DANISCO CASE
SUPPLY CHAIN AS A MARKET DIFFERENTIATOR
From being anchored in a product and price-oriented paradigm, the aim of the executive management was to turn Danisco towards being a more market and customer-oriented business, capable of understanding customer needs and subsequently turning these into competitive solutions, targeted to the specific business requirements of the customers.
hrough a number of acquisitions and divestments, Danisco has evolved into one of the world’s leading producers of food ingredients and industrial ingredients to the industry.
T
O
At present, Danisco ingredients are used in just about every second ice cream and cheese, every third box of detergent and every fourth loaf of bread produced globally. The company has a global demand and production footprint, with 100 production facilities distributed in 40 countries.
Therefore, the project had as its focus the translation of corporate ambitions as well as market requirements into requirements to the supply chain, parallel with a clarification of the potential value to be delivered by the supply chain. Eventually, the project outcome led to the formulation of an entirely new Danisco customer value proposition.
Danisco is the result of numerous acquisitions, which has created a strong global market position. However, the massive growth has been realised at the expense of an increasing degree of internal complexity. It is not an easy task to manage a fragmented company structure with operations in many countries and package these into tailored and price-competitive services to local as well as global customers. Particularly in a highly competitive industry, with many competitors not having the same operational legacy as Danisco. This was the case for Danisco during the winter of 2010/11. The top management therefore decided to establish a new organisational unit, parallel to the existing Sales and Production divisions, taking charge of the supply chain operation. The purpose of the new organisational unit was twofold: 1) to ensure optimal and customer-oriented supply chain operations, and 2) to turn the Danisco supply chain into a true market differentiator.
ver a two-month period, Danisco worked with defining and translating its supply chain strategy. Two key hypotheses in the strategy work were: 1) that the corporate ambitions of the company had not been made clear in a supply chain perspective (driven by a traditional focus on sales and production, not keeping in mind what was “in between”), and 2) that many valuable capabilities in the supply chain were not properly leveraged.
Through broad involvement of key resources from across the Danisco value chain as well as the executive management, the findings, outcomes and conclusions from the project were anchored in the organisation – preparing the company for the mind shift. The project has already generated a number of positive effects, including an anchored supply chain strategy across the Danisco organisation in general, and the supply chain in particular. A common language has been identified across the newly established supply chain, clearly translating the corporate ambitions into daily operational priorities.
“
…We have truly taken a big step towards establishing a oneorganisation mindset across the value chain. We have, already in our first year of existence, realised significant cost synergies as well as top-line impact. However, we should keep in mind that it takes hard work to keep complexity at bay …”, explains VP of the supply chain, Karen-Marie Katholm. Karen-Marie Katholm has been through a similar process before, and she recognises that there is still a long way to go before inherited ways of doing business are changed and the full potential of the direction is realised.