Reference no: EM132159330

Case Study, Eureka Pies Co.

Eureka Pies prides itself on its quality Eureka Pies Co. is an Australian family-owned pie manufacturer, established in 1914, and headquartered in Sydney. Eureka produces frozen pies for local and overseas customers, as well as fresh pies for schools and cafes in New South Wales. The company prides itself on its quality—pies are produced using fresh, locally-sourced ingredients—and has established itself as a household name over the past 100 years. Eureka has a family-oriented hiring culture. Eureka operates one manufacturing plant, in Wollongong, employing more than 240 workers. The plant produces approximately 25,000 pies and ships 150 pallets daily. Eureka also has sales offices in Melbourne and Brisbane, employing about 180 executives. Eureka has grown over the years, but has retained many of its traditional business processes. There has been little urgency to change existing processes, as the company has been highly profitable over the past 20 years. Most business processes are still manual, and there is little IT capacity within the company. Eureka relies on in-house ID systems such as MYOB Despite adopting barcoding technology in its operations, Eureka relies on in-house ID systems—the company had to develop translating tables to translate the numbers between its in-house ID system and the open ID GS1 system which its trading partners use. Transactions for sourcing, manufacturing, warehousing, billing, and invoicing are recorded manually on paper, and then input into Microsoft Excel spreadsheets. The company uses MYOB software for basic accounting needs. As the company grows, the number of transactions it needs to process has increased substantially. Individual departments have developed their own paper-based documentation processes, and kept their own spreadsheets. Information between departments is shared mostly via emails with spreadsheet attachments. Departments often have to manually reconcile transactions due to incorrect versions of shared spreadsheets. Pricing, distribution and inventory management are all done manually with spreadsheets. Inconsistent information and poor communication between departments has led to increasing occurrences of stock-outs and over-stocks in the past 24 months. The manufacturing plant often runs overtime to fulfil the shortage, and this increases operating costs. The sales team give generous discounts in order to salvage the value of overstocked products. Customers order frozen pies via email or telephone. Frozen pies are packed and stored in a holding area after production, and the sales and distribution team communicate directly with the contracted 3PL to collect and deliver the products nationally. Stocktaking is done manually before the 3PL arrives to pick-up Stocktaking is done manually before the 3PL arrives to pick-up to ensure the order is correct, and again after the 3PL leaves to determine the amount of inventory left in the holding area. Returns of goods have reached an all-time high recently, mainly due to incorrect goods being picked up. Daily orders for fresh pies are placed with the sales team from Monday to Friday, before 3:00pm. The dispatch orders are manually documented, photocopied and handed to the distribution team to be picked, packed and placed in the chiller overnight. Pies are loaded into Eureka’s in-house trucks and delivered to customers’ locations the next morning. The distribution team stocktakes fresh pies at least three times a day to ensure they have adequate stocks for incoming orders. There is no way to monitor how many fresh pies have been stored in the holding area. Stock-keeping multiple times per day has led to lower productivity and higher operating costs. Increasing stock-outs also force Eureka to request its contracted 3PL make multiple trips more frequently. This forces Eureka to maintain high prices of their goods, which hurts their competitive strength despite the quality and reputation of their products.

Question: Assume you are hired as an external consultant to provide solutions, and Eureka’s senior management want the problems to be fixed within the next 12 months. Your business solution should take into consideration: a) IT culture in Eureka b) Limited IT resources and c) A limited budget of $1 million AUD.