Making a pasty substance (gibul) is a form of lash (kneading), and is prohibited on Shabbat. The Shulhan Arukh (324:3) describes a case in which a person wishes to add water to bran, to feed to his animals. He first cites the view of the Rambam, who maintains that since bran is not a substance which becomes pasty right away, it is permitted to add water to it, but the mixture must be stirred with a "shinuy" (change). Therefore, he writes that after adding the water it should not be stirred in the normal manner, but rather in a "different" manner, i.e., horizontally and then vertically.
However, Maran then cites another view, held by the Raavad and other Rishonim (Sefer Teruma, Tosafot, Semak, etc.) who held that just by adding water to the grain one violates lash, and therefore the water must be added before Shabbat, and even stirring with a shinuy would not be permitted.
According to R. Ovadia Yosef’s rules of understand the Shulhan Arukh, when Maran brings an opinion (stam), and then another attributed opinion (yesh omrim), the halacha is in accordance with the first view, even it is more lenient (The Kaf HaHaim argues, and rules that one should be strict.)
Would this apply to a person eating cereal? Is it permissible to add milk to the cornflakes, which over time, will become mushy and pasty? This should be subject to the debate cited above, and according to R. Ovadia Yosef, it would be permitted, as it is certainly no worse than the bran prepared for the animals. However, R. Shelomo Miller (Shabbat Shelomo pg. 244) writes that one should be strict, in deference to the other opinion, and even the pouring of the liquid into the cereal should be done with a shinuy. Therefore, it would be proper to pour in the milk before the cornflakes, as in this case, all would agree that it is permitted. The Aruch HaShulhan (324:7) also writes that one should be concerned about the second, more stringent view.
This is only in a case in which one will leave the cornflakes for a long time, and they will become soggy, and then pasty. If he plans to eat them quickly, there is no halachic problem, and he may add milk in a normal manner.
Summary: If one intends to add milk to cereal, and then to let the cereal sit for a bit of time until it becomes soggy, it is preferable first to add the milk, and then the cereal, in deference to the stricter opinion regarding adding liquids to bran on Shabbat.
