This year’s Customer Excellence Award for Best Supply Chain Transformation goes to Ferrara Candy – for making incredible strides in its digital transformation journey amidst a string of M&A activity that continues to add extreme complexity to Ferrara’s global supply chain.
Ferrara has come a long way since its founding in 1908. What began as a small bakery on the south side of Chicago selling candy-coated almonds has grown into a multibillion-dollar global company and producer of dozens of today’s most iconic and celebrated candy and cookie brands: Laffy Taffy, Butterfinger, Keebler, Lemonhead, Famous Amos, Nerds and more.
During a presentation at Bristlecone Pulse at MIT 2019, Michael Murray, COO of Ferrara Candy, said it’s an “interesting journey” they’ve been on, particularly over the past couple of years.
In 2017, Ferrara was acquired by the Ferrero Group, one of the world’s largest confectionery companies, and become a wholly owned subsidiary. Since then, Ferrara has completed two major Ferrero-backed acquisitions – first acquiring, in April 2018, the U.S. confections business from Nestlé, then in July 2019, Kellogg’s cookies, cones, crusts and fruit snacks portfolio.
Murray said the integration of the Nestlé and Kellogg’s assets gave him a “chance to dream” about how to design future operations for scale. “I got to say, ‘Over the next three years, what transformative things do I want to do to my manufacturing and distribution network?’” he said.
And it’s a multifaceted, high-capacity global network. Ferrara produces hundreds of millions of pounds of products annually. Add to that the complexity of the seasonal ecosystem. Ferrara is #1 in seasonal sugar confections: candy corn, candy canes, conversation hearts and jellybeans.
SAP APO has been a key area of focus in Ferrara’s digital transformation, and an area in which Bristlecone’s expertise has been instrumental. Brought in to help Ferrara better leverage APO capabilities, Bristlecone is now working with Ferrara on phase five of continued enhancements.
“The first couple phases were about plumbing. The last couple phases have been a lot more about enabling more capability,” said Murray. “Our friends at Bristlecone are really bringing distinctive capabilities to bear – that we would not otherwise have had the time to pursue.”
Of the integrations involved post-acquisitions, Murray said there was never a question about whether SAP would be the ERP for Ferrara moving forward, since Ferrara, Nestlé and Kellogg’s were all on SAP. It was more about better leveraging SAP, while not losing material capability.
He also noted that the role data plays in Ferrara’s operations has come center stage. “It’s very easy to acquire data,” he said. “The question is, what are you going to do with it?”
Ferrara has many analytics dashboards, but what value can come from taking the dashboards closer to where things are actually happening and making them more real-time – for example, putting analytics in the hands of line operators? What are the risks involved in doing that?
“What data is relevant and what decision is the human being going to make differently given the information?” Murray said working through all the considerations and nuances takes time.
He also said it’s not just about the technology. Ferrara’s mission, vision and values have played a critical role in creating the buy-in and culture needed to design operations for scale. He also knows how important it is for Ferrara to put what he called better “athletes” in management positions, bring in new talent and continue to be really good at the commercialization process.
Over the next 36 months, Ferrara will continue transforming its supply chain and designing its future operations for scale, with a focus on four key areas:
- Driving Post-Acquisition Synergy and Productivity
- Honing Core Competencies (People, Processes and Technology)
- Shaping IT Integration and Balancing Roadmaps
- Accelerating Digital Transformation
Congratulations to Ferrara, this year’s award winner for Best Supply Chain Transformation!