Neural 2013 7 th March 2013. Alastair Currie Whisky Operations Strategy Manager.
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Transcript of Neural 2013 7 th March 2013. Alastair Currie Whisky Operations Strategy Manager.
Neural 20137th March 2013
Alastair CurrieWhisky Operations Strategy Manager
1. WHO ARE EDRINGTON?
2. UNDERSTANDING THE BUSINESS CHALLENGE
3. DEFINING OPERATIONAL REQUIREMENTS
4. BUILDING TM1 SOLUTIONS
5. LOOKING FORWARD
Agenda
Agenda
WHO ARE EDRINGTON?
Scotland’s LeadingInternational Premium
Spirits Company
Who Are Edrington?
Who Are Edrington? – Our Brands
Who Are Edrington? – Global Footprint
• Established 1860
• Brands sold in over 100 countries
• c. 10 million cases worldwide in 2012
• Turnover £687 million
• Headquarters – Glasgow
• Employs 790 people in Scotland; 1,180 people in Dominican Republic (Brugal); 300 in distribution (Taiwan, South Korea, China, SE Asia, Sweden, Norway, Finland, Denmark and USA)
Who Are Edrington? – Company Profile
• The largest independent grant-making trust in Scotland.
• Charitable trust founded in 1961 – over £110m donated since its inception
• Funded by dividend income from Edrington
• Supports wide variety of charitable causes – circa £16m last year
Who Are Edrington? – Our Ethos
• IntegrityWe have built a reputation for integrity in our business dealings, and we passionately believe that integrity delivers results.
• IndependenceWe are proud to be privately owned and to keep our home in Scotland. Our tradition of independent thinking informs our business decisions.
• InvolvementActively encourage staff to get involved and share in the success of the company; The Robertson Trust extends that involvement to communities in an unprecedented way.
• InnovationA world-class supply chain and distribution network;seeking new and better ways to work.
Agenda
UNDERSTANDING THE BUSINESS CHALLENGE
Understanding the Business Challenge
Edrington
The 1887 Company
Macallan Distillers
Highland Distillers
Wm Grant & Sons
Suntory Edrington Distillers
A complex company structure – and ownership of stock…….
….. 200 million litres of Whisky held across 4 entities
Brugal
Brugal & Co
Row & Company
Intermarché
Understanding the Business Challenge
200 Million litres of whisky50 individual Malts & Grains
64 different stock years
4 Malt Distilleries1 Grain Distillery
Blending & Bottling PlantStock at 80+ Warehouse sites
1 Million filled casksTwo Cooperage sites
Supply chain ex Spain & USA
Understanding the Business Challenge
ORKNEYHighland Park Distillery
SPEYSIDEMacallan DistilleryGlenrothes DistilleryGlenrothes CooperageParkmore Warehouses
PERTHSHIREGlenturret Distillery
WEST LOTHIANNorth British DistilleryMuirhall WarehousesClyde Cooperage
GLASGOWGreat Western Road(Blending & Bottling)
Buchley Warehouses
Non-Edrington Sites
Understanding the Business Challenge
200 Million litres of whisky50 individual Malts & Grains
64 different stock years
4 Malt Distilleries1 Grain Distillery
Blending & Bottling PlantStock at 80+ Warehouse sites
Over 100 Bottled productsAge range from 3-50 Years old
6 Million cases per annum
1 Million filled casksTwo Cooperage sites
Supply chain ex Spain & USA
WhiskyOperations
Planning
STRATEGIC PLANNING
OPERATIONAL PLANNING
Agenda
DEFINING OPERATIONAL REQUIREMENTS
Defining Operational Requirements – Business Benefits
EXISTING SYSTEMS: • Between 10 & 30 years old• Obsolete technology – mixed platforms• Difficult to support going forward• Not aligned with current IT strategy• Slow, manually intensive processes• No links between functional steps
