Leuchtenberg Sauerkraut, founded in 1861, is Europe’s leading manufacturer of sauerkraut, red cabbage, and lacto-fermented green beans in flexible packaging. The company supplies its products to retailers in Germany (such as Metro, Rewe, and Globus), the Netherlands and Belgium. It employs a total of 70 staff, of which 55 work in production and 15 in administrative roles. Leuchtenberg implements a strict quality policy, which covers product and service aspects, internal company processes (certified in accordance with DIN EN ISO 9001) and observance of hygiene guidelines in accordance with the HACCP concept (Hazard Analysis and Critical Control Points).
EU Regulation demands future-proof software
The sauerkraut producer was also required to implement EU Regulation 178/2002 at the start of January 2005 to enable seamless documentation of the entire food production process and batch tracing. “There was no way our old system could have coped with this,” is how Joachim Küppers, MD at Leuchtenberg, describes the situation. This was because the company had previously been using a Unix-based stand-alone system that was specifically adapted to the company’s requirements and processes. “The drawback was that the system had to undergo costly and time-consuming adaptations to bring it into line with any new or amended legal requirements. Another problem that there was no computer-assisted production planning and control.”
In the fall of 2003, the management team decided to replace the old system with a future-proof, standardized, and cost-effective corporate solution with integrated production planning and control software that would fulfill the requirements of the EU Regulation when it came into force on January 1, 2005. “The software also had to improve our administrative and bookkeeping processes, enable rapid implementation, and permit data to be exchanged with our clients’ systems,” Küppers explains.
Mapping all company processes
The sauerkraut specialist scoured the market for suitable solutions. It shortlisted two solutions from other suppliers and SAP Business One in conjunction with the easyPlan production planning and control add-on from the SAP Solution Partner W-Concept. Leuchtenberg Sauerkraut opted for the SAP solution. “The solution enabled us to map all company processes, whether purchasing, sales, or production, transparently and consistently across the individual divisions,” is how Küppers explains the company’s decision.
Batch tracing was possible using the standard version of easyPlan, and mobile scanners in the form of PDAs could be connected to the add-on. This was important for Leuchtenberg as the large number of goods in and goods transfer movements (for instance for the final sauerkraut fermentation stage) meant that it was not possible to record the items, quantities, and batches manually. The software is also easy to operate and user friendly, a fact which won over both management and employees.
There’s nothing magic about rapid implementation
In order to tie up as few internal resources as possible, the company deployed a staggered implementation of the SAP SMB solution and the easyPlan production planning and control software, starting in January 2004. Leuchtenberg charged IT consultants CONSULT+SYSTEM G.R.O.U.P., a business partner of Steeb Anwendungssysteme, with the implementation of SAP Business One.
After a brief implementation period, Leuchtenberg went live with SAP Business One in March 2004. “A number of company-specific idiosyncrasies meant we had to make some adaptations that the standard version of SAP Business One didn’t cater for,” explains Winfried Fuchs, MD at CONSULT+SYSTEM. As well as forms and delivery notes, these also included discount scales with multi-tiered discounts, multi-step calculation and payment of commission, and an EDI link to retailer Metro. According to Joachim Küppers, one of the biggest challenges was converting the master and transaction data from the legacy system to SAP Business One, as this data was not available in a form that could be readily adopted. To resolve this issue, the Data Transfer Workbench (DTW) was used to convert the database contents and then feed them into SAP Business One. easyPlan was subsequently implemented by SAP Solution Partner W-Concept. This process also went extremely smoothly. At the present time, nine users at Leuchtenberg are working with SAP Business One and six with easyPlan.
Mobile recording, efficient planning
The Neuss-based food manufacturer was immediately able to exploit the benefits of the installed solutions. Using mobile scanners, PDAs with WLAN, and an integrated scanning unit, the employees at Leuchtenberg Sauerkraut are now able to record all movements of goods, from goods in through to picking for production. The system also generates an SSCC (Serial Shipping Container Code, known as NVE in Germany) with EAN-128 encoding, which is linked to the delivery notes from SAP Business One. “This enables us to trace batches back to the individual pallet,” Küppers explains. The data recorded by the mobile devices is posted daily and the corresponding warehouse transactions are performed in SAP Business One. “We can therefore keep track of all movements of goods at all times,” explains Küppers. As production data is mapped in full, this provides additional transparency for warehousing, for example. “Whereas we used to roughly estimate the goods required for a production run, we can now ascertain this precisely while an item is being manufactured,” states Küppers, describing the benefits. “This means we can determine materials planning, preliminary costing and purchasing exactly, which reduces costs.”
Managing the company reliably
The comprehensive information flows and the reporting functions integrated into SAP Business One provide management with business analyses and KPIs for profit and loss, cash flow, and liquidity “at the push of a button”. Küppers explains that the easy-to-use Drag&Relate and XML export functions can generate custom reports. “We can now evaluate stock levels exactly from a number of perspectives and manage future company planning better,” he says. In future, Leuchtenberg intends to classify sales figures on the basis of sales made per region. This will be done using a controlling solution which is integrated into SAP Business One.
Increased process speed – reduced costs
“Leuchtenberg Sauerkraut’s investment in SAP Business One and easyPlan has paid off in a variety of ways,” Küppers explains. Important data and transactions only need to be recorded once, which prevents duplication and increases data quality. This enabled the company to cut its administrative overhead, and correspondingly the amount of overtime worked, by 10 to 15 percent, “which reduced staff costs alone by around 10 percent,” Küppers proudly reports. In addition to this, the SAP software enabled the company to reduce its running IT operating costs (maintenance and upkeep) by between 15 and 20 percent in comparison to the legacy system.
Küppers’s conclusion is therefore entirely positive: “The SAP solutions give us control of all batches, enable us to structure our processes more transparently and accelerate them, and cut costs considerably. Additionally, this gives us the flexibility to continue to develop the outstanding quality of our products in accordance with the wishes of our consumers.”