LOP & Alpro - Value of data presented at Supply Chain Innovations Event 2018
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Alpro is an international plant-based food and beverage company with a broad portfolio of products across multiple categories, countries, brands, and channels. It has experienced double-digit growth since 2013 through a segmented supply chain and manufacturing plants across Europe. The presentation discusses how Alpro can break through data silos and build a digital core to drive business value through revenue growth, asset efficiency, operating margin, and other factors. Specific use cases are presented for quality release time and scrap rates using data from Alpro's SAP system to identify improvements across its manufacturing sites.
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LOP & Alpro - Value of data presented at Supply Chain Innovations Event 2018
- 2. 2 Peter Decroos International Sr Supply Planning Manager, responsible for divisional SC planning Alpro Valérie Vandenbroucke Product Manager LightsOutPlanning Bluecrux Speakers
- 3. 3 Alpro key historical milestones
- 5. 5 Product Categories & Channels Multi-category • Drinks • PBAY • PBAC • Desserts • Margarines Multi-ingredient • Soy • Almond • Coconut • Cashew • Oat • Rice • Hazelnut • Macadamia Multi-country • EU4 • Nordics • South • CEE • Middle East Multi-brand Multi-channel • Retail • Health food • Out of Home • E-retail PL Net Sales (M€ ) 549 480 385 315 285 265257 239 20102009 20132012 20162015 BU2 2011 2014 From fresh to ambient and frozen products A segmented supply chain
- 6. 6 Alpro has a broad portfolio of products … 100% plant-based drinks 100% plant-based alternatives to cream 100% plant-based alternatives to yoghurt 100% plant-based margarines 100% plant-based desserts & ice cream 100% plant-based alternatives to quark
- 7. 7 Supply Chain Network Manufacturing Direct sales model: 6 EU markets+ Indirect sales channels: 50+ countries 3 manufacturing plants (BE, UK, FR) co-manufacturing and co-packing partners across Europe Interchangeability Sales Wevelgem Kettering Issenheim US - based
- 8. 8 Double digit growth since 2013 Net Sales (M€) 549 480 385 315 285 265257 239 20102009 20132012 20162015 BU2 2011 2014
- 10. 10 Break through data silos: build your digital core PLANNIN G DISTRIBUTIO N OPERATION S FINANCE CUSTOME R WORKFORC E DIGITALIZATIO N
- 11. Business value Revenue growth Asset efficiency Operating Margin Real estate & infrastructure Machine & Equipment Raw Mat inventory (Semi-)finished Inventory Order fulfillment Logistic & distribution costs Production Effectiveness Demand & supply mgt Price optimization E2E Margins Forward looking OTIF Digital Capacity Demand shaping Zero Scrap Visible Lead Times Anticipated Demand Dynamic fulfillment Connected production Smart supply Optimized financials Demand sensing Cumul Lead Times Network of networks Digital core How digital drives business value
- 12. Connect. Learn. Aim. Shine. Think big. Start small. Scale fast.
- 13. 13 Use cases, creating value from day 1!
- 15. 15 • Quality Release Time • Scrap Rates • Influencing factors From Data to Business Value #LeadTimeForMore DATA • SAP Movements • 4,55 GB • Jan ’15 – Feb ‘18 TECHNOLOGY Soy Beans Soy Drink factory Soy Drink Formulatio n Formulated bulk product Filling & packaging Secondary packed product Formulated bulk product Sterilizatio n Sterilize d flow Tetra packing Primary sealed packing 2nd packing Secondary packed product QC Released product
- 18. 18 Wevelgem
- 21. 21 Wevelgem Kettering Continuous sampling 2x/day sampling ≈ 0,5 DAY
- 22. 22 But what’s 0,5 day? Freshness is key !
- 23. 23 Takeaways after 1st use case Easy vs difficult Speed Lots of data KPIs
- 24. 24 What’s next? Systems ofRecord ERP (SAP) MES ELC External Data POS Shopper behavior Supply Planning Digital enablers Virtual Twin Smart Parameters S&OP MPS Demand …
- 25. Connect. Learn. Aim. Shine. Think big. Start small. Scale fast.
- 26. Visit us at booth 23 & discover what data can mean for you!
Notes de l'éditeur
- Peter: Thank you for chosing stream 4 : Value from Data. My name is Peter Decroos. I started my career @ Unilever Belgium in the IT department to move into a planning role. After 6 years I had the opportunity to work closer to my hometown and started at Alpro. An intereting journey of 12 years. Currently responsible with my team for the Master production scheduling and deployment planning of all finished products within Alpro. Valérie (30sec): My name is Valérie Vandenbroucke, work for Bluecrux, a consultancy company focused on supply chain & operations. I am product manager for LightsOutPlanning, which is our digital supply chain planning platform, and is one of the innovation products of Bluecrux. The case Peter & I will discuss today is built upon this LightsOutPlanning platform.
