Dan Mathieson (Zespri)
Kiwifruit giant Zespri is embarking on a four-year programme to digitise its systems to become more efficient and effective.
The "Horizon Programme", as the investment is dubbed, aims to digitise key areas of the cooperative's mission critical system across its interdependent supply chain.
Following a competitive tender process, Zespri said it would begin work in 2020 with an unnamed external partner who would provide expert support to design, build, acquire, test and deploy the cooperative's new business processes and solutions.
The first release of these was expected in 2021 with full scope of the project, including more far-reaching change, not expected to be completed until 2024.
"When complete, this project will improve our ability to collect and analyse data throughout the supply chain and make better decisions around our shipping and market allocation," chair Bruce Cameron and CEO Dan Mathieson told shareholders in the cooperative's annual report, released this week.
"The majority of our processes and systems were designed over 20 years ago," the report further explains. "Since then our industry has evolved dramatically in scale, international presence and complexity but our investment hasn’t always kept pace."
With ageing processes and systems built to support a much smaller industry, Zespri was in a position where doing nothing with our operating systems was "simply not an option".
The Horizon programme would fundamentally overhaul the foundations of the business.
In mid-2018 Zespri flagged plans to invest up to $70 million in its systems over five years, however, the budget for the Horizon Programme is not known.
Zespri has been in Microsoft's Azure public cloud since 2014, after it claimed the world's largest production SAP platform migration with partner Datacom.
"Beyond mitigating a number of risks, the investment will help sustain our industry’s strong growth trajectory and enable Zespri to become more agile and efficient," the annual report said.
A detailed blueprint of the programme's scope had been created over the past 12 months. That blueprint reached across Zespri's value chain from grower to consumer.
"It will address global finance, grower enablement, supply chain, sales processes and systems and digitise the sales and operations planning processes and system," the report said.
"Put simply, it involves investment in the platforms that enable us to get much more value in the way we get our fruit to market and money back to growers."
Investment in global supply chain management would lift Zespri's ability to capture real time data, to draw insights and to make better decisions.
"This includes areas such as track and trace, freight planning and forecasting and in our tactical choices on storage locations to meet future market demand.
"It will allow more proactive management of fruit in the supply chain for quality issues.
"Ultimately, there will be value for growers from streamlined, efficient processes underpinned by robust data and scalable systems."
Another critical area was how the cooperative engaged and enabled growers.
"Our current online tools were designed to meet growers’ needs well over a decade ago," the report said. "Today we’re acutely aware of the need to better harness data from the orchard, such as crop count results and yield, water use, fertiliser input and environmental performance.
"We need solutions to help consolidate, simplify, automate and disseminate this information."
The Zespri board was focused on a prudent governance and funding approach for the Horizon Programme given the scale of the investment over four years.
Zespri was aiming to help fund the investment through efficiencies such as improved procurement processes and economies of scale.
