Case Study:
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Background:
Munson's Pickles and Preserves Farm is a distribution company that supplies pickles, preserves, pickling supplies, and accessory products to local farmers' markets as well as grocers. Munson's Pickles and Preserves Farm does not produce or provide canning services for any items.
Current Environment
Munson's Pickles and Preserves Farm has an accounting system that is disconnected from the warehousing system. This has caused issues with controlling and valuing inventory. With these core drivers, Munson's Pickles and Preserves Farm decides to implement Dynamics 365 Finance and Dynamics 365 Supply Chain Management.
Warehousing
Munson's Pickles and Preserves Farm has a single warehouse that serves as the distribution center for all products.
The warehouse has bulk locations as well as racking, but location names and numbers do not exist.
Bulk locations are for storage of extra inventory that will not fit into the picking locations.
The warehouse is temperature-controlled, with locations grouped into two zones: refrigerated and non-perishable.
Inventory adjustments are made regularly due to lack of inventory controls.
Inventory Data
Item numbers are inconsistent and were set up as "smart-numbering," such as 1-23-PKL and 44-24-PICK.
Cucumbers are not grown by Munson's Pickles and Preserves Farm and may be sourced from local farmers.
Pickles come in bottle sizes of 8 oz, 16 oz, 32 oz. The bottles are packed in cases.
Pickles may be spear, chip, or whole shapes within the bottles. This does not impact the cost of the pickles when they are the same flavor.
Pickle flavors are sweet, spicy, and dill. The flavors vary in price.
Preserves come in multiple flavors, such as mango, strawberry, and grape. These are seasonal items only.
Due to the varying flavors and quantities, the preserves are owned by the vendor until they are sold. The mango preserves require refrigeration. The other preserves do not require refrigeration.
Many items are sold as accessories or supplies for pickling.
Some items within inventory have an expiration date, such as vinegar.
Fast-moving items are identified by inventory turns per quarter. Sweet and spicy pickles are the most popular.
Purchasing and Sales
Munson's Pickles and Preserves Farm has an online store that can be found at munsonspicklesandpreservesfarm.com.
The online store is limited to a subset of products that are accessories only, such as bottles and jars.
A new product line of kosher pickles is going to be distributed by Munson's Pickles and Preserves Farm.
VendorA is the largest vendor that Munson's Pickles and Preserves Farm buys products from. Munson's
Pickles and Preserves Farm's second largest vendor is VendorB.
Requirements
Warehousing
The warehouse manager requires fast-moving items to be easily accessible to the order pickers in AisleA,
with no more than one item per bin location in AisleA. Both sweet and spicy pickles have more inventory than will fit in AisleA, resulting in bulk location storage.
- Spicy pickles must have no less than half of a pallet in AisleA at any time.
- Sweet pickles must have enough inventory in AisleA prior to creating waves for warehouse work.
Strawberry preserves are selling slowly this season. They are put away in higher bin locations because they are not considered fast-moving items
Inventory & Data
Item numbers must be set up to create a streamlined numbering system. Munson's Pickles and Preserves
Farm requires that the old item number be stored in Dynamics 365 for cross reference purposes. Munson's Pickles and Preserves Farm has settled on 0000001 as the item format for pickles instead of 1-23-PKL.
PKL will be stored as an attribute.
Item numbers for pickles must be consolidated where possible into a single item number, regardless of bottle size.
Cucumbers must be sold at actual cost because they are a special order.
Kosher pickles must be set up in the item master. The kosher pickles are the same size jars and flavors as the other pickles, except that they have a kosher designation and will be slightly more expensive.
Vinegar and other perishable items must have date tracking for the manufacturer's batch number and expiration date of the product.
A batch of mango preserves had to be thrown away because the warehouse workers put away the product into the non-perishable zone.
Purchasing & Sales
Cucumbers must be sourced from local vendors for special orders only.
Munson's Pickles and Preserves Farm recently signed an exclusivity agreement with VendorA, and buyers must now only purchase from VendorA.
VendorA recently purchased a competitor company, VendorB. VendorA wants to ensure that all agreements with VendorA also apply to VendorB while they work on merging the two companies into one.
VendorC sells preserves to Munson's Pickles and Preserves Farm and requires the following:
- Shipment requirement: VendorC owns the product after shipment to Munson's Pickles and Preserves Farm until the time of sale.
- On-hand requirement: VendorC has access to view on-hand preserve inventory at Munson's Pickles and Preserves Farm warehouse.
Issues:
CustomerD reports that the vinegar they ordered had a week left before it expired when they received it.
This did not give CustomerD enough time to use the vinegar before they had to dispose of it. CustomerD
now requires that all vinegar has more than 30 days left before the expiration date.
A customer calls and states that they ordered kosher pickles and received regular pickles. Inventory Control
Clerk 2 reports that kosher and non-kosher pickles of the same variety are in the same warehouse location, contributing to the picking errors.
A salesperson reports that the margin is incorrect on a customer's special order because the cucumber cost was for the most recent receipt of cucumbers, not the cucumbers received for the specific customer order.
An internal audit revealed that large quantities of pickles were missing and written off as damaged on multiple occasions cover the past year. No documentation or explanation of the write offs exist. There is no documentation of disposal, and no approval from management to substantiate that the pickles were not stolen.
Jars of pickles are received as eaches. Case counts of pickle jars vary by size:
- 8 oz jars are 12 per case
- 16 oz jars are 6 per case
- The varied counts in each case create overhead in the warehouse.
The receiving clerk in the warehouse wants to ensure that broken bottles of vinegar are moved to a damage location named LocationA. Expired vinegar should be moved to a return-to-vendor location named LocationB. All other vinegar should be put away and sold according to normal location directives.
Operator1 is picking a pallet of strawberry preserves from a location to the shipping dock.
While picking up the pallet, Operator1 drops the pallet. Operator1 must make sure that the strawberry preserves are not available for shipment until the damage is evaluated.
Operator2 tries to print wave labels that contain item 0000001. The labels start to print and then jam. At the same time, the printer battery needs to be recharged and the labels need to be reprinted.