• Easily integrated into IT strategy• Supportable, single platform• Powerful toolsets for data analysis• Process flows between modules• Speed of processing – scenario planning• Accurate prediction of costs
PROPOSED TM1 SOLUTION:
• Limited financial analysis
Defining Operational Requirements – A Modular Approach
STOCK ASSESSMENTStrategic Planning
BLEND ALLOCATIONSupply Planning
LOAD PLANOperational Movements
• FORECASTS• STOCK vs DEMAND• DISTILLATION PLAN• BLENDING PLAN• STOCK UTILISATION• WHISKY COSTS• SCENARIO PLANNING• CASKS• WAREHOUSING• FREIGHT
• TANKER PLAN• BLEND RECIPE• WHISKY QUALITY• CASK TYPE• STOCK AGE• STOCK LOCATION• MONTHLY PLAN• SCENARIO PLANNING
• STOCK LOCATION• OPTIMAL LOADS• MONTHLY PLAN• SCENARIO PLANNING
Defining Operational Requirements
STOCK ASSESSMENTStrategic Planning
• FORECASTS• STOCK vs DEMAND• DISTILLATION PLAN• BLENDING PLAN• STOCK UTILISATION• WHISKY COSTS• SCENARIO PLANNING• CASKS• WAREHOUSING• FREIGHT
• SAMPLING PLAN• CASK SELECTIONS• QUALITY PARAMETERS• WHISKY COSTS
STOCK ASSESSMENTMacallan Stock Management
Agenda
BUILDING TM1 SOLUTIONSStock Assessment
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENT
Sales Forecasts Stock Extract Product Recipes
Strategic Planning Module
Blend Planning Module
FinancePlanning
Blend RecipesYears 2-n
Balance Sheet Roll Forward
Surplus/Deficit
New Fillings
Product CostsBlend Plan
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENTStrategic Planning
• FORECASTS Data feed from SQL file Direct data or import Month-level demand split Version management
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENTStrategic Planning
• STOCK vs DEMAND Data feed from SQL file Demand from Forecast Stock from core ERP system Surplus or Deficit
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENTStrategic Planning
• DISTILLATION PLAN Forecasted volume by
product Requirements by month Malt & Grain Cost of Distillation
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENTStrategic Planning
• DISTILLATION PLAN Forecasted volume by
product Requirements by month Malt & Grain Cost of Distillation
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENTStrategic Planning
• DISTILLATION PLAN Forecasted volume by product Requirements by month Malt & Grain Cost of Distillation – annual uplift
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENTBlend Planning
• BLENDING PLAN Monthly demand Operational plan Input to Blend Allocation Input to Macallan Planning Supply continuity Stock level management
Building TM1 Solutions – Stock Assessment
Building TM1 Solutions – Stock Assessment
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENTBlend Planning
• STOCK UTILISATION Optimised use of ages/makes Blend Recipe creation 2-n Cask type management Alternative stock owners Annual transition controls Detailed product costing
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENTFinance Planning
• STOCK UTILISATION• WHISKY COSTS
Optimised use of ages/makes Cask type management Alternative stock owners Annual transition controls Detailed product costing
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENTFinance Planning
• BALANCE SHEET ROLL FORWARD Opening stock volume/value Additions to stock – new/mature Deductions from stock - blending By Group Company Inter group transfers Inter-company margin Annual cost uplift
Distillery Group Make Year Opening Opening Cost Uplift Opening Opening
LOA Value LOA Value LOA Value LOA Value Value LOA Value
NBRI-DG 2008 1,310,191 £1,839,766 125,000 £175,525 £71,111 1,185,191 £1,735,353
