Synlait Milk

Background

Synlait Milk Limited is an exciting and dynamic company that in the last 10 years has grown from a start-up farming company, to a NZ$1.5bn food and beverage company with over 1000 people, and continues to grow. It is based just south of Christchurch in the South Island of New Zealand and has customers all over the world, including many large multinational food companies.

The Synlait lead team, under the guidance of one of the founders and the CEO, realised they needed a more structured way of managing the business. As the CEO said, they wanted to evolve into a “planning organisation”.

As a result, Oliver Wight was chosen to assist with improving their monthly Integrated Business Planning process, to give them more visibility and more time to spend on the longer term. They also took on board the need for a robust weekly Integrated Tactical Planning (ITP) process, to complement this longer-range view of their business. Their deployment of the ITP process, was one of the more effective processes seen by Oliver Wight to date.

It became apparent early on, that stabilising the shorter-term horizon, was an area that could quickly drive significant benefits.

Their values statement at the time was:

WE THINK BIG. WE ACT NOW. WE DO IT RIGHT

They did the first two very well, and were reaping the rewards for it, but the last part – WE DO IT RIGHT – was where they were falling over with lots of ad hoc and informal processes.

There were also a few other hurdles to overcome including:

• Low maturity in terms of systems and process integration
• A bad experience with an ERP implementation, which led to a heavy dependence on spreadsheets
• There was an entrepreneurial culture that had to be maintained, but there also had to be a culture change to channel that energy into a more disciplined approach
• Their way of working was very reactive
• There was a high degree of functional silo-ism
• The culture was also one of trapping and not communicating bad news early enough

The journey

Synlait knew that to maintain growth and its good people, it needed good structure. Appointments were made for key IBP roles, as Oliver Wight recommended, but it also recognised early on, the need for a fulltime ITP lead, a very effective decision for Synlait. Often, the ITP lead role is picked up by one of the key Integrated Business Planning (IBP) facilitators, but in this case the company was more pro-active.

While systems had been a problem, it stuck to a strategy of making sure people were well educated, processes were tested and embedded, and training was thorough, before thinking about technology. It has however just changed focus to getting the right technology to facilitate process.

Oliver Wight supported the deployment of the ITP process using its Proven Path® Change Management methodology; starting with education for the lead team, and cascading down to all key managers. Processes were drafted, tested on paper with subject-matter experts, as well as through a series of conference room pilots, and then live pilots. The approach was to start small, but with consistent steps until the whole tactical horizon (13 weeks) was being managed through the process.

The results

There were two key benefits:

1. Less noise for the leadership team, and by definition, for the rest of the business too
2. Pro-active anticipation, management, and communication of issues, encouraging the behaviour of ‘telling it how it is’

More detailed outcomes

There was some re-design in the supply planning and scheduling space for both ITP and the IBP Supply Chain Review, but it was the key behavioural elements that were most important to come to grips with:

• Breaking plans down into weekly buckets and replanning every week
• In the ITP process covering a horizon of 13 weeks and only focusing on what has changed on a weekly basis
• Creating a routine of checking back to the signed-off IBP plan, to assess whether the newly rolled-over ITP plans are still on track
• Integration of order entry and promising, distribution and shipping, supply planning and scheduling, and capacity planning
• Measure performance, but more importantly understanding the root causes behind missed opportunities

What else needs improving?

• Ensuring actions fix the root causes and underlying process issues to stop them popping up again
• Further engaging the business in the importance
• Finding ways of giving recognition to participants

What would you do differently next time around?

“Not a whole lot, the support from Oliver Wight was just right and following the Proven Path® made the change management a lot easier …” – Rob Stowell, Supply Chain Director & IBP Implementation Sponsor