Supply chain issues dog Fonterra

SAP project has 'mind of its own'

Fonterra Brands New Zealand has apologised to supermarket shoppers for supply chain failures that have kept some of its popular cheese brands off the shelves.

The Independent Financial Review reported this morning that notices from the company's chief executive Peter McClure have been posted on the dairy shelves of Foodtown supermarkets, apologising to shoppers for the lack of product.

McClure told the Independent plant rationalisation and the installation of new SAP software at Fonterra’s manufacturing operations have caused significant disruption to supply.

“Unfortunately it’s not a quick fix,” he told the paper. “Sometimes new systems seem to have a mind of their own.”

McClure says the issues affected distribution and supply of Mainland, Galaxy and Kapiti cheeses. He was not prepared to estimate the loss in sales beyond saying it was a “reasonable number”.

The New Zealand Herald reported similar problems in Fonterra’s Western Australian operations recently, quoting one distributor who estimated the company had lost a fifth of its sales due to the glitches.

McClure says the New Zealand issues are not related to those across the ditch where different software is used. Fonterra attributed the Australian glitches to Oracle’s JD Edwards software which failed to recognise correct stock levels.

The New Zealand problems occurred in the manufacturing side of the business, which uses SAP, McClure says.

SAP says while its software is being used for the supply chain it was not involved in a recent project which it understands involved putting cheese products onto the same system being used to manage bulk milk.

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Tags Fonterra SAP supply chain JD Edwards Peter McClue

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