Multinational dairy coop implements touchless close by automating 98% of processes

Company overview

Arla Foods is an international dairy cooperative owned by 9,400 farmers and is the largest producer of dairy in Northern Europe. The company is responsible for 1.5 million cows, collects 13.7 billion kilos of raw milk for processing at its 60 sites and sells its products in 153 countries, including the well-known brands Arla®, Lurpak®, Puck® and Castello®.

Business challenges

After mergers in Germany and the UK, Arla needed employees everywhere to consistently perform the same standard steps in each of its business processes. This included financial controlling activities, balance sheet reconciliations, intercompany accounts and month-end adjustments.

The company also wanted to reduce the period-end close by at least two days to get an overview of month-end activities and dependencies.

Arla found its account-to-report (A2R) process was fragmented and lacked transparency. Just 50% of the 45 Level 3 processes were harmonized, and as a result, dozens of employees were forced to spend additional time validating and correcting errors in the close. Also, employees sometimes lacked access to vital information and documentation as it was stored locally, further compounding close-related challenges.

Employees had been executing all tasks manually using Excel and checklists, which was time-consuming, inefficient, error-prone and costly. It had become incredibly difficult to achieve the process consistency and standardization Arla required.

Solution

Arla selected Finance Automation by Redwood because of its strong track record of SAP and ERP integration, as well as its proven ability to automate nearly all close-related processes. The solution would enable Arla to achieve a touchless close.

In Arla’s initial discovery workshop with Redwood, the company learned it could achieve 100% process and data quality harmonization and a touchless close.

Results

Arla successfully deployed automation to harmonize its back-office financial processes and increase service delivery.

Strategic automation reduced time required to complete the month-end close by 30%, from 10 to seven days, and gave Arla the ability to monitor close process status in real-time across financial business units while running a touchless close. This three-day reduction in the month-end close significantly exceeded Arla’s original target of a two-day reduction.

Arla’s ability to close its production orders earlier further contributed to improved quality and reduction in the overall time-to-close. Arla employees can now meet SLAs through each stage of every process, relying on predictive alerts to monitor their status.

Automating 98%, or 121 of the 124, financial close-related processes allowed the finance and accounting organization to focus on more value-added tasks and significantly improved the integrity and quality of the company’s data. The automation reduced the effort required from employees by up to 50%.

This has helped build trust in the accuracy of the information they depend on for critical insights and analysis. In addition, Redwood’s auditability and governance provide Arla with full visibility through reliable access to who did what, who approved it and when.

Juul adds, “The people using and working with Redwood really value and appreciate the transparency and auditability of the automation platform.”

The future with Redwood

Arla sees potential in expanding automation to deliver positive outcomes in other areas of the business. Juul notes master data and IT would also gain from the enhanced quality and consistency associated with Redwood.

“We have the opportunity to automate a lot of the daily, recurring, repetitive tasks across other parts of our global operations, which could deliver even greater benefits than we are currently realizing by automating monthly financial closes processes in accounting,” says Thomsen.