Case Study: Organic Valley Family of Farms
Solution: Infor Adage / Infor SCM
Product: Adage AP / AS
Industry: Food & Beverage
Revenue: US 527 Million
About the company
Organic Valley Family of Farms is the largest US cooperative of organic farmers and one of
the nation's leading organic brands. Today, it represents over 1,300 family farms in 34
states and Canada. Focused on its founding mission of keeping small and mid-sized
farmers farming, Organic Valley produces over 200 organic foods, including organic milk,
soy, cheese, butter, spreads, creams, eggs, produce, juice, and meats, which are sold in
supermarkets, natural foods stores, and food cooperatives, and as ingredients for other
organic food manufacturers nationwide.
Organic Valley is probably best described as a marketing and distribution cooperative and
virtual manufacturer. Organic Valley owns only one butter plant and a small “cut and wrap”
cheese operation, and contracts with more than 85 fluid dairy, cheese, and other plants
across the country for the majority of its manufacturing. The cooperative also provides
third-party distribution and freight forwarding services to other organic and natural food
companies through its Organic Logistics Company, and markets its meat products under
the Organic Prairie brand.
Setting the strategy
With an annual growth rate over 25%, Organic Valley needed to consolidate its disparate systems into one enterprise solution to improve operating efficiencies and maintain the high quality of its line of perishable food products. “We were doing our planning using spreadsheets and an enterprise system designed for discrete manufacturing to handle our financials, order management, and inventory,” explains George Neill, director of IT, Organic Valley Family of Farms. “One of the biggest challenges for Organic Valley has been managing our growth in the face of increasing competition from larger companies. As our operations expanded, it became obvious that we needed to make a major leap in our business systems.”
Because of its business model and focus on the food industry, Organic Valley had unique requirements. The company has a push business model, which guarantees it will buy a specified quantity of milk or other products at a set price from member farmers. The cooperative then purchases production capacity from manufacturing partners located relatively close to its farmers, managing the supply process so milk and other materials arrive at the right plant at the scheduled production time. In addition to standard process manufacturing capabilities and sophisticated advanced planning capabilities to support its push business model, Organic Valley also needed a solution with enough flexibility and versatility to manage the company’s dairy, produce, meat, and egg lines of business, all of which have different and unique requirements.
Getting business specific
Organic Valley chose to leverage the solutions offered by Infor™: Infor ERP Adage as its core enterprise resource planning solution, along with Infor SCM Advanced Planner (AP) and Infor SCM Advanced Scheduler (AS) to meet the company’s extraordinary planning challenges. “We enlisted the support of a consultant during our selection process to help us as we identified which functions and features were the most important,” Neill explains. After narrowing the field to three possible vendors, Organic Valley and its consultant agreed that Infor’s solutions were the best fit for its business. “We had very specific requirements like shelf-life management and expiration date management. As we went through the
evaluation process, Infor came out on top in every area,”he says. “It was clear that Infor understood our unique requirements and had the business-specific functionality necessary for us to meet our goals.” The combined Infor solution enables Organic Valley to meet its production, financial, and reporting requirements.
Neill notes that the Organic Valley senior management team was a little apprehensive about taking on such a complex ERP implementation at the same time the company was building and moving into a new
headquarters building to support the nearly 25% annual growth. “I had watched many ERP implementations before, and with our project manager as the only person with hands-on implementation experience, we understood the potential challenges,” he says. “But I must say implementation of the Infor solutions was really very smooth. There are always challenges in any implementation of this scale, but Infor was with us every step of the way and has always made resources available when we really need them.”
As an example of Infor’s responsiveness, Neill cites the commitment Infor demonstrated during the go-live. “We went live on New Year’s Day, and the Infor team was here with us,” he says. One of Organic Valley’s major business drivers was to improve overall utilization of its resources by improving and
automating operational planning processes. The company gained a huge advantage by selecting Infor products, according to Neill, because the planning and scheduling tools are supported by the same vendor and require no code customization, which minimizes risks during upgrades. In addition, the company was able to use the Infor SCM planning solutions to model its supply planning needs. “The Advanced Planner tool really is the golden ring for us in pulling together supply and demand plans to
optimize the manufacturing and distribution of all our dairy, meat, and produce products nationwide,” says Neill. Infor ERP Adage and the supply chain planning solutions have produced significant and far-reaching business benefits. “The Infor solution has enabled us to be much more agile on the technical side, and this has given us the ability to support our rapid business growth,” Neill says. “With the Infor solution, we’re projecting a savings of $2 million per year through improved supply chain planning
and other operational efficiencies. “We now have one integrated system to support all business processes across all of our lines of business,” he continues. Because of the efficiencies of the Infor solution, Organic Valley has been able to slow the rate of growth of its workforce while sustaining its overall revenue growth, seeing an increase in sales per employee of 37% since implementation.
“There is an enormous amount of planning and organization that goes into establishing and maintaining our network of certified organic farmers and production facilities close to our farmers,” he explains. “The planning engine is proving ideal for helping us meet these challenging business requirements.”
Doing business better
In the future, Organic Valley plans to move to the next version of Infor ERP Adage and is evaluating other Infor solutions and technologies to support its business. “I’m incredibly excited about Infor Open SOA (service-oriented architecture) and how it can enable us to make a leap forward in how we manage integrations,” Neill says. “We feel like we have a good partner in Infor,” he says. “They continue to add new capabilities to the software, and the company is continually getting stronger. As we evaluate
additional software options, we find it incredibly valuable to immediately include Infor as a vendor because we believe it offers not just ‘good enough’ packages, but best-of-breed solutions—even for small companies.”