- Peter Alpro was founded by Philippe Vandemoortele in 1980. In 1989 the Wevelgem site was built or part of it as it really changed over the years. In 2000 a new plant was built in Kettering. Significant investments in new production lines : warehouses were converted in production halls , new highbay in Wevelgem, …
- Peter In order to give you a flavor of what Alpro is let’s have a look at the company movie. Movie of 2 minutes
- Peter Alpro is present in several categories. Multi ingredient Multi country Ambient, chilled and frozen Multi brand : Alpro & Provamel in the Healthfood
- Peter Here you see an overview of the different packagings we have in our portfolio Tetra briks, cups, in different sizes
- Peter These different products are filled in own factories but also at copackers across Europe
- Peter Double digit growth since 2013 : putting some “healthy” stress on the supply chain
- Peter : ambition within supply chain team is to create business value. Challenging times with high growth rates which were not always forecasted. Contracting of volumes : reservation of capacity at copackers
- Valérie (2min) As Peter explained you: First, business value or keeping the increasing trend in terms of net sales is key & next to this, Alpro – as an innovative company – was also interested to know if digital could play a role in this. & before I explain how we believe digital can support business value, let’s first explain you how we see DIGITAL. We believe in fact that DATA plays a very important role in DIGITALIZATION journeys. Today, as you know, more data is available then ever, both internal data (captured by sensors, scans) & external data (market trends, customer habits). But still, we hear people talking about supply chain data, finance data, sales data, etc. We don’t believe in this. We don’t believe that there is data just for 1 purpose. For us there is only 1 kind of data, and it company data, which is used for multiple purposes. If you take this company data, and combine it with advanced analytics, you have start building a digital core, which can be used for multiple use cases, in planning, in finance, etc.
- Valérie (3min) But back to the question of Peter: How can companies such as Alpro keep realizing increasing business value? Well, for this, a lot of good frameworks are developed & used for multiple year by for example McKinsey, etc. In these frameworks, there are multiple categories you can work upon, such as revenue growth (how to generate more or better sales), asset efficiency (how to optimize your network or make the most efficient use of it) & operation margin (how to lower cost). Within these categories, companies typically initiate projects & prioritize and execute these projects based on their expected impact on the business. After first discussions with Peter, it came immediately clear that factories are running full & capacities are under pressure. Thus we decided to focus on ASSET EFFICIENCY. & now, how can the digital core we discussed before contribute to these business drivers? This core enables you to look to your supply chain & your classic categories in a more intelligent & data driven way. So you can work upon your asset efficiency by gaining more & more insights by looking in a smart way to your supply parameters. For example, first gain insights in your real capacity & the influencing factors, before taking expensive investment decisions, or did you already had a close look to your most invisible lead times while making decisions on your safety stock. Or how to increase production by decreasing your scrap? Thus: we believe digital does not always is about rethinking your full business model, but can also help to bring value in your current business model – and that is where we focus on with LOP
- Valérie With LightsOutPlanning we help you to build your digital core, because remember that a digital core is not a ‘storage space’ for all your data, but algorithms/ML/adv analytics that create insights based on all your data. We think definitely big, but of course this is not going to be done overnight. Therefore, we like to start small (as we did together with Alpro) with a use case to prove value & enable you to scale fast.
- Valérie (30 sec) Peter will further explain you… We were contacted by Bluecrux whether we were interested in a practical use case solving a real business need. we could develop a use case to perform a big data exercise. At this moment we are upgrading our MPS planning tool OMP introducing capacity constraint planning combined with batch ruling, shelflife, … But we still need to provide crucial info to this tool : target stocks. Challenge remains : target stock level = buffer to absorb deviations in demand absorb deviations in supply : use case
- Peter: In the typical safety stock formula’s the LEAD TIME FOR MORE PRODUCTION is an important input. Part of that leadtime is the quality release time.
- Peter In short how do we produce : soy bean coming from Canada, China, France, … : basemilk, formulation ; packing : sterility test after X days In Alpro a positive release principle is applied : quality needs to release the product in SAP before these can be shipped to customers. All those transactions are in SAP : material movements : at the moment of production (goods receipt) and the moment of release the product out of quality status But we do not have a real monitoring of how much time there is between production and release of the products. It also allowed us to see how many pallets never were released by quality : quality scrap. How did we do this : a simple download of the material movements in sap with some meta data on the products (description, product type, group, …).
- Valérie When we start with such a use case: we always do 2things: We autobuild a virtual twin (the network you saw before) – transact data -> network bouwen We connect data to it Different from a 1 time exercise,….
- Peter What did we learn from the data :
- Peter On the chart above you can see the evolution of the release time for 1 product group. As you can see in November extra time was needed to release the products.
- Peter On the chart above we compared data for Wevelgem and Kettering for products which should have the same release parameters. We noticed that Kettering was taking more time for this step and started investigating.
- Peter After doing an inquiry we noticed that Kettering was feeding the incubator only 2 times per day. With the growth of the volumes in the factory it was for them a way to absorb the extra volume. But of course is not really desired by planning. This is only 1 small bit of the total supply chain. In fresh every day counts as the clock keeps on ticking. And the Consumer expects fresh product in the shelf Question : from what point onwards will you break the FEFO in the shelf and take the product further in the shelf.
- Peter We only looked at a small part of the whole planning cycle how the product reaches the customer / consumer. The danger is losing of sharpness with regards to shelflife. As I heard here in one of the previous sessions of supply chain innovations : in trouble we double.
- Peter Easy: standard transactional data taken out of SAP, with minimum manipulation. Difficult: extraction, storage and communication of data. Solution + tool make it possible to crunch large data sets very fast Huge data sets are available in our ERP systems (SAP): tools are now available to turn these into value. Alpro is a fast-growing business with departments changing their ways of working in order to absorb this growth. Continuous KPI monitoring is mandatory.
- Peter Currently we are focusing on upgrading our MPS & Deployment planning tool in OMP+ Next step is better parameter setting, the use case was about the release time but we would like to extend this to the whole supply uncertainty. Monitor the full lead time for more supply and the reliability of the supply. How much buffer should we have to absorb disruptions in the whole supply chain. Link with spare capacity, …
- Valérie
- So when you leave this event tonight, after a couple of drinks… I want you to remember 2 things: Most companies spend 70% of their budget keeping the lights on, don’t be that company! Try to be a digital winner. And get started! And don’t forget to Think Big, but to Start Small and to Scale Fast. Thank you very much.