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Innovation showcase

For Grupo Bimbo, the world’s largest baking company, cloud is the secret ingredient

Moving to Oracle Fusion Cloud Applications is helping Grupo Bimbo cook up a more nimble, efficient future


By Margaret Harrist | November 2021


If you’ve eaten Thomas’ or Bays English Muffins, Entenmann’s coffee cakes, Sara Lee pound cakes, Tia Rosa tortillas, Takis spicy snacks, Marinela cakes and cookies, Boboli pizza crusts, Ball Park hamburger buns, or Artesano, Mrs Baird’s, Oroweat, or Brownberry bread—then you’ve sampled the goodness of Grupo Bimbo, the world’s largest baking company.

With more than 200 bakeries on 4 continents, Grupo Bimbo operates in 33 countries and has one of the largest distribution networks in the world. Every day, the company delivers more than 13,000 varieties of products via some 53,000 routes that are equivalent to going around the world 100 times. Loading each one of those vehicles involves a complex calculation to get the most efficient mix of products on board.

Juan Pajon, Grupo Bimbo global vice president of information technology

Juan Pajon, Grupo Bimbo business technology global senior vice president

“For example, tortillas are very dense and heavy, while bread has a very low density,” says Antonio Parra, vice president of global digital transformation, data, and analytics at Grupo Bimbo. “So putting a combination of bread and tortillas in a shipment allows you to maximize the use of the capacity not only by height but also by weight.”

It’s all part of a complex, 24/7 operation, much of which will soon be running worldwide on the Oracle Fusion Cloud Applications Suite. Grupo Bimbo is in the midst of a multiyear move to standardize business processes and systems across the globe—and build a foundation that lets the organization quickly take advantage of new technologies.

“The transformation we are doing in our end-to-end value chain and the Oracle applications that we are deploying have a central role in the success of our vision,” says Juan Pajon, business technology global senior vice president at Grupo Bimbo.

Grupo Bimbo began deploying Oracle Cloud Applications in 2017, country by country around the world, and expects to complete the implementation in 2023. After the SaaS applications are in place, Pajon says, the next phase is to expand into predictive analytics and finally, create a “cognitive supply chain” that uses analytics and machine learning to better manage production and inventories.

For this year, Grupo Bimbo’s primary focus involves incrementally improving the company’s supply chain. Because the core of the business is manufacturing, logistics, and distribution, even a small improvement in that area represents significant gains in productivity, he says.

“We have a true 24/7 operation; we’re constantly taking orders, manufacturing, and distributing in North America, Europe, and Asia,” Pajon says. “Having visibility into our operations makes a huge difference—not only because of the traceability requirements, which are becoming more important from a legislative and business trend perspective, but also because our customers and consumers want to understand more about our products. And of course, it helps us plan more effectively.”

Global growth, global challenges

Getting good information to the Grupo Bimbo teams closest to the points of sale and production will be critical for the company’s future, says Raúl Obregón, Grupo Bimbo’s chief information and transformation officer.

“One of our star products is white bread, which has an average shelf life of only a week and a half,” Obregón says. “Grupo Bimbo has to create the right product, distribute it at the right time, and sell it at the right sales point in every country where it has presence. With more and better data, global systems, and faster, standardized processes, we can achieve this while also making the lives of our colleagues on the front lines easier and more efficient.”

 

“The transformation we are doing in our end-to-end value chain and the Oracle applications that we are deploying have a central role in the success of our vision.”

Juan Pajon, Global Vice President of Information Technology, Grupo Bimbo

But as the company had grown over the years through acquisitions and expanding operations, it also amassed a mixture of homegrown applications that existed alongside the company’s global software. And even those global systems weren’t consistent; Mexico operations used Oracle E-Business Suite Release 11, US operations used a different version of that release, and operations in the rest of the world used Release 12.

“We want to take advantage of new technologies like artificial intelligence and data analytics and use all the information that the systems are producing,” Pajon says. “But having different systems and technologies meant different master data, coding, and naming conventions. Leveraging information to get business insights wasn’t impossible, but it was difficult and complicated.”

For example, without a single consistent chart of accounts or intercompany transactions process, getting insight into finances was complex and involved lots of spreadsheets and manual effort. Also, Grupo Bimbo’s associate job codes weren’t consistent, and information linked to each associate might be kept in several different systems.

Antonio Parra, Grupo Bimbo vice president of global digital transformation

Antonio Parra, Grupo Bimbo vice president of global digital transformation

On the supply chain front, producing around 13,000 SKUs required frequent changes to manufacturing processes, says Parra, who led one of the company’s regional supply chain operations and later the global logistics function, before taking on his role in global digital transformation, data, and analytics.

While customizations of the company’s various systems were done for the right reasons at the time, he says, the silos that resulted were slowing the company down.

“Planning, integration, and inventory management move extremely fast, and we were doing that with limited, very isolated systems,” Parra says. “We relied a lot on the commitment of our people. And while we had an amazing level of execution and fill rates for the businesses we serve, which was possible because of extremely high levels of effort, we also had higher levels of waste and higher expenses because of our lack of visibility.”

Instead of moving all operations to the same version of Oracle E-Business Suite, Grupo Bimbo decided to make one of the biggest global shifts to cloud applications that Oracle has ever seen.

Moving to Oracle Cloud

“We needed to rethink our processes in order to take advantage of the SaaS offering,” Pajon says. “It was a big change from the way we used systems before, and we needed to adapt—and that is the best way to extract juice from the system, by redefining our business processes.”

With the old Oracle system, customizations made it difficult to implement updates or new innovations, so Grupo Bimbo would only do updates every three or four years.

