Arla is a KPS customer since 2011.
Arla has gone through some mergers over the past years and is now present in many countries. Arlas largest markets are Northern and Middle Europe and Great Britain. To achieve synergies and benefits of a large corporation, Arla has put in place its strategy „Good Growth 2020“. Independent of geographic borders and cultural differences, Arla wants to act as one company in order to further grow in a market with restricted growth potential.
Arla has implemented a single, integrated platform – based on a combination of SAP on-premises applications and cloud solutions. The implemented solution portfolio comprises SAP ECC, Ariba and Concur. KPS has supported Arla with the ECC roll-out in the countries and is responsible for the global implementation of SAP Ariba and SAP Concur Travel & Expense Management.
Arla operates within a highly volatile and price-sensitive global market. All of its 12,700 shareholders are farmer-owned dairy companies, meaning that the dairy cooperative passes on to its farmers any profits that it makes through optimization measures. Arla opted for the cloud-based sourcing platform, SAP Ariba, a fully integrated end-to-end solution, which it has rolled out to its locations in Denmark, Sweden, Finland, the United Kingdom, and Germany. In the first six months since the platform went live, Arla has already used it to process purchases worth more than 160 million Danish kroner. Most of these relate to strategic purchasing agreements; that is, traditional strategic purchasing activities by central purchasers – in combination with bid invitations for example. The platform is also being used for local purchasing activities by employees at the individual dairy farms, who have access to purchasing catalogs and e-commerce applications for their indirect, operational purchases.
“We previously experienced compliance issues with our purchasing agreements. Indirect purchasing by the employees at our different locations was poorly regulated and there was insufficient support for the employees. We expect to increase the standardized proportion of these purchases from 55 to 87 percent while at the same time reducing prices and gaining further advantages by increasing the number of centrally defined suppliers. That's where we see the biggest gain for Arla,” Senior Procurement Manager Elizabeth Bollerup, who heads up Arla’s central purchasing and supply logistics, explains.
“However, we are also going through a considerable change process in our strategic purchasing. Naturally, we first have to get used to the new tool. We have to make good arguments for a common platform for everyone in the field, and individual purchasers may still find it inconvenient to some degree. From a business perspective, however, we see vast potential in the use of SAP Ariba,” she adds.
Arla decided to implement the standard SAP Ariba system. The Arla team was supported by the KPS project manager and an international team of SAP implementation consultants to ensure that the benefits defined in the business case could be realized as swiftly as possible.
ONE ARLA with only one platform
Arla implemented SAP a number of years ago and its selection of SAP Ariba ensures optimal integration between the strategic sourcing platform and the SAP back end. This multi-level integration supports Arla’s business goal of significantly improving efficiency through the optimization of internal processes.