**California**: Blue Diamond Growers has adopted SAP Transportation Management and SAP Integrated Business Planning to optimise its logistics operations, improve supply chain resilience, and enhance sustainability efforts, while navigating challenges from pandemic disruptions and focusing on artificial intelligence advancements for future growth.
In late 2022, Blue Diamond Growers, a prominent almond producer and exporter based in California, commenced a pivotal upgrade to its logistics operations by implementing SAP Transportation Management (TM) systems for its global transportation needs. This strategic initiative aimed to address significant supply chain challenges exacerbated by the disruptions of the COVID-19 pandemic, particularly relating to the procurement of shipping containers. Although the introduction of SAP TM alleviated some challenges, issues persisted around high transportation costs as vendors continued to provide estimated costs that Blue Diamond accrued until containers became available, a situation compounded by inadequate forecasting and accrual systems.
In early 2023, Blue Diamond embarked on further enhancements by adopting the SAP Integrated Business Planning (IBP) system, which significantly improved its integrated planning processes. This integration allowed the company to achieve better visibility in its logistics planning, thereby resulting in more timely carrier procurement and reduced operational costs.
Steven Birgfeld, Vice President of Information Technology and Services at Blue Diamond Growers, elucidated the challenges and transformations faced during this period, specifically stating, “Like most companies, our ocean freight supply chain suffered immensely during the pandemic and that was our primary driver to embed SAP TM on our SAP S4 system.” He emphasised the importance of leveraging the Business Network for logistics within this integration. By mid-2023, the company successfully went live with these updates for both domestic and export logistics.
The integration not only streamlined operations but also enhanced customer service capabilities, reducing response times significantly for the customer service team. As Birgfeld noted, “Now we only had to refer to one system to get all the answers instead of different ones, leading to better accruals, flexibility, and supply chain resilience.” The upgraded system also improved the company’s ability to monitor discrepancies in data, facilitating swift resolution processes with carriers.
An innovative feature of the new system is Project 44, a visibility extension that complements SAP IBP and SAP TM. According to Birgfeld, “Project 44 is an SAP partner that captures data from hundreds of thousands of carriers in almost real time,” enhancing the firm’s ability to anticipate potential delays in delivery schedules.
Despite the advancements, the transition to integrated systems posed initial challenges for Blue Diamond’s logistics teams, primarily stemming from the switch from manual processing methods. Birgfeld stressed the importance of trust in data management and highlighted the company’s continuous efforts to rectify data inaccuracies through collaboration with SAP and Project 44. “Change management and data management were a big part of our learning,” he stated.
Today, Blue Diamond’s four integrated systems operate seamlessly within a hyperscale environment hosted on Google Cloud. The company is currently evaluating an upgrade to RISE with SAP, sensing the inevitable nature of such a transition. Birgfeld remarked, “The question is not if we upgrade to RISE but when we do it, especially since sustainability and AI are the way forward.”
Additionally, Blue Diamond Growers is keenly focusing on enhancing its environmental, social, and governance (ESG) metrics. The recent stringent ESG mandates in California have pushed the company to refine its logistics operations towards sustainability. The upgrade to the 2023 version of SAP S4 has enabled the firm to better track carbon emissions from freight shipments, allowing for more environmentally conscious logistics planning. Birgfeld commented, “We want to plan our logistics just-so, to save gasoline, resulting not only in lower costs but reduced environmental impact as well.”
The ongoing digital transformation does not stop at logistics. The firm aims to expand its initiatives into production and plant maintenance processes, with plans to introduce new systems from the SAP ecosystem focused on production planning and detailed scheduling. Birgfeld noted, “We see it really closing the whole extended planning and analytics capability gap,” underlining the company’s drive towards comprehensive operational excellence.
As Blue Diamond continues to optimise its supply chain, the integration of artificial intelligence into various functions of the business is underway. Efforts include crop forecasting, customer service improvements, and taste trend predictions. Birgfeld expressed optimism about the future of AI within the company, stating, “There are many opportunities, but we need to figure out how best to use those… we must consider a lot of aspects like data and governance before we build a clear path to using the power of AI.”
Blue Diamond Growers’ journey through digital transformation and enhanced logistics illustrates the profound impact of integrating advanced ERP systems in tackling supply chain complexities while advancing sustainability initiatives. As the company looks ahead, the emphasis on continuous improvement and the strategic use of technology positions them as a leader in the almond industry.
Source: Noah Wire Services
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