2009 662,622 £767,580 50,000 £44,446 208,000 £240,947 £24,277 404,622 £506,465
2010 1,115,119 £1,070,895 957,000 £919,047 £9,487 158,119 £161,336
2011 1,347,184 £1,197,542 £80,831 1,347,184 £1,278,373
2012 2,400,275 £1,964,221 £144,016 2,400,275 £2,108,238
2013 525,000 £451,500 525,000 £451,500
Grain
CV
2013/14
Blend Planning Module Version 1
2013/14
Additions to Stock Depletions from Stock Transfers to Blend
2014/15
Blend Planning Module Version
Blend Year
Owner
Distillery Group View
V1
Building TM1 Solutions – Stock Assessment
Distillery Group Make Year Opening Opening Cost Uplift Opening Opening
LOA Value LOA Value LOA Value LOA Value Value LOA Value
NBRI-DG 2008 1,310,191 £1,839,766 125,000 £175,525 £71,111 1,185,191 £1,735,353
2009 662,622 £767,580 50,000 £44,446 208,000 £240,947 £24,277 404,622 £506,465
2010 1,115,119 £1,070,895 957,000 £919,047 £9,487 158,119 £161,336
2011 1,347,184 £1,197,542 £80,831 1,347,184 £1,278,373
2012 2,400,275 £1,964,221 £144,016 2,400,275 £2,108,238
2013 525,000 £451,500 525,000 £451,500
Grain
CV
2013/14
Blend Planning Module Version 1
2013/14
Additions to Stock Depletions from Stock Transfers to Blend
2014/15
Blend Planning Module Version
Blend Year
Owner
Distillery Group View
V1
Agenda
BUILDING TM1 SOLUTIONSBlend Allocation
Building TM1 Solutions – Blend Allocation
Product Recipes and Annual Blend
Plan ex Stock Assessment
Product Orders from core ERP
Stock Extract from core ERP
Tanker Plan(Multi-blends)
Blend Planning
Casks allocated to open orders
Tanker Locations
Non Tanker Locations
Demand vs Stock
Live ERP system updated
Location Control
Cask Type Control
Building TM1 Solutions – Blend Allocation
BLEND PLANNINGTanker Plan
• OPTIMAL USE OF BULK TANKERS Famous Grouse & Cutty Sark only 4 Million cases p.a. (65% of total) Stock location Location type (tanker/non-tanker) Product recipe Cask type (sherry/non-sherry) Maximise number of tankers Monthly repeatability Labour/space utilisation
Building TM1 Solutions – Blend Allocation
BLEND PLANNINGTanker Plan
• OPTIMAL USE OF BULK TANKERS Famous Grouse & Cutty Sark only 4 Million cases p.a. (65% of total) Stock location Location type (tanker/non-tanker) Product recipe Cask type (sherry/non-sherry) Maximise number of tankers Monthly repeatability Labour/space utilisation
Building TM1 Solutions – Blend Allocation
BLEND PLANNINGBlend Allocation
• DEMAND vs AVAILABLE STOCK High level review Total stock available vs recipe Primary owner & alternatives Recognises month level demand Identifies any potential recipe
issues before automated processing of cask allocations
Building TM1 Solutions – Blend Allocation
BLEND PLANNINGBlend Allocation
• LOCATION CONTROL Preferred location order for
allocation of stock By recipe element & owner Automated mechanism ordered
by most or least stock at location Manual user-defined order
Building TM1 Solutions – Blend Allocation
BLEND PLANNINGBlend Allocation
• CASK TYPE CONTROL Stock Assessment recipe targets Sherry cask type – US/Spanish Oak Ex-Bourbon Other wood types
Building TM1 Solutions – Blend Allocation
BLEND PLANNINGBlend Allocation
• AUTOMATIC ALLOCATIONS Stock Assessment recipe targets Cask type targets Order ID – by product Stock storage location & type Age of youngest spirit (AYS) Required delivery date Final allocations and check
Building TM1 Solutions – Blend Allocation
BLEND PLANNINGBlend Allocation
• AUTOMATIC ALLOCATIONS Stock Assessment recipe targets Cask type targets Order ID – by product Stock storage location & type Age of youngest spirit (AYS) Required delivery date Final allocations and check
