“Quality is non-negotiable”

Müller is curious. As the spokesperson for the management board, he wants to know about the quality of his company’s and his competitors’ retail products. What items are new on the shelves? Is his company’s packaging the most recyclable? Can the presentation be improved? Germany’s largest dairy cooperative embraces quality — in all areas of the company from production, processing, storage, and transport to how the products are displayed in the refrigerated cases of retail shops. As he puts it, “What’s on the shelves is what counts. Quality is non-negotiable.”

Müller’s colleague Dr. Marcus Krapp is responsible for overall quality at DMK. Global Head of Quality is his official title. Müller asked him to meet us at the supermarket too. “Our customers’ satisfaction is our highest priority,” says Dr. Krapp. “We always want to meet their expectations for our products.” DMK has therefore drawn up a quality strategy as part of its Vision 2030. In doing so, the cooperative solicited advice and guidance from a specialized team at Porsche Consulting.

Farmers feed the population. Statistics show that a single farmer in Germany provides food for an average of 139 people. That figure has tripled since 1960. One food product that has always played a key role is milk. However, consumer behavior and purchasing patterns have changed over the past decades. The spotlight now is on convenience. Customers seek ease and simplicity in their lives, ready-to-use items in small amounts and packages. “But that conflicts with the idea of sustainability,” observes Müller. “And sustainability is playing a big role right now in discussions about food. A lot more will be happening with packaging in the future.”

Is food too cheap?

It seems bizarre to accuse the entire farming sector of being harmful to the climate. “For one thing, farmers are aware of their responsibility for the environment,” says Müller. “Moreover, they are the ones who produce the ‘means of life’ (the literal meaning of the German word for ‘food’).” A second source of tension is the split between struggling to keep food prices down while desiring high levels of food quality. By way of background: in the 1950s and 1960s, residents of the Federal Republic of Germany had to spend about 50 percent of their income on food, whereas today that figure is only around 10 percent. “And quality has risen at the same time. We’ve never had such high-grade and healthy food products in our shops as we do today,” says Müller. “These improvements have to be paid for. Quality has its price. That applies to organic products as well. If it’s no longer profitable to produce them, or if most of the population isn’t willing to pay extra for them, then farmers won’t be investing in them anymore.”

As the head of a cooperative food-producing enterprise, Müller also finds himself navigating the cross-currents of conventional dairy products versus vegan alternatives. Consumer eating habits have changed. The percentage of people who are flexitarian, prioritize plant products, or are entirely vegan will continue to rise by 2030. “As food producers we can’t say that’s a bad idea and we won’t go along with it,” says Müller. Quite the opposite, in fact: the dairy has the necessary expertise for alternative products as well. In the long term, the aim is for farmers to be able to participate in innovations as raw material suppliers. But it is also clear,” Müller remarks, “that we are a dairy and will remain so.”

As CEO of the DMK Group, Müller therefore needs to balance different interests. He seeks to address the many and often conflicting demands on his position by “communicating eye to eye.” As he explains, “Interacting with people as people, whether they’re cleaning personnel or company directors — that’s what’s important to me. And I want feedback. I want to hear if something isn’t working or if someone finds something disturbing.” This open ear for criticism is a quality Müller also expects from his management personnel. “We’ve modified our structures to promote this. When a quality assurance engineer speaks up, for example, we’re now paying the closest attention.” Müller is convinced that this type of corporate culture “enhances the quality of our products.” And that is the focus of the DMK Group’s vision for the future. “As food producers we bear a great responsibility. You can’t live up to that by following standard operating procedures alone. Instead, every employee has to like their work and be in a position to do their very best to improve quality. And you’ll only achieve that if quality is the top priority throughout the entire company, if you deal with people on an equal footing, and take them on board.” One example is DMK’s quality strategy. “It strengthens an entrepreneurial approach that promotes a preventive management system for assessing risks,” says Dr. Krapp. He has linked the strategy with a comprehensive continuous improvement project that closely observes production processes and uses an array of sensors on machinery to gather even more relevant information in real time about the milk, cheese, and curd.

It starts on the farms

As members of the cooperative, the farmers also place a premium on quality. As Krapp notes, “Our agricultural department maintains close contact with our farmers. We offer workshops, further training, and information. In the rare cases when quality problems arise, we go straight to the producer to discuss the causes and corrective measures.” He is quick to emphasize that since 2021, DMK has benefited especially from Porsche Consulting’s experience and expertise in process and cost optimization and in the further development of quality management systems. “We have profited from Porsche Consulting’s 25 years of experience in the food sector. It gives us a benchmarking framework that helps us improve all the more.” The experts at Porsche Consulting enjoy “absolute recognition and respect” among DMK’s employees. One reason for this, according to Krapp, “is that they don’t just provide ideas in theory, but are also and especially involved in guiding the steps to put them into practice.”

With a view to the future, Müller has the following to say: “We want to keep providing outstanding products over both the short and long term, while also keeping an eye on production costs. To do that, we have to keep thinking about what else we can optimize, what we can do more efficiently, and what laboratory analyses we can run to get results that help us improve even more.” Müller makes sure that success in different areas is measured. “Customer satisfaction has risen and our quality costs have declined,” he notes. When the interview is over and we’re about to depart, he turns one last time and says, “Milk is my passion — and has been so my entire life.”