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Sowing the Seeds

Sowing the Seeds

It is hard to believe that a few slats of wood hammered together with nails could be the source of major headaches and financial heartache for the management of one of Australia's largest logistics companies.

In Part One of this continuing series, CIO visited Moraitis and CIO Con Colovos in May with "Vegetable Soup(ed) Up". Colovos, with full executive support, had led the fruit and vegetable giant through the challenge of an extensive IT makeover - but there's much yet to do . . . Moraitis recently selected its new ERP system and now the team has until February next year to get phase one of the $3 million program up and running.

It is hard to believe that a few slats of wood hammered together with nails could be the source of major headaches and financial heartache for the management of one of Australia's largest logistics companies - Brambles. Until the recent restructuring of the CHEP pallets division, however, Brambles was losing a river of revenues as its pallets - those wood and nail constructions - disappeared, were misappropriated or more often were simply not being collected for recycling.

CHEP supplies pallets to fruit and vegetable giant Moraitis and, at a meeting in May, told the management of the company that it could not find $100,000 worth of pallets that Moraitis had been using. Looking for a better way to manage the problem in the future, Moraitis management called in CIO Con Colovos, who was about to begin the rollout of a new ERP information system. Colovos immediately suggested that the pallets be barcoded, and that information from those barcodes be integrated into Moraitis's information system so that it could easily identify and locate individual pallets. Packaging and recycling giant Visy already uses barcoding on the packaging it supplies to Moraitis, so why not CHEP?

It is a pragmatic solution to a prickly supply chain problem - one of many the Moraitis IT team is tackling.

Colovos was hired in 2001 to overhaul Moraitis's information systems. Although the company had spent about $1 million installing a TIMS information system, it had scant infrastructure and poor support, and limited management information was available from the system. But in a fiercely competed sector Moraitis knew information technology could be a valuable ally. Since joining the company Colovos has been building up computer infrastructure, networks and IT skills in the company, and is now about to install the first stage of a new ERP.

On the same day that the CHEP team was in with Moraitis management, Colovos was signing off on a $900,000 deal with Dialog that was to supply and help install Microsoft's Navision system, and ordering four IBM rack-mounted servers that would run the software. What he and his team understood, though, was that with the selection of the system completed and the contract inked, the easy bit was over. Now came the rollout of an entirely new system and the reformation of many processes that the largely blue-collar workforce had been comfortable with for years.

"Change management is going to be the biggest issue," says Colovos. "In wholesale we have people sitting there who take an order, which might be that 'we need a semitrailer of this produce taken to Coles. They then raise a paper order, then a picking slip, which is given to the labourers who pick and stack the produce. It then moves to the outside and it's ready to go." The current system works, but the information trail is on paper or in people's heads and there is no way of tracking the efficiency of the process or allowing management to understand their business in anything approaching real time.

ERP specialist Yvette Elliston who joined Moraitis three years ago to help run the TIMS system feels she now understands the culture of the workplace and believes "change management has to be the number one goal". Program manager Lillian Salib, who has been with the company a little over a year, agrees. "That's where the biggest problem will come," she says. "This is a system that works and it's fast and [they'll say:] 'Now you want me to put an order in and scan it'. "

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