Alltech fortifies business operations with Dynamics 365

The lay of the land

Over the past 10 years, more than 20 companies around the world have joined the Alltech family. Through these strategic acquisitions, Alltech has strengthened its commitment to its customers, providing tailored solutions that increase the profitability, efficiency and sustainability of their operations. This resulted in exciting new services and technologies to support the agri-food sector globally, but there were growing pains. Alltech soon had 16 enterprise resource planning (ERP) systems across 80 manufacturing sites in 120 countries. This made it difficult to get a comprehensive look at the company’s operations overall, inhibiting business agility, supply chain visibility, productivity and cashflow. 

The company’s leadership quickly recognized the need for a common platform to optimize the value chain and gain reliable and transparent insights across all business units. Moving from on-premises data management to the cloud with Dynamics 365 was the clear choice. With a large portfolio of nutritional technologies manufactured at more than 80 sites globally, Alltech needed a solution that was robust, yet flexible enough to meet the wide range of compliance requirements inherent in a global agricultural business. 

“A different tool wouldn’t allow us to be as agile or have the flexibility to adjust parameters,” said Christina Schull, Alltech’s Chief Information Officer. “Microsoft Dynamics 365 has been the tool from the start because of its extraordinary flexibility.” 

By unifying its legacy ERP systems under Dynamics 365, Alltech would be able to seamlessly harmonize multiple, disparate business units. The company has now launched a multi-year digital transformation, based on Dynamics 365, aimed at increasing efficiency and productivity while continuing to enhance user experience and customer satisfaction.

Alltech’s reach continues to expand, and Dynamics 365 aligns with Alltech’s growth strategy. 

Moving forward, Alltech must be able to integrate new entities quickly to keep its diverse portfolio of companies aligned. The partnership with Microsoft supports rapid progress for Alltech in the growing and dynamic digital agriculture market.

Crowded fields and widespread growth 

As a long-standing and growing business in a dynamic market, Alltech was in the all-too-common position of managing ERP systems that were not only disparate but highly customized and reliant on siloed data and tribal knowledge. Another challenge was that the varying systems did not use the same accounting systems or metrics. 

Generating financial reporting was laborious and the reports could be cumbersome. The calculation of cost of goods sold (COGS) varied by business segment, making it difficult to consolidate common vendors and items, and team member time and effort was spent on tasks such as manually maintaining complicated Excel worksheets. This lack of standardization and automation hampered the ability to make quick decisions — a significant obstacle in the complex and rapidly evolving agriculture market.

Limited visibility of inventory levels across multiple locations was also a pain point. Inventory management in some locations was handled with time-consuming manual operations, often in an ad hoc fashion that had developed to keep up with constant growth and demand. The inventory process was slow, useful forecast and demand planning tools were not available, and maintaining additional safety stock was costly due to the perishable nature of many agricultural products. Alltech needed more advanced warehouse planning optimization and material resource planning to support inventory management.

With Dynamics 365, supply chain managers could replenish stock more proactively; customers could receive their deliveries quickly; and finance teams could report results expeditiously.

A recipe for success

Alltech’s executives needed standardization and transparency to take the agricultural giant to the next level. Dynamics 365 streamlines processes and unifies data, including flexible product information management and financial dimensions, empowering stakeholders to make business-driving decisions exponentially more quickly. 

“In the past, trying to consolidate global information was often done manually and could become very labor intensive,” Schull said. “But now, connecting them with Dynamics 365, that’s information we can get immediately.”

Moving to a few regional installations of Dynamics 365 with unified processes and a common data model alongside Azure Data Lake, effortlessly supports consistent measurement of operating metrics like COGS and visibility across the enterprise.  

The out-of-the-box capabilities of Dynamics 365 have flexibility and scalability baked right in. It delivers end-to-end business process consistencies that optimize Alltech’s operational efficiencies while enabling the company to seize on innovation opportunities as they happen.

Taking root in Dynamics 365 

Migrating multiple ERP systems with global regulatory and data residency requirements can be daunting in scope, time and cost. Microsoft FastTrack and the AIM Migration Program offered Alltech a bridged approach. The team started by tackling one of the company’s most customized systems, and within only a few months, Alltech’s entire code base had been upgraded to Dynamics 365. Testing was completed across all critical processes before embarking on the larger program of work.  

A key factor in this swift success was that Alltech’s leadership and business teams were committed to aligning business processes to get the most value out of Dynamics 365. This, along with a strong change management plan and the support of the FastTrack team, enabled Alltech to meet the challenge.

