The Company: About Rudy’s Tortillas
Rudy’s Tortillas is a 65-year-old, family-owned company that sells primarily to restaurant chains in 35 states. The company has seen accelerated growth over the past decade as demand for its premium quality corn and flour tortillas has increased.
To keep up with demand, Rudy’s Tortillas has updated its plant with modern machinery, but the time-honored process remains the same. Rudy’s Tortillas recognizes the value technology brings to its operation and it recently implemented Sage ERP X3 to help streamline its operations.
The Situation: Developing Information Technology
Like many growing companies, Rudy’s Tortillas was more focused on building its business than on developing information technology. Production and inventory were managed in spreadsheets while customer service, purchasing, and accounting were managed with basic accounting software. “There was zero integration between the systems, and as a result, we were lacking the meaningful data necessary to run a successful business,” recalls Chuck Langenhop, CFO of the company. “We could not easily tell what stock we had on hand or what we needed to produce based on customer demand. There were delays in finalizing monthly financial statements and cost analysis was a time-consuming process.”
The Solution: Sage X3 ERP
Langenhop and CEO Louis Guerra launched a full-scale review of available business management solutions that could handle core accounting and inventory tasks and also could support the company’s process manufacturing. Eleven ERP and accounting systems were considered or evaluated. “We found that a robust ERP solution with built-in process manufacturing capabilities is the exception, not the rule,” explains Langenhop. “Many midmarket ERP systems support the needs of discrete manufacturing but require a third-party add-on for batch management.”
Rudy’s Tortillas ultimately selected Sage ERP X3. “We like the look and feel, we appreciate the end-to-end integration, and we recognize that it is widely used in the food industry,” explains Langenhop. “Sage ERP X3 represents the best features of all the products. It is a solid ERP and manufacturing system at a competitive price point.”
The Results: Sage X3 ERP Implementation Benefits
Effective Requirements Planning
Visibility into demand helps the company schedule both purchasing and production based on facts and not just experience. “The MRP function helps us look ahead and see what sales orders must ship next week. It suggests both purchase orders and work orders to fulfill customers’ expectations. For example, when we see demand slowing, we can delay our orders of packaging materials,” says Langenhop. “Now we are able to synchronize our purchasing and production functions to ensure that we have adequate stock on hand and also avoid the perishability risk of excess stock.” As a result of strategic purchasing decisions and production insights facilitated by Sage ERP X3, the company has increased the number of inventory turns and has reduced the average days on hand for its products.
Sage ERP X3 has online screens as well as reports to provide a detailed analysis of inventory levels and agings. “With these tools, our warehouse and production teams collaborate to adjust work orders,” explains Langenhop. “As a result, we have less waste than before and that boosts our gross margin.”
The collaboration between departments benefits the entire organization. “Everyone is working from the same integrated data set and is more keenly aware now of what other departments are doing,” Langenhop notes.
Improved Cash Flow
Cash flow has also improved. Invoices are sent electronically the moment they are generated, resulting in quicker payment. “We also have better screens and reports that help us identify accounts that are slow to pay or past due,” says Langenhop. “We can tag invoices with a resolution code, such as damaged in shipment. That designation helps ensure we are not spending time trying to collect on a past due amount that is being addressed by another department.”
While the company was always responsive to customers’ lot tracking requirements, Langenhop notes that the old paper-based system required a separate manual filing system. “It is so much simpler now,” he says. “In the event of a customer issue, we have online traceability. Plus, our QC manager can perform analyses of testing results and quickly identify areas where we can improve formulations or processes.”
It’s a Wrap
“We are confident that we can continue to grow the business with
Sage ERP X3,” concludes Langenhop. “It was the right move.”