Oberweis Dairy, Cream of the crop

Manufacturing in Action, Source : The Manufacturer US

Regional dairy producer Oberweis Dairy uses modern technology to improve safety and preserve consistency in its dairy production. Linda Seid Frembes reports

Say what you will about today’s global economy and the ability to purchase goods made halfway around the world, but there is still nothing like the taste of locally produced dairy milk and ice cream. Oberweis Dairy, based in North Aurora, IL, buys its milk from 40 family-owned farms and ships it to its dairy production facility via milk tanker trucks. Approximately 90 percent comes from southern Wisconsin and

10 percent from northern Illinois.

The company currently operates 37 company-owned and five franchise retail stores in Wisconsin, Illinois, Missouri, and Indiana where customers can buy milk, yogurt, cheese, eggs, bacon, and ice cream; more stores will soon open in Michigan and Kansas. In addition, Oberweis sells to over 700 traditional supermarkets. The company has enjoyed 10 to 30 percent annual growth, due in part to its commitment to quality and customer service.

Oberweis Dairy began in 1915 when Peter J. Oberweis found he had too much milk, so he began selling it to neighbors. In 1927 the company began home delivery of its products, and today that service has grown to over 35,000 homes in four states. “The milk production facility makes milk the same way we did in 1927,” says Bob Renaut, president and CEO of Oberweis Dairy. “All production is done in North Aurora in our facility built in 1996. It’s the newest milk production facility in the Midwest over the last 30 years.”

The major difference is that the Oberweis facility is designed to protect the flavor of milk, while competitors’ facilities are usually designed for high volume and low-cost processing. According to Renaut, Oberweis Dairy buys the top 5 percent of quality milk, based on somatic cell count. “The federal government mandates 750,000 somatic cells per milliliter, but we allow 250,000; the average is about 110,000,” he explains. “We pay our farmers a premium for top-quality product.”

Oberweis Dairy’s processes take longer and require less heating, but customers experience the difference in better flavor in the milk and ice cream. Renaut adds, “We pasteurize the milk at above the federal requirement but below what the competition does; less heat means less change in taste. We get milk to market faster, and the fact that we start with top-quality ingredients means less bacteria to begin with. Contrary to national statistics, our fat-free milk is our best-selling product, representing 50 percent of sales, and it isn’t blue or gray. We differentiate on flavor.”

That commitment to better flavor starts on the farm, where Oberweis Dairy employs a full-time farm manager whose sole responsibility is to work with producers to provide the best care for the cows. “We believe in humane treatment of cows, and our cows are not chained to stalls all day. We also oppose the use of the Recombinant Bovine Growth Hormone (rBGH) that artificially stimulates milk production,” says Renaut. “However, we’re not fully organic, since that would add another dollar in price to every half gallon in order to acquire the certification. Our process allows farmers to give the cows antibiotics when they become sick, but they must test clear of antibiotics three times before rejoining the herd. In the meantime, our dairy pays for the lost milk production, so the farmer is not losing revenue.”

Each tanker arriving at the dairy is also tested for the presence of antibiotics. If a shipment tests positive, it is rejected. The farms and farm manager work closely to identify which specific farm and which specific animal provided the milk that tested positive. Until the company is assured that the cow’s milk no longer tests positive, it will not accept a shipment of milk from that farm.

Modern manufacturing technology deployed at the milk production facility results in less variability and more consistency through the use of computer controls, especially for ice cream production. The ability to accurately monitor the milk fat helps maintain quality and consistency. Automation has allowed the dairy to keep the same number of employees as 10 years ago while increasing milk production fivefold.

Technology also helps with safety issues, resulting in more than seven years without a lost-time injury. “We use glass bottles for our milk so as not to impart a plastic taste. Robots take the glass bottles out of the cases and put them into the bottle washer. Also, robots are used to pull the full bottles from the line and put them back into cases. The use of robots cuts down on repetitive-motion injuries.”

On the logistics side of the business, Oberweis owns the fleet and over-the-road trucks. Customer orders are managed using computer software that was written in the 1970s and runs on an IBM AS/400. Renaut noted that although it’s older software, several updates have made it more user-friendly. For example, customers can go online and send their orders to the dairy.

A software developer also has helped the company with dynamic routing software. Oberweis delivery drivers make 160 stops a day. “We modified Microsoft MapPoint for dynamic routing, since it is basically a new route for the driver each day. We also use handhelds to keep track of orders; the driver can make notations of product added, deleted, and any comments,” says Renaut.

Currently, the company is installing GPS units into the trucks so it can track and monitor drivers’ locations and where they are on their routes.

Looking ahead, Renaut adds, “The future is very bright for those not competing with generic milk. We aren’t the cheapest, but we offer a better value proposition to the customer based on taste. We’re not looking to become a national company. Rather, we will grow by providing our customers with the best dairy products possible.”

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