Overview

Fonterra Co-operative Group Limited is a multi-national dairy cooperative, owned by about 10,500 New Zealand farmers. The company is responsible for approximately 30% of the world’s dairy exports, and with revenues in excess of NZ$19.87 billion, it is New Zealand’s largest company and accounts for 25% of the country’s total exports.

With a network of offices, productions sites and technical centers across the globe, it employs approximately 16,000 people; collecting 22 billion liters of milk annually in order to make dairy products available to millions of consumers in 140 countries.

Supernova Award Category

Data to Decisions

The Problem

Fonterra’s manufacturing data was a mixture of separate paper-based and electronic systems. This meant data was at times inaccurate, incomplete and largely only understood by certain individuals. It also meant the data could not be easily contextualized or shared with other facilities or at the enterprise level. In addition, there was no centralized management process, which created version control issues. Fonterra faced many challenges, including:

• Some facilities had an OEE score of only 40%, indicating opportunity might rest within a “hidden factory”
• Limited production capacity to meet customer demands for some products, meaning incurring possible expenses to build more plants
• A lack of standardization across its global plants that impacted quality and consistency
• Unplanned downtime due to events that were difficult to identify and troubleshoot for a speedy resolution
• Largely manual data collection and aggregation that lacked reliability, consistency and context, which impacted the organization’s ability to make informed, timely operational and business decisions

Fonterra needed to find an innovative and sustainable way to improve processes across its manufacturing facilities to be able to make critical operations and business decisions faster and meet the growing demands of customers around the world – all while ensuring its products were made with the same high quality in each facility.

The Solution

Fonterra’s primary goals included improving OEE across facilities and production capacity without the capital expenditure of building more plants. It also sought to mitigate potential quality issues, reduce unplanned downtime, and democratize data to inform day-to-day operations, forecasting and strategic business decisions.

To reach these goals, Fonterra turned to its trusted, longtime partner Rockwell Automation and its alliances with Microsoft and PTC. The companies combined Rockwell Automation’s control hardware and software, Microsoft’s cloud data sharing and storage capabilities, and PTC’s application development platform designed for the IIoT. The alliance succeeded in creating an innovative edge-to-cloud-based solution that connects information among development, operations and maintenance teams through a singular, trusted data environment.

The results

Prior to this collaboration, Fonterra did not have secure, robust means to aggregate data into a usable, visualized format to empower insights and decisions in operations or across all levels of the organization.

Now, end-to-end from the plant floor through the enterprise, decisionmakers can access real-time data and analytics to monitor and assess operational effectiveness and business growth opportunities. They also can more quickly diagnose and address unplanned events, such as equipment failures, discern root causes to eliminate similar events, all while standardizing processes, quality and benchmarks across geographies.

This digital transformation also enables many other aspects of the business to work more efficiently and effectively, resulting in optimized resources. For example, it enabled the research and development (R&D) team to leverage real-world data to run functional processing improvement scenarios without impacting production. Previously, R&D had to take over a production line to complete these types of tests.

In addition, Fonterra uses the data to inform its environmental responsibility and sustainability initiatives, such as by tracking facility carbon emissions and energy consumption to identify areas for improvement, as well as to maximize product yields while minimizing waste.

Metrics

The digital transformation solution met and enabled all of Fonterra’s primary goals. As of April 2021, the average OEE score for Fonterra’s focus plants has improved from 40% to more than 60%. Having found its “hidden factory” with more efficient operations, the company successfully sidestepped the need to invest in building new facilities. Plant operators spend less time collecting and analyzing data, and more time on improvement initiatives. Meanwhile, executives can make agile, data-driven decisions to hold steady or pivot as necessary to keep pace with market demands.

The Technology

Fonterra leveraged the strategic partnerships between Rockwell Automation, PTC and Microsoft – using ThingWorx to provide process digital twins and Azure to aggregate and store contextualized information to provide an enterprise-level view. Leveraging its strategic partnerships, Rockwell Automation successfully built the architecture for a solution that could deliver unified advanced analytics at scale without requiring a large capital investment as they deployed each new application.

Disruptive Factor

As a result of this project, Rockwell Automation expanded its joint alliance management team with Fonterra to include both PTC and Microsoft, forming a cornerstone for continued growth among all the companies involved. The initial alliance between Fonterra and Rockwell Automation, Microsoft and PTC was formed as a test bed for a powerful co-innovation initiative to create a repeatable digital transformation model to meet Fonterra’s needs and be scaled to benefit other manufacturers. To date, the companies have co-developed over 20 use cases.

This project also helped drive a digital transformation culture at Fonterra. The system proved itself, impressing stakeholders with the accuracy of the information, as well as the ease with which they could now access, analyze and share it. In practice, stakeholders were spending far less time crunching numbers and far more time using analytics to identify and inspire opportunities, plant managers were zeroing in on areas for improvement, and responding to and solving errors faster, and executives were making agile product line, production and growth decisions. Managers even began installing large TV screens in common areas to highlight the location’s operational excellence wins, spurring healthy competition among peers and plants to continuously meet and improve upon productivity, quality and efficiency benchmarks.

Shining Moment

As a result of this initiative, the digital transformation initiative reached a cultural turning point within these Fonterra factories. Key stakeholders, executives, plant managers and factory floor workers were able to spend more time focused on critical thinking needs and less time gathering and contextualizing data.