Business Transformation at FrieslandCampina Karel Paarhuis, Director Program Management Office “Summit”

22October 2015, SAP BTM2 Summit

Digital Transparency: Upstream

Feed & health

Milk

Transport

Sustainability Transparency Quality of the Supply Chain

GPS & GPRS

Digital transparency: Track the process

● Introduction of FrieslandCampina

● Transformation Program “Summit”

● Three key take aways

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Content

Key facts

22.168 11.3 billion euro revenue

32 Facilities in

countries 100 Export to over

countries

Millions of consumers

member dairy farmers own the Company

19,054

Every day

Figures 2014

employees

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FrieslandCampina is organised in four business groups and a corporate center

Executive Board

Consumer Products Europe, Middle East

& Africa

Consumer Products Asia

Cheese, Butter & Milkpowder Ingredients

Corporate Centre

High volumes and highly integrated supply chain across business groups

• Processing of 10 billion kg Milk annually • 1 million liter milk processing

per hour. • 227 trucks purely for milk

collection (42,5 Million KM annually).

• Supply driven and demand driven

supply chain • Valorisation of milk is key.

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Integrated Supply Chain Volumes

1. Soccer • Category

management 2. Scoop

• Supply Chain Optimisation

3. Summit • Standardisation

processes & data

3 Transformation initiatives A clear strategy: Route 2020

To create the most successful, professional and attractive global dairy company

● Introduction of FrieslandCampina

● Transformation Program “Summit”

● Three key take aways

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Content

Summit as business transformation

Benefit Realisation

Change & Business Readiness

Strategic Direction

Business Process Management

Program and Project Management

IT Management

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Strategic levers which drive Summit Strategic levers

• A supply chain hub operating model

• Rigorously standardised and harmonized best practice processes

• Full information transparency

• A single system

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End-to-End process integration is key

● Processes in the functional domains are the baseline 1. Plan 2. Source 3. Make 4. Sell 5. Deliver 6. Finance

● Standardisation of the End-to-End processes provides the advantage 1. Order to Cash Sales 2. Order to Cash Distribution (Incl.

Inventory) 3. Sales & Operations Planning 4. Make to Demand (Incl. Quality,

Production, Scheduling and Maintenance 5. Finance-to-Manage 6. Purchase-to-Pay

BPM: finetune on a strong baseline

Process standardization

Sys

tem

in

tegr

atio

n

15 ERP Landscapes

GSS

Process standardization

Sys

tem

in

tegr

atio

n

Baseline

Fit for Purpose

high low

high

lo

w

low

low

high

high

1. Start • Standardised processes

2. Experience • Model, design, build, run, monitor &

improve

3. Adjust • Fit for purpose in some areas

Stakeholder Management (mapping &

communication)

Communication (strategy, channels &

style)

Change Impact Analyses and action plan

Training

Change Management

Change Management requires an explicit approach

Change of • Processes • Organization • People • Systems • Master Data • Governance

Three steps to increase the readiness of the business for change

2. Change Impact Workshops

3. Managing change action plan

As-Is Way of Working

To-Be Way of Working

OtD MtD

PtP OtS

Change Action Plan

1. Validation Workshops

Solution Way of Working Implementation

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IT transformation: plan dependencies Level 4

ERP – One BackBone

Level 3 Manufacturing Operations Management System (MOMS)

Maintenance Production (MES)

Quality (LIMS)

Inventory (WMS)

Level 2 SCADA systems

Level 1 PLC systems

Continuous Flow

Control

Batch Control

Discrete Control

In scope

Out op scope

MTD FtM PTP OTD OTS

S&OP Reporting

• Level 3: MOMS • Automated Warehouse Mgt.; LIMS &

MES

• Level 2: SCADA • Level 1: PLC

● Standardised system landscape for

• Level 4: ERP • Level 3: MOMS

● Strategic vendor management ● Integration architecture

Governance: adjust to program phase

Template Template and implementation

Template, implementation and

steady state Start up First implementations Current status

Project

Temporary organization Project

Temporary organization

Global BPO

Direction

Approval

Proposal Permanent virtual organization

SUMMIT program Temporary organization

Steering team

Strategic Direction

Budget Strategic Direction

Escalation template issues

Progress Escalation

Issues & Risks

Local BPO Subject Matter Experts

● Introduction of FrieslandCampina

● Transformation Program “Summit”

● Three key take aways

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Content

Transformation: my three take aways

1. Business transformation is dynamic and not sequential. Adapt. 2. Relate changes to the strategic objectives and benefits. 3. Deliver on your next stagegate(s).

Benefit Realisation

Strategic Direction

Business Process Management

Change & Business Readiness

Program and Project Management

IT Management Implemen- tation

Readiness

Blueprint

Project preparation

Validation

Design

Realization

Go Live preparation

Go Live

Hypercare

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Thank You