Ever baked a loaf of bread? This staple of daily life has a few simple ingredients, but that doesn’t make it an easy recipe to perfect. To run a successful bakery business, keeping the technology recipe simple is just one way to ensure the organisation rises to the right level, as Hovis Supply Chain Planning & IS Director Dominic Howson tells diginomica.
We make on average 1.5 million loaves a day across the UK and have been trading as brand for over 130 years.
Hovis has eight bakeries, one mill dedicated to Hovis, employs 2800 people, and with bread being a staple of the British diet, the CIO describes the business as a very fast moving consumer goods maker.
It is fiercely competitive market with strong brands and a growing private label sector.
Hovis is one of the leading brands in the market and has demonstrated strong growth in recent years. That market competition ensures that the CIO is a key ingredient in ensuring Hovis remains competitive.
We have focused our whole business on quality and that has worked for us. Whilst there has been a big growth in private label bread, we have seen the Hovis market share grow with our focus on the quality of the product.
The rise of a new role
Howson joined Hovis as its senior technology leader as the business divested itself from Premier Foods. Given a new start, Howson took the opportunity to create a new recipe, one that made maximum use of cloud computing.
I don’t worry about my SAN; I don’t worry about processing power and we rarely have a conversation about infrastructure. This is where the role of the CIO is changing, it is not about traditional IT any more. We fix and improve business processes with technology.
An example of this focus on the business processes is how Hovis has its SAP enterprise resource planning (ERP) in a private cloud. CIO Howson has made sure that Hovis has not bespoked its existing SAP environment, allowing the opportunity to focus on the potential implementation of the SAP S/4 HANA Public cloud solution.
Change your business to fit it and let’s use the processes provided, he says of how Hovis focuses on baking bread, not developing complex business processes that require the ERP to be customised.
You take products off the shelf and use them how they should be used. In previous roles we spent millions on implementing SAP and then developed custom code on top of it, of which a large part of it was never used
That lesson shaped how Howson would approach technology following the divestment from Premier Foods in 2014.
It was a good opportunity to do things differently, we do not operate like a bank or NASA, we are able to take our business onto the cloud only whilst managing the risk appropriately, there are businesses out there where this approach would be more challenging.”
We are a simple business, we take an order, we make the bread, we deliver it and then we invoice it.
As head of supply chain planning and IT, Howson has seen how powerful data is for an organisation; giving him an insight into how raw materials coming in and loaves of bread going out of the other end drive business.
We are monitoring 70 silos (flour storage) at the bakery plants and the engineers are putting in new tools so we can surface data that will enable the Wellingborough mill to own the data and make better use of it. This will be done with visualisation tools in Microsoft Azure and Business Objects and enables Hovis to optimise the logistics of milling flour and delivering it to the bakery.
As a result of this the replenishment of flour will be centred into the milling operation and not at the bakery. Allowing the bakery to focus on making bread.
We are about to do an AI pilot on plant in one of our bakeries. Lost throughput and increased waste are driven by small stoppages in any of the key elements of the plant i.e. mixer, oven, cooler, slicing. The use of AI will enable us to predict and schedule maintenance before a breakdown or stoppage happens, this in turn will lead to increased throughput and reduced waste.
With the raw materials being one of the greatest costs to Hovis, if a bread mix is spoiled by a stoppage in a bagging, slicing or oven it has a direct impact on the bottom line of the business. Howson has also embraced automation to simplify the business operations.
A trial with six year old technology challenger Altviz has seen Hovis tackle a significant issue where finished product is put to waste using Altviz’s Intelligent Automation Platform to issue notifications of issues faster than the ERP can.
The Altviz project is a proof of concept, they have a cloud platform that is event driven and tracks our order data with some augmentation.
As a supplier to retailers for their own brand bread, Hovis can potentially receive 24 hours notice of order requirements, but in order to fulfill the order, it has to begin baking ahead of receiving the order, effectively baking blind, the CIO says. Event-driven technology can reduce the likelihood of wasted mixes.
We have some great SCADA (Supervisory Control and Data Acquisition) tools across our operations and we have wired all the data into BigQuery to find trends.
With a rich data layer, Howson and Hovis have been able to then build a set of applications for the organisation to use that data to improve all areas of the business.
We have built Apps in Azure for sales order processing consolidating EDI, Van Sales and telesales and major breakdowns incident management. Another App we have developed in Azure allows my team to see nationally what our service is going to be like for the following day across all our manufacturing and logistics sites; and the next generation of that App would be to give visibility to all of our customers of our expected service.
Howson’s small team is also looking at how it can use Google Maps and order data to work on the most efficient routes to the customer locations across a possible 12.1 million routing combinations that the bread could travel on. The aim being to not only improve logistics, but to use map and order data to decide which bakery fulfills an order, rather than assuming that the nearest bakery completes the request, optimising the bakery network as a whole.
We have embraced robotic process automation (RPA) and have implemented that technology in a number of functions in finance, human resources, IT and the supply chain. For example a recent automation has transformed our approach to credit processing, allowing a retailer to request a claim for shortages or damaged product, an automation bot generaties the credit note, tying the processes together and ensuring the ERP and the relevant orders are updated without the need for human interaction. This is taking all of the potential error prone process steps out.
There are so many opportunities for a credit note to go the wrong way and you end up with lots of open interactions, which is not good for process efficiency.
There is real value in being able to change the career paths of people as a result of changing technology. Because of RPA, one of our master data team members is now leading the automation team and that is an exciting career change.
Playing the game
We haven’t had massive IT capex spend in the last five years, we focused the budget for setting up the business to give us a platform where ongoing capex investment in infrastructure was not necessary, we don’t need to refresh or maintain any tin.
Howson’s key suppliers include Vodafone, SAP, Microsoft, Google, Logicalis and Eden House. The widespread use of cloud means his opex is approximately £5 million a year and there is no significant IT capex.
The set up offers the ability to flex up and down as we need.
The CIO has a team of just 20 in IT, he is also responsible for a further 30 in his Supply Chain Planning function and small teams are a constant theme in Howson’s life, away from Hovis the CIO is at the centre of Oxfordshire’s junior football world as a manager and a coach.