Fonterra Oceania - Best Tech Awards 2025 Supply Chain Management
Fonterra Brands Oceania boosts planning precision and supply performance with SAP IBP Download the DocumentSAP Australia and New
Zealand Best Tech Awards
2025
Zealand Best Tech Awards
2025
Best Tech SAP
Industry WebsiteProduct and Services Featured SAP Solutions
Dairy
Manufacturer
FMCG
www.fonterra.comMilk, Cheese, Butter, Yoghurt,
Milk Powder
SAP IBP
Fonterra Oceania (comprised of Fonterra Brands New Zealand (FBNZ) and Fonterra Australia) is a consumer brands business unit of Fonterra Co-operative
Group Limited. Fonterra is a global dairy products powerhouse and leader in dairy science and innovation. The business is hea dquartered in New Zealand, with
offices in more than 40 countries, and a vast workforce supporting its daily operations.
Fonterra Oceania manages a significant portfolio of market leading FMCG brands in Asia Pacific, such as Anchor, Mainland, Per fect Italiano, and others.
Fonterra Oceania also has significant Foodservice and Ingredients businesses, which it services through 12 manufacturing site s across Australia and New
Zealand.
Since many of Fonterra’s products have a short shelf life, delivering them to customers and consumers with optimal freshness is an ongoing challenge. It makes
product planning and customer demand management a critical component of the business. SAP IBP’s real -time integration and data insights have enabled us to
do this more efficiently and reliably.
Fonterra Brands Oceania boosts planning
precision and supply performance with SAP IBP
Supply Chain Management
Industry WebsiteProduct and Services Featured SAP Solutions
Dairy
Manufacturer
FMCG
www.fonterra.comMilk, Cheese, Butter, Yoghurt,
Milk Powder
SAP IBP
Fonterra Oceania (comprised of Fonterra Brands New Zealand (FBNZ) and Fonterra Australia) is a consumer brands business unit of Fonterra Co-operative
Group Limited. Fonterra is a global dairy products powerhouse and leader in dairy science and innovation. The business is hea dquartered in New Zealand, with
offices in more than 40 countries, and a vast workforce supporting its daily operations.
Fonterra Oceania manages a significant portfolio of market leading FMCG brands in Asia Pacific, such as Anchor, Mainland, Per fect Italiano, and others.
Fonterra Oceania also has significant Foodservice and Ingredients businesses, which it services through 12 manufacturing site s across Australia and New
Zealand.
Since many of Fonterra’s products have a short shelf life, delivering them to customers and consumers with optimal freshness is an ongoing challenge. It makes
product planning and customer demand management a critical component of the business. SAP IBP’s real -time integration and data insights have enabled us to
do this more efficiently and reliably.
Fonterra Brands Oceania boosts planning
precision and supply performance with SAP IBP
Supply Chain Management
Challenges
As part of the transition away from SAP Advanced Planner and Optimiser (APO), Fonterra committed to implementing SAP
Integrated Business Planning (IBP) Order-Based Planning (OBP) for supply planning, building on an earlier move to IBP for
demand planning. While the upgrade promised efficiency and real-time visibility, it also came with several significant
challenges:
1. Navigating end-of-life technology: With APO nearing end-of-life and ECC still in place as our core ERP, ensuring
smooth integration between ECC and the new IBP solution was complex. Real-Time Integration (RTI) is especially critical
for fast-moving products like fresh milk, where any delay or data inaccuracy can have a significant impact.
2. Aligning Demand and Supply functions: The shift to OBP presented an opportunity to better align supply planning
with existing demand planning processes. However, achieving this alignment required a reconfiguration of workflows,
careful planning of data flows and process standardisation across teams.
3. Agile delivery pressures: The project was delivered by a small, agile team using internal business resources and SMEs,
requiring the team had to balance project delivery with day-to-day responsibilities and manage change across multiple
categories.
4. Customisation for business fit: To meet Fonterra’s specific planning needs, enhancements to the Interactive Planning
tool were required. These included support for alternative units of measure; time-based disaggregation; priority-based
source-of-supply assignment and calendar-based disaggregation.
5. Gaps in out-of-the-box functionality: During implementation, a few missing features in the standard solution were
identified, for example, the ability to handle subcontracting component deliveries from multiple plants. These gaps have
been logged for future enhancement via the SAP pipeline.