Today, Grupo Bimbo updates its Oracle Cloud Applications every quarter, which gives the company access to new functionality and features faster. And while the cloud applications cost less in total than on-premises solutions, Pajon says that wasn’t the biggest factor in deciding to move to the cloud. It was the benefits that a steady stream of new innovations bring to the business.

“What’s more important is the agility, scalability, and how we can react to customer and operational needs faster with a cloud solution—and by cloud, I mean not only SaaS, but also PaaS and IaaS,” he says.

Given the scope of Grupo Bimbo’s operations, it’s one of the most complex deployments of Oracle Cloud technology in the world, so Grupo Bimbo leaders knew that choosing the right implementation partner would be critical. Pajon says that partnering with Oracle Consulting helped ensure the project’s success.

“This relationship goes beyond the cold letters in a contract,” he says. “We know that we have a true partner—a partner where you can address situations beyond what is written. This is a huge transformation that is more than technology for us, and we can leverage Oracle Consulting’s knowledge of the technology and the platform as well as a business perspective on how we can extract as much value from the application as possible.”

Now Grupo Bimbo is also helping shape what new features go into Oracle Cloud Applications by sharing ways to improve the suite with Oracle’s development team.

“There are things that we are learning in using the applications that we share with Oracle—and they not only address our existing needs and situation, but we are working together to keep maturing Oracle products and adding functionality,” Pajon says. “That is going to be good for us, but also good for the CPG industry as a whole.”

Bread

Supply chain fundamentals: Get the right loaf, to the right place, at the right time

A phased implementation of cloud apps

Working with Oracle Consulting on the multiphase implementation, Grupo Bimbo started by establishing a global template and rolling those applications out first in its newly acquired operations in Morocco in 2017. After deploying Oracle Fusion Cloud Enterprise Resource Planning (ERP) and Oracle Fusion Cloud Supply Chain & Manufacturing (SCM) applications in that country, it began implementation in Peru and Chile and expanded to include Oracle Fusion Cloud Human Capital Management (HCM).

Next came operations in Mexico, and in the middle of that process, the company began implementation in Colombia, Paraguay, and Argentina. Along the way, the global template expanded to include Oracle Fusion Cloud Customer Experience (CX) in countries with more complex operations.

Grupo Bimbo is currently implementing Oracle Cloud ERP, SCM, HCM, and CX in the United States, Canada, Mexico, and China—and recently went live with Oracle Cloud Payroll in China.

In parallel with this worldwide, phased rollout, Grupo Bimbo implemented Oracle Fusion Cloud Transportation Management (part of Oracle Cloud SCM) in all of its operations globally.

Turning data into big advantages

With the cloud-based transportation management system, Grupo Bimbo supply chain teams have insight that they can use to make individual shipments more efficient. Remember those bread vs. tortilla calculations to maximize truck efficiency?

But increasing transportation efficiency does more than save money. It also helps the company reduce emissions—a key focus of Grupo Bimbo’s extensive sustainability programs.

Grupo Bimbo is also driving efficiency gains through the implementation of Oracle Fusion Cloud Warehouse Management (part of Oracle Cloud SCM), which has helped the company substantially reduce inventory errors and product waste, better manage product end dates, and get products into trucks faster.

Pajon expects the deployment of Oracle Fusion Cloud Demand Management and Oracle Fusion Cloud Supply Planning (both part of Oracle Cloud SCM) will help teams around the globe improve order fill rates and increase sales growth. Those tools are in use in two operations in the US and Canada so far.

Raúl Obregón, Grupo Bimbo chief information and transformation officer

Raúl Obregón, Grupo Bimbo chief information and transformation officer

For Grupo Bimbo to be able to perform the level of analysis needed to continue improving efficiency, integration of these systems with Oracle Cloud ERP is critical, Parra says.

“Anything we do has to create a record at the time it occurs, and hopefully, that record is created automatically with no human intervention,” he says. Every sale to a customer, every ingredient from a supplier, and every box in inventory will flow through the Oracle Cloud ERP system. “We want to be able to see product in every imaginable unit, with a time stamp on everything that happens, whether it’s done by humans or machines. And we want to see KPIs and measurements on operations around each specific piece of each product.”

Better data is helping on the people side as well as the product side. Grupo Bimbo is using its improved visibility to better understand staffing and to move on ambitious diversity and inclusion goals. Oracle Cloud HCM is enabling the company to recruit talent all over the world—which, as more jobs can be performed remotely, lets Grupo Bimbo recruit the right skill sets regardless of location, says Pajon.

“The recruitment experience says a lot about the company to the talent you want to attract,” he says. “We want to walk the talk. That’s why I have a team specifically focused on digitizing every single aspect of our processes in the associate lifecycle with the company—starting with recruitment and onboarding.”

As Grupo Bimbo implements standardized technology and processes around the world, it feels more like one global company, with opportunities for associates around the world. “That gives the company and our associates far more flexibility,” Pajon says.

New opportunities ahead

Grupo Bimbo’s leadership knows that the cloud has democratized technology advantage—that all the tech it’s implementing is available to even the smallest companies, letting them parlay good ideas into competitive threats. What matters, Pajon says, is how Grupo Bimbo associates put this new technology to use to run a better bakery.

“We want to show that even though we are the biggest baking company in the world and have 75 years of experience , we don’t take things for granted,” he says. “We are driving innovation in our industry and defining the future of baking.”

Photography: Courtesy of Grupo Bimbo

Margaret Harrist

Margaret Harrist

Margaret Harrist is director of content strategy and implementation at Oracle, where she focuses on digital disruption, enterprise resource planning, supply chain, Internet of Things, and SaaS. Follow her at @mharrist.