Orkla Food Ingredients’ Dynamics 365 transformation is a sweet upgrade

Orkla Food Ingredients (OFI) is a fast-growing multinational supplier of bakery, ice cream, and plant-based items whose fractured IT landscape froze efficient collaboration and cross-selling. The company chose Microsoft Dynamics 365 to unify its data, optimize its business processes, and facilitate growth.

Orkla ASA (XOSL: ORK) is a leading industrial investment company focusing on brands and consumer-oriented businesses. Orkla’s investment portfolio consists of 12 independent companies, one of which, Orkla Food Ingredients (OFI), is Europe’s leading supplier of margarine and butter blends, bread and cake mixes, yeast, and ice cream ingredients. Founded in 1999, OFI supplies industrial manufacturers of grocery products, artisanal bakeries, ice cream kiosks, and consumers through direct sales in 23 countries across Europe and in the United States, with annual revenue last year of nearly NOK19 billion. OFI’s recipe for success? Staying close to its customers and responding to local needs with the resources of a global conglomerate.

Clashing local flavors

OFI’s growth is sweetened by acquisitions, but the company’s “multi-local” business model keeps the DNA of each new brand intact. Its “win locally by playing as a global team” ethos endows the collective of 60 small and midsized companies with the power of a billion-dollar corporation and allows individual businesses to reach markets that would otherwise be impenetrable.

But local management and independent operations created a scattered IT landscape. OFI found itself with several disparate enterprise resource planning (ERP) systems that didn’t support collaboration at scale. Steen Viberg, VP of Digital Operations, remembers what it was like. “We were sharing product information and prices primarily [in] Excel sheets,” he says. The only way the company’s sales and distribution representatives could understand what products were available was by traveling among the companies to meet with their manufacturing colleagues or attending internal product fairs.

Warehouse operations, too, were siloed. Mapping out a day’s inbound and outbound processes was a heavily manual task. It was difficult and time-consuming for warehouse managers to be confident they were planning to receive the right purchase order from the right vendor at the right time. With their isolated warehousing systems, they ran the risk of running out of inventory, causing fulfillment delays and mistakes.

With its future growth on the line, OFI created a cross-group initiative to anchor the company’s digital strategy in a single shared ERP solution that would support all business units with more transparency and less business complexity. The ambitious effort would replace all local ERP systems with a common platform that would serve as a foundation for collaboration and improved business processes.

The taste of success in warehouse efficiency 

One of OFI’s brands that’s already benefiting from Dynamics 365 is KåKå, Sweden’s leading supplier of bakery ingredients and accessories to bakeries, patisseries, and the bakery industry. Niclas Strand, KåKå’s warehouse manager, describes a more unified workflow with Dynamics 365 warehouse management that eliminates the siloed, manual inbound and outbound processes of the past, which often left him wondering if the purchase order that was arriving was the one he was expecting.

The nature of KåKå’s inventory makes its warehouse setup particularly complex—two warehouses, each with 6,000 to 7,000 pallets, and only 25 people in each warehouse responsible for replenishment, putaway, and outbound activities. Three zones accommodate frozen, cold, or ambient goods. In a typical day, Strand’s teams pick for up to 55 lines per customer according to temperature, expiration dates, and weight, carefully prioritizing for loading times and taking into account customer information like whether an elevator is available at the receiving end when they’re building pallets. 

The processes align with the brand’s promise to its customers. Articles are delivered on time with the highest quality. “We have better control over slow-moving and high-moving items, seasonal transfers in the warehouse and short pick lines,” says Strand, adding, “we’ve gone from 38 lines picked per hour to 56,” a 44% increase. Because staging areas are optimized, workers now handle over 450 lines and manually pick 7,000-9,000 kg in a single shift. 

The warehouse teams at KåKå are confident that Dynamics 365 has improved accuracy. “With Dynamics 365, we trust the system,” says Strand. “It's easy to retrieve information and know it’s correct; people can just drive the forklift over. All the considerations we have for our picking, packing, and customer details, the system is doing it for us.” 

They’re saving significant time, too. As soon as the order entry deadline has passed, packing slips are created and trucks are loaded. “Our inbound process alone is three times faster which gives us more time to spend on safety—ours and our customers,” says Strand.

The future looks delicious

KåKå is just one of OFI’s successful Dynamics 365 implementations. At the end of 2024, 15 business units in nine European countries are operational on the OFI solution. And at OFI, Dynamics 365 is now a key ingredient in its continued growth and expansion which accounts for its ambitious plans to continuously manage five to six yearly go-lives. The company is moving to consolidate and harmonize all business units on its shared, evergreen platform. It’s also adding complementary third-party solutions for accounts payable automation and B2B e-commerce, along with artisanal solutions that tightly integrate product information management with Dynamics 365 and support efficient collaboration and information sharing across business units.

All in all, “The roll-out of Dynamics 365 is a cornerstone in establishing a common digital platform in Orkla Food Ingredients,” says Johan Clarin, CEO, Orkla Food Ingredients. “We are seeing more and more benefits materializing as we continue to learn, develop and use the tools available to our business users,” he continued. The cherry on top? The company is also executing a standardization strategy for customer relationship management with Dynamics 365 using Dynamics 365 Sales, Customer Service, and Customer Insights to enhance its customer experience and even support new product development, because after all, there’s always room for more dessert.