Customer
Olam Agri
Industry
Food & Agriculture
Key technologies
SAP TM, S/4HANA
Go-live
2022
Country
Nigeria
Olam Agri is a leader in food, feed, and fiber in high-growth emerging markets with proven expertise, processing capabilities, and a global origination footprint. Olam Agri acquired Dangote Flour Mills (DFM) fleet business in 2019 to broaden its portfolio and expand its business across Nigeria. Over the years, DFM’s fleet operations have driven robust business growth. This prompted Olam Agri to review and transform its operational strategy, incorporating technological innovation in collaboration with Mindsprint and Westernacher.
The impact:
- ~2–4 % bottom-line impact from fuel savings, planning, and optimization benefits
- 0.5%–1% revenue leakage from reverse haulage trips
- Improved controls across revenue, costs, and asset management for Fleet BU with 230 users and >1012 trucks
- 500,000 USD savings in fuel
- 98% fleet KPI match
- 97% revenue match
Tackling road challenges in Nigeria with digital transformation.
Olam Agri aimed to expand its fleet operations throughout Nigeria. However, the country’s roads are notorious for poor maintenance, with potholes, bumps, and uneven surfaces. This can lead to increased vehicle wear and tear, as well as higher fuel consumption. To address these challenges, fleet managers can develop strategies to mitigate their impact and ensure more efficient and profitable operations.
The current offline planning for fleet operations at Olam Agri in Nigeria was highly customized and complex, resulting in inconsistencies in data and gaps in following processes across various departments. This limited timely decision-making, governance, and actions. There was an opportunity to improve the productivity of the organization by automating cost allocations and implementing system-driven governance controls. Additionally, data entry, which previously required rework towards the end of the month, could be automated. The lack of visibility into truck- and trip-level P&L also needed to be addressed.
To tackle these business priorities, Mindsprint and Westernacher Consulting came together to strengthen Olam Agri’s digital foundation to enable a focus on data-driven decision-making, process excellence, and robust integration with its digital core.
The need for a new system to increase fleet visibility and profitability.
The exisitng manual planning processes for evacuation teams lacked visibility into fleet availability and the types of trucks that are on hand. This information gap led to missed revenue opportunities , particularly due to the absence of a system capable of handling reverse haulage.
Asset management also faced challenges due to the lack of digitalization. For instance, maintenance activities, spare parts issuance, and asset history were tracked manually, which hindered informed decision-making.
Manual processes for generating profit and loss (P&L) statements caused delays and inaccuracies. Furthermore, costs related to individual trucks, including spares, maintenance, and manpower, were not available. Reverse haulage revenue was not tracked, which led to potential financial leakage. Fuel issuance controls were also weak, with limited data available for monitoring and enforcing regulations. Finally, there was insufficient oversight of truck utilization.
Lastly, the absence of insightful dashboards limited visibility into profitable routes and key performance indicators (KPIs). Monthly reports relied heavily on manual efforts, impeding timely decision-making. The lack of integration between Novatrack and trip data further complicated tracking and analysis.
To overcome these challenges, a comprehensive transportation management system was required to optimize efficiency, gain valuable insights and maximize profitability.
Overhauling logistics operations with SAP S/4HANA TMS.
Olam Agri has transformed its logistics operations through the successful implementation of the SAP S/4HANA Transportation Management System (TMS). Now the company is able to effortlessly manage 20 plants and four workshops digitized with an SAP S/4HANA architecture.
An integrated and intelligent architecture built on SAP S/4HANA can reduce IT complexity and enable transparent and error-free data with comprehensive event monitoring, KPI visibility, and reporting. It provides a one-stop solution to address current operational challenges while enabling future capabilities such as reverse haul trips and 3PL integration.
SAP S/4HANA TMS is embedded with a seamless integration mechanism with S/4 Core, adding value for DFM as it plans to migrate the digital core from the current ECC to S/4HANA. SAP’s usability benefits include an intuitive UI, scalability, and effective user access management. The key technologies used are SAP S/4HANA, SAP ECC, SAP PI, BODS, and Tableau.
The system reduces manual coordination efforts between evacuation and fleet teams on fleet availability and enables the deployment of the fleet based on age and fuel efficiency. It integrates all types of movements with Novatrack and leverages the EM capability of TMS, allowing for system-based data capture of RM activities, including fault codes.
Spare part issue to trucks and related cost management for repair and maintenance activities are streamlined with preventive maintenance scheduled for approximately 400 new trucks procured last year. Asset cost and margin visibility at the truck and trip levels are tracked, with every asset and piece of equipment tagged to a separate cost center. This enables easy data tracking and accurate charge calculations at the trip level.
Mass transactions to post costs at the trip level and cost allocation at both trip and truck levels provide better financial visibility, capturing R&M costs in detail. Fuel issuance is based on trip kilometers with tight integration between TMS and ECC for fuel issuance tracking, leading to estimated savings of more than $500,000 USD in fuel costs.
Automated reports enhance operations and financial controls, improving visibility into workshop costs and efficiency. Analytical dashboards provide high-level visibility, exception monitoring, and informed decision-making.
These dashboards offer insights into daily revenue and costs per truck per trip, along with operational reports that support continuous improvements. Integration of Novatrack with SAP TMS allows for centralized status update on truck conditions, with actual kilometers reported against planned distances. Key milestones related to shipments are captured through event tracking.
Establishing a model for optimal fleet operations.
SAP S/4HANA TMS has been a game-changer for Olam Agri, giving the company a competitive edge and positioning it to meet future challenges with ease. Olam Agri’s digital transformation serves as a model for companies seeking to optimize fleet operations and gain a competitive advantage in their industry.
Result
Optimizing fuel management and costs
- Savings of $500,000 confirmed
- Enhanced fuel efficiency through analytics
- Carrying forward fuel for future trips
- Strategic truck allocation based on fuel efficiency and age
Enhancing efficiency and control
- Streamlined driver’s license tracking
- Proactive decision-making with real-time data
- Data-driven continuous improvement
- Granular cost and efficiency insights for informed truck decisions
- Reduced reconciliation effort and improved data accessibility
- Revenue-based optimizer planning for efficient freight services
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