TreeHouse Foods’ new enterprise IT strategy drives supply chain success

Why is TreeHouse Foods moving from a holding company model into an enterprise model?

We’re one of the largest private label companies in North America with 17 different categories of snacks and beverages, and this is a great time to be in the private label business. With the high price of groceries an ongoing concern, people are constantly looking to stretch their dollars. The products our company makes allow consumers to buy high-quality, good-tasting food for an average of about $40 less per shopping trip. And retailers benefit from their ability to bring customers into their stores, grow their own brand loyalty, and demonstrate commitment to their customers.

What advantages does moving to an enterprise model offer?

Many of our competitors compete in one category. Take pickles, for example. If we only buy jars for pickles, we don’t get much leverage with our suppliers. But if we buy jars for 10 different product lines, we can scale. With the enterprise model, we can do more vertical integration in some product lines. We recently acquired Farmer Brothers coffee, for instance. Previously, we’d pack individual pods with coffee we bought from Farmer Brothers, which roasts, grinds, and flavors the beans. Now we’ve moved from buying the beans to owning the entire grow-to-delivery process. We get a lot of scale out of doing that.  

What is the IT strategy you’ve developed to drive this new operating model?

Our strategy is to align the IT organization with the overall purpose of the company, which is to engage and delight one customer at a time. Our pillars to drive that mission are leading product platform depth, building a world-class supply chain, cultivating strategic customer partnerships, and creating a value-led, high-performance workforce. The IT strategy delivers capabilities in each of these growth pillars. In leading platform depth, we’re finding ways to bring the companies we acquire, like Farmer Brothers, into our enterprise systems as seamlessly as possible. We’ve never ground coffee ourselves. We need to understand what to do to ensure these product lines run efficiently within the TreeHouse Foods construct.

In our supply chain, how can we apply connected worker and plant automation technologies to our operations? How can we connect the operator on the shop floor with the machines they run? How do we use automation to keep the operators informed about what’s going on with the machines? Before we thought: “Let’s upgrade SAP.” But today, the mindset is, “Let’s put in a tool to help the factories be more productive.” The solution could be automated guided vehicles or a connected worker platform – or both, plus other applications that allow us to both create the culture of excellence we want, and the high-quality products consumers demand. The shift here is that we understand both the business problem and the technology solution.

How are you raising the business acumen of your team?

I took my staff on a tour of our plants, where we sat down with plant managers and got feedback. The manager would say, “We’ve got some switches that don’t work over here. The Wi-Fi is wonky over there. We don’t know what to do when the power goes off. How do we restart the computer room?” We received enough of that kind of feedback and realized people weren’t using the systems as we intended. The solution was to put more IT people back in the plants. 

Prior to me joining TreeHouse Foods, operations-focused technology was completely separate from IT. Today, some of the operations technology team works for me, and we moved them to the same floor as the rest of the team. Now we can have a cup of coffee with the person who’s trying to put in a new production line in the factory but doesn’t have enough open ports. We can merge our expertise and get to the right solution in a faster, more collaborative way.

What’s is your target architecture?

My goal is to have enterprise solutions with one application for each major process. I want one contract management solution and one ERP application, with very little customization, and only for a real business advantage. The goal is to be agile and leverage one enterprise ERP, one business intelligence environment, one AI environment, and more cloud-based solutions. It’s all about balance, and we’re working hard to get it right. Our strategy is to support our growth pillars with an intelligent enterprise, including automation, AI, and analytics, and keep the environment secure in an ever challenging cyber world. This means being more thoughtful about choosing platforms. People can’t buy software and then say, “I bought this. Ready to implement it?” They need to understand that the cost of the software is not the whole story. The security and maintenance will cost considerably more.

How will you know when the IT team has the mindset and culture that you’re targeting?

That will be when I get the first phone call from a business partner who’s thinking about new software, and when my team can have peer conversations with our partners, because we have business expertise in IT, not just the ability to run pipes and devices. It’ll also be when we all understand that IT’s customers aren’t the logistics and finance teams; our customers are the company’s end customers, and their customers. We’re not a systems integrator, who completes a project and then goes away. IT is a legitimate business function.

What advice do you have for CIOs looking to drive this kind of transformation?

The first is to listen. I came from industrial manufacturing into consumer packaged goods, which is a very different environment. In my first year at TreeHouse, I’d been to half of our plants. I decided to create an enterprise IT structure and capability set after listening to how the company is changing, which allowed me to see we needed enterprise solutions and no more one-offs. The second is to take the help that’s offered. The executive team meets with me and my direct staff once a month to talk through priorities, barriers, and architectural standards. They are key leaders in our change to enterprise systems. Finally, I’d advise CIOs to be patient enough to bring along the team — both inside and out of IT. If I don’t take the time to bring along my colleagues, we all fail. The balance I try to strike is to listen and be patient, but then I need the courage to chart the path, stick to it, and drive forward.