Juice Harvest Matches ERP to Growth

Founded by Jimmy Rosenberg, the creator of the popular Naked Juice Company, Juice Harvest is serious about putting freshness ahead of long shelf life, increased profits or any other priority that other food companies might treasure. From its mantra of producing "the freshest, purest and most delicious healthy foods imaginable" to its founder's insistence on tasting juice samples daily to ensure quality and consistency, Juice Harvest's commitment to freshness and quality has earned the company an impeccable reputation. It has also led to annual sales growth of 25 percent to 28 percent without marketing or advertising. Today, many of the largest big box and specialty retailers carry Juice Harvest's wide assortment of juices, cut fruit and vegetables across their Western U.S. stores.

 

When Ricki Reves, Juice Harvest's chief financial officer, was hired in 2003, her first challenge was a big one. The company's ERP system, designed for a discrete manufacturing environment, was unsuitable for process manufacturing. And because the accounting portion of the system had not yet been implemented, Juice Harvest was tracking everything from financial statements to check runs on spreadsheets.

 

"Nothing in the system tied together. So that became our main focus -- to re-implement the system," says Reves. Although both Reves and Derek Christensen, IT director for Juice Harvest, knew that the current ERP system had inadequacies, they wanted to completely implement it to fully evaluate its shortcomings. They also knew that working with the system -- however flawed it was -- would help them to identify what they really needed in an ERP system.

 

But soon after fully implementing the software, Christensen discovered that it was simply unable to handle the large volume of data Juice Harvest needed to process on a daily basis. "With our rapid and consistent business growth, this became a real issue," says Christensen.Challenges included:

 

- Poor Cost Accuracy

Another challenge for Juice Harvest was poor visibility into product cost. The system's focus on discrete manufacturing prevented the company from having a clear understanding of what it cost to make its products. Management wouldn't know how much a job cost until a month-end inventory was performed and inventory was reconciled in the system. "Our president never trusted any of the numbers," says Reves. "He always questioned -- and understandably so -- their accuracy."

 

Due to the nature of its business, Juice Harvest is highly reliant on accurate yield reporting. However, the existing system wasn't designed to recognize the concept of yield. According to Reves, the job ticket structure didn't even allow any deviation in recipes. This presented a number of problems, considering the company's emphasis on fresh produce and the fact recipes and yields can change on a day-to-day basis.

The software also lacked the ability to track product expiration -- another challenge for a company that had made "freshness" a cornerstone of its business. "Most of our raw materials have to be used within two or three days," explains Christensen. "We were attempting to track inventory expiration dates with spreadsheets, but that was a mess. It was leading to a high level of waste."Moreover, Juice Harvest found itself struggling with unit of measurement conversion issues. The system forced the company to track everything in pounds, even if it wasn't practical to inventory product that way.

 

When the FDA issued its mandate on lot traceability, both Reves and Christensen knew they had hit a wall with their existing ERP system. "The software couldn't enable efficient lot traceability," says Reves. "Mock recalls were a manual effort involving multiple spreadsheets, and employees had to manually pull out and sort through shipping documents, which was time consuming and error prone."

 

Reves and Christensen set out to find a replacement solution. Their most important requirement was to find a vendor with a strong background in food and beverage manufacturing. They immediately eliminated companies offering only discrete manufacturing systems, even those that offered process manufacturing modules. According to Christensen, every road he followed led to Ross -- a solution that became more obvious a choice the more research he conducted.

 

Juice Harvest purchased Ross ERP in December 2005 and went live on all core ERP modules in September 2006. Even with a small window of opportunity for a major software implementation, Juice Harvest transitioned to Ross without missing one day of production and without customers noticing the change. "That's key, because if we would have had to stockpile our product to make up for three or four days of downtime, that would be undermining the ultimate goal of this company," says Christensen.

 

In 2005, with the previous ERP system, the throughput was 44,137 pounds of product. Currently using Ross ERP the average throughput for 2007 is 70,113. This is a 59 percent increase of product going to our customers around the country. The old ERP system was faulty because it couldn't handle the amount of data needed to help Juice Harvest factory and product managers make timely decisions. But in just two short years of implementation, Ross ERP has been able to improve the data distribution and increase product by about 60 percent.

 

Additional results include:

In terms of mock recalls, what used to be a manual process is now almost completely automated. According to Reves, mock recalls now take less than one hour where the previous system had required five to seven senior managers and almost an entire work-day. Reves expects this process to improve even further once she implements Ross' data collection solution.

 

Juice Harvest can face customers' audit teams with confidence, knowing its ERP system can enable the kind of process excellence customers expect. "We were recently audited by Primus, who conducts fresh produce audits for a number of the largest retailers in the United States," says Reves. "We received a 98 percent score, which is outstanding."Thanks to its improved operational performance, Juice Harvest was also able to recently add a division of the world's fifth-largest retailer -- as a new customer. "This is business we would absolutely not have been able to secure without Ross," says Reves.

 

Reves comments that before Ross Juice Harvest couldn't assign labor costs or overhead to specific products. Unsure how increased production would affect profitability, the company's president was often reluctant to seek additional customers. With Ross now in place, product cost accuracy has improved dramatically, enabling improved decision making and new business growth."Since going live on Ross, our president has never questioned the validity of the numbers," says Reves. "With more accurate information, we can now grow unimpeded -- without worrying about the impact to margins or worrying about a drop in quality."

 

Because Juice Harvest insists on only the freshest ingredients, it will reject raw materials that don't meet its standards, even if production has already been scheduled. This often requires last-minute recipe adjustments or substitutions -- a process that the previous ERP system couldn't manage without tedious adjustments to the bill of materials.With Ross, Juice Harvest can store alternative ingredients and multiple versions of the same recipe, enabling the shop floor to make instant ingredient adjustments or substitutions.

 

Juice Harvest can now capture inventory data in near real time and run hourly or daily reports. This allows its quality assurance department to act proactively when raw materials need to be used immediately or changes need to be made. "It's completely changed how we handle and manage inventory," says Reves.Production can also better manage the catch weight of raw materials, decreasing the amount of inventory adjustments Juice Harvest has to make on a monthly basis from an average of 12 percent to less than 2 percent of inventory.

 

Reves and Christensen both comment that they are eager to expand Ross ERP beyond its core ERP functionality with Ross' data collection solution, Sales EPM (enterprise performance management), Finance EPM and demand planning."Ross has provided us with a solid foundation for continued success," says Christensen. "As we continue to grow, it's good to know that Ross' family of complementary applications was built from the ground up to work together and be deployed rapidly."