Danny Stubbs - Planning in fresh food: shelf life, revenue management, and transformation

In this episode, ⁠⁠⁠⁠⁠Ben⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠Wim⁠⁠⁠⁠⁠ talk to ⁠Danny Stubbs⁠, who has over two decades of experience in food manufacturing and currently leads the planning transformation at ⁠Arla Foods⁠.

Danny shares his journey through various planning roles, from the production line to his current European transformation role. He provides unique insights into the cooperative business model at Arla, where 8,000 farmer owners across Europe are both suppliers and shareholders, creating a special approach to supply chain management.

He discusses the complex challenges of dairy supply chain planning, including balancing daily milk intake from farms with market demand, managing extreme seasonality (especially during Christmas), and handling products with shelf lives ranging from 24 hours to 3 years. Danny explains Arla's "milk wheel" concept and how they optimize milk utilization across different product categories.

Danny also provides insights into their digital transformation journey, including implementations of SAP IBP, partnerships with O9 for revenue management, and custom machine learning solutions for daily demand profiles.

Key topics covered include:

• Managing a cooperative business model in the dairy industry
• Balancing milk supply from farmers with market demand
• Sustainability initiatives and incentives for farmer owners
• Digital transformation with SAP IBP and O9
• Handling extreme seasonality and product diversity
• Change management approaches for complex transformations
• The importance of maintaining an external perspective

Key timestamps:

• (02:00) – What it means to work for a farmer-owned cooperative and how it shapes planning
• (08:00) – Forecasting both demand and milk intake: the milk wheel and milk ladder
• (10:20) – Segmentation in planning: from daily milk deliveries to 3-year cheddar
• (13:17) – Demand sensing and using POS data in daily planning
• (16:09) – Anticipating demand for new products like Skyr
• (17:50) – How sustainability influences planning and farmer incentives
• (20:02) – Long-term planning in a business where cows take 9 months to produce milk
• (21:00) – Arla’s joint innovation with O9 to optimize promotions and revenue
• (24:45) – Planning for Christmas: 80% of cream sales in 2 weeks
• (25:55) – Managing direct-to-store delivery with 1,500+ delivery points
• (27:10) – Choosing between SAP IBP and other tools like O9
• (32:00) – Danny’s advice on managing large-scale transformation: shrink the change
• (35:46) – Final advice: think outside in, stay curious, and look beyond your own four walls

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