As part of the transition away from SAP Advanced Planner and Optimiser (APO), Fonterra committed to implementing SAP
Integrated Business Planning (IBP) Order-Based Planning (OBP) for supply planning, building on an earlier move to IBP for
demand planning. While the upgrade promised efficiency and real-time visibility, it also came with several significant
challenges:
1. Navigating end-of-life technology: With APO nearing end-of-life and ECC still in place as our core ERP, ensuring
smooth integration between ECC and the new IBP solution was complex. Real-Time Integration (RTI) is especially critical
for fast-moving products like fresh milk, where any delay or data inaccuracy can have a significant impact.
2. Aligning Demand and Supply functions: The shift to OBP presented an opportunity to better align supply planning
with existing demand planning processes. However, achieving this alignment required a reconfiguration of workflows,
careful planning of data flows and process standardisation across teams.
3. Agile delivery pressures: The project was delivered by a small, agile team using internal business resources and SMEs,
requiring the team had to balance project delivery with day-to-day responsibilities and manage change across multiple
categories.
4. Customisation for business fit: To meet Fonterra’s specific planning needs, enhancements to the Interactive Planning
tool were required. These included support for alternative units of measure; time-based disaggregation; priority-based
source-of-supply assignment and calendar-based disaggregation.
5. Gaps in out-of-the-box functionality: During implementation, a few missing features in the standard solution were
identified, for example, the ability to handle subcontracting component deliveries from multiple plants. These gaps have
been logged for future enhancement via the SAP pipeline.
Solution
Fonterra selected SAP Integrated Business Planning (IBP) as the foundation for modernising its supply and demand planning. Th e solution
was chosen for its ability to deliver an end-to-end, real-time planning environment that brings together demand, supply and financial
forecasting aligned with our enterprise-wide IBP processes.
Key solution components and highlights:
• Real-Time Integration (RTI): Working closely with SAP, we enabled real-time integration between IBP, ECC and APO. This involved
implementing a large volume of SAP notes to ensure seamless data exchange across systems.
• Simplified and scalable master data management: Master data was configured in IBP to reflect the complexity of our operations.
Compared to APO, setup and maintenance were significantly faster and more intuitive. particularly for subcontracting scenario s, where
planning for both component materials and finished goods is now streamlined.
• Flexible time-bucket planning: Planning is executed in daily buckets, with rules allowing users to easily aggregate data to weekly or
monthly views. The ability to switch quickly between time buckets and units of measure adds valuable agility to day -to-day planning
tasks.
• Enhanced business insight: The use of Analytic Stories within IBP enables teams to visualise and interact with real-time data. This
supports faster, data-driven decision-making across the business.
• Robust data integration infrastructure: Both master and transactional data were successfully integrated using SAP RTI and SAP’s
middleware tool, CPIDS, ensuring consistency and reliability across planning layers.
Fonterra selected SAP Integrated Business Planning (IBP) as the foundation for modernising its supply and demand planning. Th e solution
was chosen for its ability to deliver an end-to-end, real-time planning environment that brings together demand, supply and financial
forecasting aligned with our enterprise-wide IBP processes.
Key solution components and highlights:
• Real-Time Integration (RTI): Working closely with SAP, we enabled real-time integration between IBP, ECC and APO. This involved
implementing a large volume of SAP notes to ensure seamless data exchange across systems.
• Simplified and scalable master data management: Master data was configured in IBP to reflect the complexity of our operations.
Compared to APO, setup and maintenance were significantly faster and more intuitive. particularly for subcontracting scenario s, where
planning for both component materials and finished goods is now streamlined.
• Flexible time-bucket planning: Planning is executed in daily buckets, with rules allowing users to easily aggregate data to weekly or
monthly views. The ability to switch quickly between time buckets and units of measure adds valuable agility to day -to-day planning
tasks.
• Enhanced business insight: The use of Analytic Stories within IBP enables teams to visualise and interact with real-time data. This
supports faster, data-driven decision-making across the business.
• Robust data integration infrastructure: Both master and transactional data were successfully integrated using SAP RTI and SAP’s
middleware tool, CPIDS, ensuring consistency and reliability across planning layers.