development process. When Sales obtains a new account, the assembly (finished goods) specification gives them case dimensions, weight, pallet patterns, etc., in order to plan the display arrangement or pass shipping information such as case cube on to the customer. This used to require a considerable amount of time to get the information - not to mention manual labor to maintain. The sales department then had to make the calculations themselves which raised the possibility of errors. Now, the information is calculated by the software and is available for immediate access through specially designed reports. A system expansion is being implemented whereby suppliers will be able to call into the database through a modem and access specifications to which they have been granted access by the security system. This will make it far easier for them to get the latest specifications. In the past, there were numerous occasions where incoming materials were rejected because suppliers were working from an outdated specification. Providing this information through the database has also saved a tremendous amount of time for package engineering, because the number of inquiries which the department is required to field has been substantially reduced.

The system has met or exceeded all of the initial goals for its implementation. Labor savings have been achieved by streamlining the specification creation and update process. Waste caused by producing products to the wrong or outdated specification has been eliminated. Inquiries related to specification information have been reduced which has allowed package engineering to spend additional time on cost savings, new products, and productivity improvement programs. Sales information is provided to the sales force in a more timely manner.

CORPORATE STANDARD

Because of the advantages that were achieved at our retail division, the system has been adopted as a corporate standard and plans have been made to expand the system to many of our domestic and international operating locations. The basic idea is to extend the benefits achieved at Hunt Valley on a company-wide basis. These include: 1) Substantially increasing the comprehensiveness of the specifications without increasing manpower; 2) Elimination of errors caused by using the wrong or no specifications; and 3) Providing information to the proper people on a more timely basis, thus expediting the overall production process!

Lance Keene

CEO - Keene Systems, Inc.

Lance@KeeneSystems.com

603-726-5058

Lance Keene

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