As the consumer packaged goods (CPG) industry, long known for consistency and stability, responds to a constant state of change worldwide, more companies in this space are investing in digital transformation initiatives to streamline operations, upgrade their technology landscapes, and achieve profitable growth.
Presented by ASUG’s Consumer Industries and Customer Experience Community Alliance, the S/4 in Consumer Products – Real World Customer Lessons Learned Task Force (virtually, August 4, 10 a.m. CT; register for free, included with membership) will provide a platform for leading CPG customers who have implemented SAP S/4HANA to share stories of their transformation journeys. Specifically focused on the consumer industries, the task force will feature perspectives from three senior technology executives with experience leading digital transformation:
- Liam Durbin, Chief Information Officer at T. Marzetti Company, which produces numerous salad dressings, fruit and vegetable dips, frozen baked goods, and specialty brand items.
- Tammy L. Williams, Vice President - IT, Consumer Products at Georgia-Pacific, one of the world's largest manufacturers and distributors of tissue, pulp, paper, toilet and paper towel dispensers, packaging, building products and related chemicals.
- Frank John Wiggins, Group Vice President, IT at HP Hood Inc., one of the largest branded dairy operators in the United States.
Below, all three Task Force panelists discuss their SAP S/4HANA implementation journeys, key business drivers for transformation, success factors for digitization, and lessons learned along the way.
This interview has been edited and condensed.
Q: What is the current state of your organization’s S/4 implementation journey?
Liam Durbin, CIO, T. Marzetti Company: We made the call to split our final wave into two parts, to de-risk one of our largest plants, so Wave 4 became Wave 4a and 4b. Wave 4a went live in May, and Wave 4b will go live the first weekend in August. While every wave has seen the expected spike in P2 tickets associated with new users coming on, we have been very pleased with the results so far. Change management and training has been very good, adoption is high, and our customers have been pleasantly surprised at the business disruptions they never experienced.
Tammy Williams, VP - IT, Consumer Products at Georgia-Pacific: GP’s Consumer Products Group (CPG) completed the business transformation journey that was enabled by S/4 in 2022. It was a multi-year journey that was a greenfield implementation, versus an upgrade or migration from our SAP ECC system. We had a significant scope that included Finance, Integrated Business Planning, Trade Promotions, Extended Warehouse Management, Asset Care, eCommerce and Marketing. We implemented across both corporate functions and capabilities, as well as our manufacturing sites and distribution centers. Additionally, our GP Building Products group has started a transformation journey to S/4 and is still in the Imagine (Design) phase.
Frank Wiggins, Group VP, IT at HP Hood: We are midway through our greenfield S/4 implementation project. We have implemented many of our back-office functions—Finance, Accounts Payable (A/P), Accounts Receivable (A/R), Integrated Business Planning (IBP), Business Planning and Consolidation (BPC), Sales Orders, Trade Promotions, Transportation Management, Electronic Data Interchange (EDI)—and are now turning our attention to rolling out SAP at our plants, with our first SAP Extended Warehouse Management (EDW) implementation later this year.
Q: What were the key business drivers for your S/4 implementation project?
Durbin: At T. Marzetti Company, we previously considered ourselves on a “smoldering” platform. While our PRISM [process-ERP] system was outdated and heavily customized, and running on an aging IBM AS/400, it was functioning. It was old, with a green screen interface, but users were accustomed to it, thus it was well-adopted, fully amortized, and frankly could have run for another decade, such as it was. Our primary driver was to re-platform to a modern ERP that could handle our plans for growth, and to unite all our disparate business processes.
Wiggins: Our legacy systems are mostly AS/400-based and were implemented when we were a much smaller company. We realized that those systems were struggling to provide the functionality our organization needed to both meet the expectations of our customers and enable our continued growth. Of course, there was also the challenge of finding qualified AS/400 resources over the long term.
Q: How would you describe your approach to S/4 implementation?
Williams: GP CPG went greenfield with its implementation, for a business-led, process-based approach enabled by technology. We implemented across seven deployments, with the first two deployments implementing full capabilities and pilot manufacturing and distribution sites, and the remaining deployments serving as site implementations.
Durbin: I’d say it was pretty straightforward. We went with a mini ‘big bang’ ERP implementation, meaning that we did not carve off finance or some other portion to do upfront. We took all our back-office functions, including Total Productive Maintenance (TPM), live with Wave 1, plus a few manufacturing and distribution locations. We kept our biggest, riskiest plants for the later waves. The last wave will be one of our biggest, but most complex, dressing plants.
