We often attribute technological know-how to young people because they are “digital born”. As a result, the rest of us are bound to be slower to take advantage of new technologies.
The opposite is true for one of the world’s largest food manufacturers, Grupo Bimbo. While not necessarily a household name, the brands they’ve acquired over the years – Sara Lee, Thomas’, Entenmann’s, Oroweat, among others – are a who’s who of classic American favourites. Then there are hundreds of house brands featuring Osito, the iconic white bimbo bear loved by Latin American consumers in the US, Europe and Latin America.
Due to the company’s almost exclusive focus on baked goods, including pastries, donuts, breads, rolls, muffins, bagels, cupcakes, crackers, tortillas, candies and cookies, Grupo Bimbo is the largest industrial baker in the industry with 203 plants in 32 countries.
Founded in Mexico City in December 1945 as a humble family-run bakery, Bimbo has grown into a behemoth with annual sales of $13 billion and production of over 13,000 delicious offerings. Equally impressive for Bimbo shareholders (the company trades on the Mexican Stock Exchange under the ticker symbol BIMBO and over the counter on the US OTCM: BMBOY) is the fact that the global bakery market is huge and looks set to have a strong year. annual growth. In 2020, the industry recorded revenue of US$453.74 billion and they are expected to reach 7% CAPGAR and US$672.66 billion by 2026.
In addition to the massive infrastructure needed to manufacture millions of packaged goods, Grupo Bimbo operates over 50,000 vehicles, one of the world’s largest commercial fleets, to reach its 3.2 million points of sale. Baking is a labor-intensive endeavor, and maintaining high quality standards at the scale of Bimbo’s size requires leveraging technology from a vast array of data points, from ovens and mixers to packaging machines and conveyors.
Enter Raúl Obregón, Bimbo’s Chief Information and Transformation Officer, the mastermind behind one of the food industry’s most transformative data management and logistics initiatives.
“We’re a 75-year-old company baking around the world in the 21st century,” says Obregón of Grupo Bimbo’s modernist headquarters in Mexico City. “Digital transformation is key to our continued success and to accelerating growth.”
As is usual with corporate high achievers, Obregón climbed the ladder from the bottom up, joining Grupo Bimbo in Route Sales in 1998 and working his way up to Regional Sales Manager at Bimbo Bakeries USA (BBU). His big break came when he was handpicked to serve as president of Bimbo Latin South. Throughout his career, he has noticed that decision makers often lack the actionable data and business intelligence to eliminate inefficiencies and increase productivity.
Motivated to maximize his impact on the company where he grew up as a child at Pandeiros in Mexico City, Obregón chose to take on the company’s senior IT leadership role. As he tells the story, he proudly mentions that last year was the 10th anniversary of Bimbo’s factory and fleet automation initiative. But the innovation goes much deeper, he points out.
To revolutionize the company’s existing IT systems, Obregón developed a strategy to combine the company’s existing IT systems with a real-time Internet of Things (loT) infrastructure, artificial intelligence (AI) and robotics. Over time, this foundation of cutting-edge technologies has become Bimbo’s central strategic operational plan.
“It all starts with data and analytics,” he adds. “And to provide the right data and leverage our global reach, we are moving forward with the implementation of our standard solutions, or Future Systems Landscape (FSL) as we call them internally.”
According to Obregón, FSL acts as a company-wide technology incubator and drives much of the company’s digital transformation.
“We have a dedicated group of more than 75 people located in Mexico, the US and Spain. They are spread across different areas of our business and are tasked with constantly looking for ways to accelerate growth and productivity through innovation,” he said .
The strength of FSL is that it connects everyone and everything, he says. “Touchpoints from consumers, customers and our own employees, as well as all the different devices, are collected through our Internet of Things (IoT) initiative, which we call GB Connected.”
More recently, the availability of real-time data across the company’s global operations has proven to be a key asset in dealing with supply chain issues and managing the impact of inflation.
“We have built flexibility in our supply chains, including inventory, portfolio, processes and strong relationships with our suppliers,” Obregón comments on how ingredient shortages have been alleviated to avoid production line slowdowns. “Of course there is a limit to these levels of flexibility, but they certainly help buy valuable time to find alternatives.”
Regarding inflation, he notes that “what if” analysis using timely data has been a key driver of cost reduction in price volatility.
“We constantly use information to analyze price effects in our value chains and even in some of our revenue growth management work,” he says. “Many of the countries that we operate in have had historical inflation rates that were much higher than those observed in the US today and by operating in these conditions we have learned to compare alternative suppliers and inventories to assess these types of scenarios to cope better. ”
Obregón also credits the technology with Grupo Bimbo’s well-deserved reputation as a global leader in green and sustainable business practices. Over the years, the company has pioneered workplace automation, carbon reduction and waste management by investing heavily in technology throughout its supply chain. Many of Bimbo’s ambitious CO2 reduction targets are met annually, he says, in large part through the introduction of state-of-the-art on-line mixing and baking equipment to reduce water and energy use in the production facilities.
He adds that one of the biggest opportunities the company has identified for reducing future carbon emissions lies in the company’s massive transportation infrastructure.
“Owning the largest commercial fleet in the industry, we recognized many years ago what creating greater efficiencies could mean to reduce our carbon footprint and do our part to improve air quality.”
From a standing start just ten years ago, Obregón says his team has developed several automated and AI-enabled vehicles designed for highly specific applications. All are powered by rechargeable ion batteries and controlled by programmable logic controllers (PLCs), allowing them to operate completely without human supervision. He adds that they recently rolled out the fifth generation of inventory control and dock loading robots. Fully autonomous, roadworthy delivery vans are now on the horizon, he proudly says.
“Until now, our AGVs have only been for internal operations,” he says. “However, as autonomous commercial vehicles continue to evolve and become safe and profitable, Grupo Bimbo plans to integrate them into our global distribution systems. We envision this being done in a tiered approach to ensure maximum efficiency and the highest public benefit.”
Beyond the value that the company’s foray into robotics brings to operations, Obregón adds the potential benefit that can come from making the technology available to other food manufacturers. In 2021 alone, the Automated Guided Vehicles market generated revenue of US$4.02 billion and is projected to register an annual growth rate of around 9%, potentially reaching around US$9 billion by 2030.
Just last year, Grupo Bimbo sold its stake in Kanan Smart Solution, a manufacturer of food quality control systems, to Mekitec Group. For several years, the global bakery has relied on Mekitec’s x-ray inspection systems, supported by Kanan’s software solutions, to achieve the industry’s highest level of quality control. Backed by Bimbo Ventures, Grupo Bimbo’s venture arm, the agreement will allow Mekitec to focus more on baking solutions to help bakeware manufacturers reduce waste through better end-to-end traceability.
While Grupo Bimbo’s AGV may be the company’s crown jewel when it comes to innovation from skunkworks, the company’s owners and board of directors alike are proud of the embrace of digital transformation across their sprawling organization.
“We are committed to positioning ourselves as a leader in cutting-edge data and analytics, all of which underpin Grupo Bimbo’s four tenets of Investment, Capital Spending, Innovation, Brands and Point of Sale. ” he added.