Alltech was committed to improving its team members’ experience as well. The implementation team ensured that all best practices and essential activities, including multiple rounds of data migration, performance testing, integration testing and user acceptance testing sign-off, were completed before going live. This scaffolded approach increased the confidence of team members to run their business processes in the new system. Ongoing in-tool guidance helps operations stakeholders master day-to-day processes and quickly help at the point of need . This accessibility is also improving data quality and reducing data migration risk.

A global corporate template was designed—with input from all segments and representation from each region—as the basis for subsequent deployment events across the globe. This core template can be modified to suit any individual deployment’s localization and regulatory requirements. Modifications are then integrated back into the global core to support the objective of a single code base.

Harvesting the rewards

Alltech has realized multiple benefits from the transition to Dynamics 365.

Cost reductions

Inventory management:
One of the most significant gains realized since implementation is the drastic reduction of days of inventory on hand. Alltech’s manufacturing plants are interconnected. And Dynamics 365 Supply Chain Management has helped Alltech eliminate inefficiencies in the process by enabling a cohesive vertical integration that gives visibility to each plant and each point in the supply chain, and more accurately forecasting customer demand. Dynamics 365 Supply Chain Management master planning is bringing savings to Alltech by reducing the large stockpile it once needed to keep on hand. 

Production optimization:
The easy integration of Dynamics 365 with Alltech’s manufacturing system brings real-time visibility to work-in-process inventory. Using scanners to track inventory barcodes at each stage of the supply chain delivers an accurate and reliable product flow, saving time and money. With Dynamics 365, Alltech can quickly input formulations into its batching systems and report more accurate data, enabling stronger quality control at a reduced cost. 

Shipping costs:
Alltech’s product journey can sometimes be global. What once was a laborious manual process — choosing the best freight options, manually verifying charges and adjusting invoices — is now automated. Integrating with trucking companies also allows for better visibility and potential freight-cost reductions. 

Dynamics 365 Supply Chain Management automatically selects the best freight option based on preset rules and then links the quoted price to the order, eliminating the need for manual verification. This speeds customer communication and reduces the likelihood of errors. Additionally, forecasting allows for more favorable contract negotiations with suppliers. Customers are happier and team members work smarter.

More efficient workforce

Reimagined IT:
Moving to the cloud with Dynamics 365 has enabled Alltech to take its innovation to new heights. With its team members no longer occupied with tedious maintenance tasks, thanks to continuous updates from Microsoft, Alltech has reimagined its Information Technology department, renaming it Intentional Technology. With all processes optimized, the IT department can now focus on value-added activities that drive the business. Moreover, the system’s intuitive user interface can help reduce turnover and enable faster onboarding.

Collaboration and best practices:
By moving all business units to Dynamics 365, Alltech has a new window into performance. This standardization enables comparisons and provides the ability to identify high-performance indicators. The best practices underneath those indicators can then be replicated to boost performance in other entities.

Customer satisfaction

Ultimately, the innovations and efficiencies Alltech has gained through Dynamics 365 benefit its customers. When financial reporting is unified, and when inventory data is accurate and quickly available, manufacturing operations can be streamlined. This enables Alltech to provide its customers with confidence in stock, shorter lead times and competitive pricing.

Next steps

Alltech is deepening and expanding its use of Dynamics 365 to deliver the right data to the right people at the right time, driving business forward and keeping Alltech at the forefront of agricultural and technological innovation. 

Alltech continues its aggressive Dynamics 365 rollout, with plans to migrate all ERP systems across 81 entities by the end of 2025. The first version of its customer portal, backed by Microsoft Azure with integration into Dynamics 365, will go live in 2024. Initially, the portal will give Alltech’s largest North American customers visibility into product training modules; it will then grow to deliver services, including easy order placement and access to reports such as the various testing services that Alltech offers with its technologies.

This beneficial partnership empowers Alltech’s critical mission of uniting the agri-food community in Working Together for a Planet of Plenty — a world where a collaborative and innovative agri-food community can provide proper nutrition for all, revitalize local economies and replenish the planet’s natural resources. Data and technology will be key elements to achieving this vision.  

With Alltech’s expertise in agriculture and Microsoft’s investment in artificial intelligence and other technologies, the two companies are perfectly positioned to help the agri-food industry embrace and implement needed technologies to achieve the world’s nutrition and sustainability goals.