One of our guiding principles was what we called “fit to standard” and SAP now calls “Clean Core.” We stuck to that guiding principle, and we expect to reap the benefits downstream, which will be felt in low total cost of ownership (TCO), low technical debt, and easy upgrades. We also implemented a modern analytics platform on Microsoft Power BI on Azure.
Wiggins: Our original approach was to use one systems integrator, but we chose to pivot and manage the project in-house. Now we are bringing in the best partners and resources that we can find for each module or sub-project. We implemented a large set of functionality at one time early on, but as we continue our journey we are breaking things down to smaller, more easily managed sub-projects.
Q: What were some critical success factors in your S/4 implementation?
Williams: It’s about leveraging high-performing talent from within the organization, as this is a major investment, and the right people are key. Engaged sponsors and business leaders, and adaptability, are both key.
You need the right governance processes. The governance and methodology of a large-scale project are foundational elements to fully understand the health of the program and ensure its success. This area of investment should be the anchor to the program.
Marzetti: Clean core, as mentioned before, was a big part of it. I cannot overstate how important that is. We really burned the boats when we got off PRISM and took nothing with us to the new platform. Everyone says organizational change management (OCM), but it is still often neglected anyhow. Our OCM team was rock-solid, which helped a lot with adoption.
Executive support is another area everyone talks about that is often still underwhelming. Our executive support was tested repeatedly during our project, as crisis after crisis tried to derail the project. Without their unwavering support, including the Board, it would have been too easy to pull the plug or attempt to “shelve” the project.
Stack the team with A-players. No excuses. No exceptions. Spend the money on the SAP professional implementation services, such as SAP Value Assurance. I personally think it ought to be free, but it isn’t. Pay for the peace of mind it brings, so you can focus on actual problems.
Wiggins: We’ve been focused on minimizing disruption in the short term. For example, when we went live with SAP Transportation Management, we had a goal to not miss any scheduled loads, And we're focused on driving efficiency and effectiveness in our end-to-end business process over the long term.
Q: What have been some lessons learned from this transformation journey?
Williams: Developing plans that are modular in nature enable the program to respond to changes with less impact. Change management and communication are key. When it feels like you are doing too much, you are still not doing enough. Multiple testing strategies should be incorporated. Beyond traditional testing, include other test approaches, such as day-in-the-life, on-site testing with devices and movement across the facilities, and mass data testing.
Treat asks such as scope changes, enhancements, and timeline changes as their own mini projects that require a thoughtful assessment of the risk, value, and alternatives. Small changes can have significant impacts that aren’t always immediately visible.
Durbin: Hypercare: smother the new users with love and attention. Don’t overestimate users’ understanding of what a PC does. This is now the cellphone generation. Some users didn’t know common password conventions or rules. Some had never before operated a mouse.
Don’t allow the relationship with your systems integrator (SI) to sour. Even if you have every reason to let it deteriorate and begin the nickel-and-dime change orders, the aggressive negotiation on price, just resist. Respect their need to make their margins. Share the load. Be a partner, not a customer. Make the experience something you both want to share. Finally, get all the infrastructure work—Wi-Fi, devices, tokens, fobs—done as far in advance as possible and off the critical path.
Wiggins: People were concerned that SAP would be implemented and that no improvements would be made afterward. We introduced a lean and agile sustainment process for defects and minor enhancements that has been very successful. Engaging the end users to identify and prioritize improvement efforts across three-week release cycles has worked out extremely well.
Q: Is there anything else you’d share, specific to the CPG industry, about your experiences, successes, and challenges, related to S/4 implementation?
Durbin: Every SI will overstate their capabilities, and their accelerators, as it pertains to CPG and Food SAP projects. It’s mostly fluff. What makes an ERP project succeed or fail has not changed in 40 years and likely won’t change in the next forty years. Hire top talent. Get a good SI, but don’t expect any more from them than you are willing to forcibly extract.
Unique to food, I would mention the heavy manufacturing and shop floor requirements. It puts a significant load on the team to understand the physical layout of the plants, and to understand how the raw, work-in-progress, packaging, and finished goods move around the plants and distribution centers. You have to think about how, when, and where users will interact with the system, and how devices need to react to dust, abuse, and moisture.