Olam Insights

By Sanjeev Goel, Head of Operations, Crown Flour Mill

Just six years after we entered the wheat milling business with one asset in one country, we now have a market leading presence in three countries and are targeting to build this even in the fourth and most recent market for our milling business. Our extraordinary pace of growth has been contingent on “bringing our assets together” by extracting synergies, while harmonising processes across the board.

Our strategy was as simple as it was effective. Test and incubate best practice processes at our base, in this case our Crown Flour Mill (CFM) assets in Nigeria, before replicating it elsewhere.

While simple, we had our work cut out for us. When we first acquired CFM in 2010, we were faced with a massive task. First, we were new to wheat milling, and even more crucially, there were no formal systems or processes in place at our acquired asset. We therefore had no blueprint for improving output in quality or quantity or indeed any way of accurately measuring improvement. To add to the task, CFM consisted of two mills 500 kilometres apart, a 1,050 MT mill in Tin Can Lagos, and a 550 MT capacity mill in Warri, which made the logistics of change management all the more challenging.

Our first action was to acquire the expertise that we lacked in-house. We assembled a team comprising internal technical experts, systems and process experts who specialise in lean and six sigma tools and external experts in Business Process Mapping (BPM). A thorough and comprehensive review of current work processes was undertaken. The external experts were embedded directly with CFM’s in-house experts and heads of department to get a baseline of current workflow. This involved undertaking BPM for every single workflow, such as procurement, sales, milling and quality, and HR.

At the completion of the gruelling three-month exercise, we emerged with a step-by-step road map to establish best practice across both mills. This was followed with multiple adjustments and safe-proof tests to ensure we were covering all eventualities. Throughout this process, we ensured appropriate feedback and communication with our staff to identify the most optimum processes. This also enabled us to identify, upskill and develop a strong, core milling team who now forms the backbone of our Grains team. By January 2012, we had our road map ready. We then migrated our systems and processes into SAP, so they could be accurately captured, documented, and most importantly be transferable.

Today, our utilisation stands at 85% of installed capacity, which is 50% above where we started when we first acquired CFM. Quality improvements have also had a significant impact, and CFM is now the second largest flour milling business in Nigeria by volume, driven primarily by sales of our leading brand Mama Gold Flour.

In studying the original framework and processes, we were able to detect and eliminate many unnecessary functions, while plugging holes that led to lost time in the past and had translated into wasted material, time and money. Part of this included rightsizing the workforce and retooling workers for more value-added activities. With a robust system of reporting, we continue to make incremental improvements on a daily basis.

This BPM in its entirety has since been successfully replicated in Ghana, Senegal and Cameroon. With the experience we gained at CFM and our team of external and in-house experts, we were able to implement and migrate to SAP processes far more quickly, with similarly encouraging improvements across the board.

The quantitative and qualitative improvements delivered in our mills have had positive effects over and above the significant monetary returns. It has added to Olam’s reputation as effective change managers and improved investor confidence as we saw increased investments in the milling business.

Access to real-time data, through SAP, and availability of business intelligence tools allow our managers to conduct rigorous market analysis and take timely decisions – all of which has gone a long way in establishing CFM as the second largest miller in Nigeria.

We are very pleased with the progress on the integration of Amber Foods, where our team is working hard to replicate the same operating performance and bringing it to world-class levels. Six months after acquisition, capacity utilisation, uptime and extraction rates have improved significantly. The operating team is confident that the envisaged synergy impact can be achieved well ahead of initial projections.