When Pan-O-Gold Baking Co. searched for new ways to improve and streamline its operations as well as lower its overhead four years ago, the company targeted its shipping department. While production at its three Midwestern facilities was highly automated, the bakeries relied on a functional, yet labor-intensive paper system that had been developed over the years to assemble products at the automated packaging area, sort them by route and depot and put them on trailers for distribution.

In fact, at Pan-O-Gold’s flagship plant in St. Cloud, MN, three high-speed production lines today produce more than 600 SKUs of bread, bun and rolls that are sold as premium brands, private label products and to food service customers. Until about two years ago, production was automated all the way through basket loading and stacking, but at that point, the shipping staff often had to sort through 6 to 8 pages of tracking sheets to determine how much product went on each route and in which trailers, said Bob Gartland, vice-president of engineering and transportation for Pan-O-Gold. The shippers also wasted time manually adjusting orders, waiting for certain items to be produced and walking unnecessarily between the production lines and some of the distant trailers docked at its huge warehouse.

At the 2007 International Baking Industry Exposition, Pan-O-Gold set out find a solution to organize its shipping department. In addition to streamlining warehouse operations, the company searched for a more precise and accountable order fulfillment process.

“We wanted it to be effi cient,” Mr. Gartland said. “We wanted to use the latest and fastest technology available, and it has to be customized to fit our needs.”

Pan-O-Gold selected the dispoTool paperless dispatching system from Tool-Box Software North America to integrate production and shipping at its St. Cloud bakery. “We found that ToolBox has a very comprehensive standard package, but it is also willing to do modifications that we desired or required,” he added.


According to Mr. Gartland, ToolBox personnel initially visited the St. Cloud facility to determine how the shipping department ran before developing software that integrated it into production.

Before tailoring the software to the bakery’s specifications, ToolBox collated SKUs and worked with Pan-O-Gold to ensure its accuracy and develop new SKUs for those non-retail items that didn’t have SKU numbers. “ToolBox was able to sequence the products on the screens the way we bake them” instead of just putting them in standard numerical order, Mr. Gartland said. In addition to strategically placing multi-color LED displays and touch-screen PLCs throughout the shipping department, Pan-O-Gold upgraded to a wireless option.

“With wireless, we’re using the same handhelds that we have been using on our routes for years,” Mr. Gartland said. “They’re rugged and fairly heavy, but they have the ability to scan the product’s UPC code. The shipper never has to go to a terminal to enter data. We have a minimal amount of wasted steps.”

Specifically, shippers start at the end of the packaging area, where they use the handhelds to scan the UPC code on a stack of baskets, and the system assigns it to a so-called “buffer” area. If food service items don’t have tags, they can be selected from a pop-down list on the handheld, which transmits the information to the printer at the end of each line. The tag is then attached and scanned before the stack is wheeled to the appropriate buffer area, which is responsible for supplying a designated number of shipping doors. As Pan-O-Gold gets ready to ship products, each route is assigned to a multi-color display. The displays, which are in rails between the loading doors, show the route number and have six additional color sections. Each shipper works on one specific color in his area. At the buffer, a shipper scans the stack tag, and the displays show each employee the quantities that are being staged for each route. The product is loaded onto trailers by route and transported to depots or directly to customers.

Prior to the transition, Pan-O-Gold spent several weeks “selling” the dispoTool system to employees, relying on their feedback to better integrate the system. About 18 months ago, Pan-O-Gold started up the shipping system. It spent four days testing the recently installed equipment to ensure it worked properly before it went “live” one shift at a time.

“We went live on one shift on Day No. 1, the second shift on Day No. 2, and the third shift on the third day,” Mr. Gartland recalled. “After one week, we didn’t have the ToolBox people around. We continued with some modifications after that, but the learning period and the floor implementation time were amazingly short.” Initially, communications errors and server issues occurred but have been solved quickly, he said. For instance, when a shipper tried to log in repeatedly with the wrong number, he locked up the system. But Mr. Gartland said that no information has gotten lost, and the longest downtime has been one hour.

In addition to saving labor, the dispoTool system provides more precise order fulfillment, which eliminates “unaccounted for” products thanks to the software’s exact counting procedures. The software also is designed to ensure that every route gets the exact product order. Pan-O-Gold often produces more product than is ordered to minimize shorting any customers. On a given day, if the bakery produces 2% more units of products, dispoTool makes sure each route gets the appropriate additional amount of products. Under the previous system, portioning out overproduction was a time-consuming process, and often “shortcuts” were taken, resulting in some routes getting no extra products while others received a lot more, according to Mr. Gartland.

The new shipping system continues to be a work in progress. “One of the neat things about this ToolBox system is that once our people became accustomed to all of the smaller intricacies, they have come up with ideas on making one small programming change to improve the result that we get either on the way we are entering data or the way we’re receiving it. ToolBox takes those suggestions, and it always responds positively,” he noted.

ToolBox also reviews logs to determine how the system is being used and works with Pan-O-Gold to make changes such as creating “exception reports” that track how shippers may slightly adjust orders online if they are replacing a damaged product before it’s loaded and distributed.

For the St. Cloud installation, the return on investment was one year. This was mainly achieved through saving time and eliminating errors. Pan-OGold subsequently rolled out ToolBox’s dispoTool system at its Sun Prairie, WI, bakery late last year, and the company is doing research to determine whether it should install the software at its smaller Fargo, ND, operation.

“We do some interplant exchanges, and if we have all three plants on the dispoTool, we can put the orders together in one plant and that order electronically transfers in the system to the other plants. We don’t have to count, recount and assemble and sort to reassemble later,” he explained. “We’ll only have to handle the product one time instead of the two times that we handle the product now.”

With the technological advances, Mr. Gartland added that the Fargo installation makes sense. “Now that the required computer technology has become so affordable and commonplace and the concept ToolBox uses is so simple to understand, it is definitely worth a look for any manufacturing plant,” he said.