Our client, a global Co-op food ingredients and agribusiness, which had incorporated its milk collection business into its ingredients division, decided a review of its ‘farm to market’ process.
Pathfinder, having previously reviewed the milk collection process from farm to factory and having redesigned how it would be operated Pathfinder was asked to expand the review to cover ‘farm to market.’
With daily collections from 3,000 farmers, and with 960m litres of milk processed per year, the level of activity required to generate value in the market was substantial and required constant attention in order to ensure that it delivered a return on investment.
The review needed to examine the areas where value was being added and where it was being destroyed. As well as covering physical activity and related inefficiency in the process, the review covered the difficulties of changing composition of the raw material i.e. milk, where any number of factors can influence overall return.
The need to combine our client’s core capabilities and market in order to generate a better return on investment was critical to the Co-op’s future success.
What we did
We worked with the team to carry out a comprehensive review of the financial impact of people, process, technology and organisation issues from farm to market.
We identified areas where poor practice was leading to waste and sub-optimal value.
We redesigned organisation structures and management practices in order to deliver an increased performance end to end.
Pathfinder identified more than ten significant improvement initiatives, the vast majority were subsequently implemented, thus eliminating millions of euro in costs.
Commercial arrangements, including a new ‘single commercial equation’ with supplier customers, were redefined. Quality, composition, volume and a number of other factors were incentivised and penalised. The result was a substantial increase in the overall performance of the milk pool.