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 pro­vid­ed 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 fea­tured 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.

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.

Key Busi­ness Dri­vers for S/4 Implementation

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.

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. 

Suc­cess Fac­tors in 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.

Lessons Learned From 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.

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.