Danny Stubbs on supply chain planning in fresh food, shelf life, and transformation

Danny Stubbs - Planning in fresh food: shelf life, revenue management, and transformation

Danny Stubbs - Planning in fresh food: shelf life, revenue management, and transformation

Episode description

⁠⁠⁠⁠⁠Ben⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠Wim⁠⁠⁠⁠⁠ talk to ⁠Danny Stubbs⁠, who has over two decades of experience in food manufacturing and currently leads the planning transformation at ⁠Arla Foods⁠.

Danny shares his journey through various planning roles, from the production line to his current European transformation role. He provides unique insights into the cooperative business model at Arla, where 8,000 farmer owners across Europe are both suppliers and shareholders, creating a special approach to supply chain management.

He discusses the complex challenges of dairy supply chain planning, including balancing daily milk intake from farms with market demand, managing extreme seasonality (especially during Christmas), and handling products with shelf lives ranging from 24 hours to 3 years. Danny explains Arla's "milk wheel" concept and how they optimize milk utilization across different product categories.

Danny also provides insights into their digital transformation journey, including implementations of SAP IBP, partnerships with O9 for revenue management, and custom machine learning solutions for daily demand profiles. 

Key topics covered include:

  • Managing a cooperative business model in the dairy industry
  • Balancing milk supply from farmers with market demand
  • Sustainability initiatives and incentives for farmer owners
  • Digital transformation with SAP IBP and O9
  • Handling extreme seasonality and product diversity
  • Change management approaches for complex transformations
  • The importance of maintaining an external perspective

    • TIMESTAMPS:
    Introduction & background
    (0:18) Introduction of Danny Stubbs and his 20+ years in food manufacturing
    (1:27) Overview of Arla Foods as the world's largest organic dairy company
    (4:50) Danny's career progression from production lines to transformation

    Cooperative business model
    (1:36) Explanation of Arla's cooperative structure with 8,000 farmer owners
    (2:49) Daily logistics of milk collection and the supply-demand balancing act
    (17:41) Sustainability incentives for farmer owners through points-based system

    Dairy supply chain complexity
    (8:02) The "milk wheel" and "milk ladder" concepts for milk utilization
    (9:04) Seasonal variations in milk supply with spring peak
    (10:24) Supply chain segmentation for different product types
    (10:32) Milk24 product with 24-hour farm-to-shelf guarantee
    (10:57) Extra mature cheddar requiring 3 years to mature

    Demand planning and digital transformation
    (13:19) Demand sensing engine and its importance for daily planning
    (21:00) Partnership with O9 for revenue management
    (25:46) SAP IBP as the planning backbone
    (28:17) Custom machine learning tools for daily profile planning

    Seasonality and promotions
    (23:43) Christmas seasonality challenges, especially for fresh cream
    (24:45) Anticipating peak shopping days for holiday planning
    (22:27) AI-driven dynamic promotion planning

    Change management
    (29:47) Approach to change management in a complex organization
    (31:43) The importance of "shrinking the change" to make it manageable
    (32:11) Breaking down large changes into smaller steps

    Closing advice
    (35:46) Advice to think "outside in" and maintain external perspective
    (36:12) Being curious about the world and technology developments