Agropur’s milk and cheese divisions sold, delivered and marketed separately to the same people, resulting in a fragmented customer experience. How could it better serve hungry diners?
Working with IBM, Agropur is joining up its diverse business units and standardizing on Oracle solutions—enabling harmonization of customer visits, deliveries, marketing efforts and more.
Unlockscost savings by driving optimization of logistics and more
Revealsinsights into buyers’ tastes, paving the way to a better consumer experience
EnablesAgropur to compete effectively and sustainably, safeguarding members’ incomes
Business challenge story
Serving hungry consumers
In 1938, pooling their efforts, dairy farmers created Agropur, a cooperative that is now a major player in the North American dairy industry. The idea is that by joining forces, members can share investment in ingredients for commercial success—such as processing equipment, sales teams, logistics infrastructure and marketing efforts—to put dairy goods on dining tables across North America.
Agropur sells a broad range of dairy goods, including milk, industrial cheese (economical cheese produced in mass quantities) and fine cheese (specialist goods made in smaller quantities). In the past, each group of products was sold by its own business unit. Since there was little communication between the various divisions, inefficiencies often went undetected.
Serge Fortier, CIO of Agropur, explains: “Most of our customers are supermarkets, convenience stores, restaurants and other food chains. To cater for the wide range of fresh foods they serve, many of our customers purchase from several of our business units.
“Because each division was operating independently, customers had to place separate orders for milk and cheese, and receive the goods in separate deliveries. This resulted in frustration and extra work for customers, and meant that Agropur as a whole was spending much more on areas like logistics than necessary.
“Our mission was clear: if we wanted to cut costs and enhance the customer experience, we had to get the different business units working together. We started by rearranging our personnel into central functions for areas such as sales, marketing, finance and production. For example, we trained people who previously sold only milk to also sell cheese. However, because each division was still using its own systems and processes, the salespeople had to place the orders in three different tools—wasting time. To create a truly joined-up business, we needed to standardize and centralize our processes and systems.”
Finding the recipe for success
After evaluating solutions from a range of vendors, Agropur decided to standardize on a comprehensive set of Oracle E-Business Suite enterprise resource planning (ERP) applications. The Oracle E-Business Suite applications include modules that support finance, production & planning, sales & logistics, master data management and business intelligence.
“We had been using Oracle in one of our business units for years,” adds Serge Fortier. “We chose to standardize on Oracle because we liked the platform and knew that it could offer all of the functionality we were hoping to deploy.”
Rather than upgrade its previous Oracle system, Agropur elected to re-implement the Oracle E-Business Suite platform. This approach enabled the company to introduce much more advanced functionality and to reduce the level of system customization, which can make future upgrades complex and expensive.
For support during the project, Agropur engaged IBM® Services.
“Deploying a new ERP platform is complex work, so we decided to call in the experts,” remarks Serge Fortier. “We selected IBM as a strategic partner based on positive experience during previous collaborations with them, and also because we felt that IBM could bring the best expertise to the table.”
The IBM Services team managed the project, liaising with stakeholders, coordinating the various activities and ensuring that important milestones were met on time. IBM experts from areas such as sales, distribution, logistics and finance helped Agropur implement best practices to maximize efficiency. In addition, IBM provided change management services, and assisted in the sizing and selection of the infrastructure underpinning the Oracle solutions.
“We have a very good relationship with the IBM team, because they understand our culture well and are great people to work with,” comments Serge Fortier. “The support we receive from IBM is excellent.”
During the Oracle implementation, the IBM and Agropur team standardized customer master data. As a result, the company can gain a clear, unified view of each customer and their purchasing habits across all business units.
Additionally, the IBM and Agropur team standardized supplier master data, giving the business a single view of each supplier across all business units. As a result, it is much easier for finance teams to standardize processes—such as order-to-cash, procure-to-pay and record-to-report—to achieve efficiencies.
As well as standardizing on the Oracle platform, Agropur is rationalizing its data centers.
Serge Fortier elaborates: “In the past, each business unit operated its own data center, and we had inherited two more from acquisitions. In total, we had six data centers, which were time-consuming and costly to manage. Now, we are moving to one main data center alongside a second site for disaster recovery. As a result, we can retire the other data centers and achieve enormous cost savings.”
The Oracle applications run on the IBM AIX® operating system on IBM Power® servers, which are virtualized using IBM PowerVM® technology and feature IBM PowerHA® for high availability.
Serge Fortier remarks: “The IBM Power Systems servers provide excellent performance and availability for our business-critical Oracle solutions.”
The data is stored on IBM Storwize® V7000 devices and backed up to IBM TS3310 tape libraries using IBM Spectrum™ Protect™ and IBM Spectrum Protect Snapshot technology.
Providing the crème de la crème of customer service
The implementation of the Oracle solution and standardized processes is well underway and running smoothly. Once the project is complete, Agropur will operate central functions for sales, planning, production, supply chain and more—all relying on an integrated set of Oracle applications.
The data in the Oracle solutions will act as a single version of the truth, reducing the scope for error. Agropur plans to analyze this data using Oracle Business Intelligence Enterprise Edition, gaining detailed insights into the profitability of each customer across all lines of business. As a result, the company will be able to develop a deeper understanding of which customers are most valuable, and introduce fresh incentives to reward their loyalty.
Since all data will reside on the Oracle platform and be analyzed by a single reporting solution, Agropur will be able to gather these valuable insights in real time—sharpening its ability to respond fast to fresh developments.
Most importantly, a clear view of each customer’s behavior will enable Agropur to dramatically improve the customer experience.
Serge Fortier explains: “Whenever customers choose to purchase cheese and milk from us, we will be able to spot opportunities to combine deliveries—providing added convenience for the customer and cutting our own logistics costs.
“Similarly, our customers will no longer need to talk to multiple sales representatives to order all goods they desire. Instead, they will have one salesperson who acts as a single point of contact. And because each salesperson will be serving fewer organizations, they will be able to focus more closely on individual needs and truly understanding each customer’s business. This approach will help us take our customer service to new highs, and help us identify opportunities for cross- and upselling.
“What’s more, having a 360-degree view of the customer will enable us to optimize our marketing. In the past, because each division ran its own promotions, we could have been bombarding customers with several messages in a short space of time. Now, we will be able to generate much more sophisticated campaigns tailored to each customer’s individual tastes.”
By centralizing core business functions and eliminating the need to support numerous data centers and ERP platforms, Agropur stands to achieve great economies of scale and important cost savings. By keeping overheads low, Agropur will be able to help its members protect their profit margins, even when market forces exert downwards pressure on prices.
“Our ultimate goal is to secure the long-term viability of our members’ incomes,” concludes Serge Fortier. “The IBM and Oracle implementation is a critical step in the right direction, sharpening our ability to compete effectively for years to come.
“The Oracle implementation is only the beginning. With the foundation for a smarter, leaner, unified organization in place, we’ll be able to seize fresh opportunities to improve our business and provide stellar customer service. We couldn’t have done it without IBM and Oracle.”
Jointly owned by 3,367 member dairy producers, Agropur is a major dairy cooperative. Across its 38 plants, the company processes more than 5.7 billion liters of milk every year, producing delectable dairy goods that amass over USD 5.9 billion in annual revenues. Employing more than 8,000 people, the company operates in Canada and the United States.
- Power Systems
- Power Systems running AIX
- Storage: Storwize V7000
- Storage: TS3310 Tape Library
- IBM Global Business Services
- GBS AD&I - EA - Oracle
- GBS AD&I - EA - Oracle - E-Business Suite
- GBS BCS EA - Oracle