Building TM1 Solutions – Blend Allocation
BLEND PLANNINGBlend Allocation
• AUTOMATIC ALLOCATIONS Stock Assessment recipe targets Cask type targets Order ID – by product Stock storage location & type Age of youngest spirit (AYS) Required delivery date Final allocations and check
Building TM1 Solutions – Blend Allocation
Building TM1 Solutions – Blend Allocation
BLEND PLANNINGBlend Allocation
• AUTOMATIC ALLOCATIONS Stock Assessment recipe target Cask type targets Order ID – by product Stock storage location & type Age of youngest spirit (AYS) Required delivery date Final allocations and check
Building TM1 Solutions – Blend Allocation
Building TM1 Solutions – Blend Allocation
BLEND PLANNINGBlend Allocation
• AUTOMATIC ALLOCATIONS Stock Assessment recipe target Cask type targets Order ID – by product Stock storage location & type Age of youngest spirit (AYS) Required delivery date Final allocations and check
Building TM1 Solutions – Blend Allocation
BLEND PLANNINGBlend Allocation
• AUTOMATIC ALLOCATIONS Stock Assessment recipe target Cask type targets Order ID – by product Stock storage location & type Age of youngest spirit (AYS) Required delivery date Final allocations and check
Building TM1 Solutions – Blend Allocation
Building TM1 Solutions – Blend Allocation
BLEND PLANNINGBlend Allocation
• MANUAL ALLOCATIONS Entire cask details file Override automated selections Add casks to improve target % Used principally for allocation
of small-volume high-value products with specific cask selections (eg Highland Park 18)
Building TM1 Solutions – Blend Allocation
Agenda
BUILDING TM1 SOLUTIONSLoad Plan
Building TM1 Solutions – Load Plan
Casks allocated to production orders ex Blend Allocation
Removal documentation generated by
core ERP system
Data Views
Load Plan
Casks allocated to Optimised Loads
Live ERP system updatedLoad Plan Controls
Load Plan Diary
Building TM1 Solutions – Load Plan
LOAD PLANData Views
• DATA VIEWS Ex Blend Allocation data Total casks from/to locations Marshalling loads (satellite
warehouses to hub) Casks at target destination Casks by production order
Building TM1 Solutions – Load Plan
LOAD PLANData Views
• DATA VIEWS Ex Blend Allocation data Total casks from/to locations Marshalling loads (satellite
warehouses to hub) Casks at target destination Casks by production order
Building TM1 Solutions – Load Plan
LOAD PLANData Views
• DATA VIEWS Ex Blend Allocation data Total casks from/to locations Marshalling loads (satellite
warehouses to hub) Casks at target destination Casks by production order
Building TM1 Solutions – Load Plan
LOAD PLANLoad Plan Controls
• LOAD PLAN CONTROLS Locations Transit times Load sizes Number of pickups Processing order
Building TM1 Solutions – Load Plan
LOAD PLANLoad Plan Controls
• LOAD PLAN CONTROLS Locations Transit times Load sizes Number of pickups Processing order
Building TM1 Solutions – Load Plan
LOAD PLANLoad Plan Controls
• LOAD PLAN CONTROLS Locations Transit times Load sizes Number of pickups Processing order
Building TM1 Solutions – Load Plan
LOAD PLAN
• LOAD PLAN PROCESSING Tanker & Cask Loads by
product/order Marshalling Loads By date By region From/To details Number of casks/type Load Plan Diary
Building TM1 Solutions – Load Plan
LOAD PLAN
• LOAD PLAN PROCESSING Tanker & Cask Loads Marshalling Loads By date By region From/To details Number of casks/type Load Plan Diary
Building TM1 Solutions – Load Plan
Building TM1 Solutions – Load Plan
LOAD PLAN
• LOAD PLAN PROCESSING Tanker & Cask Loads Marshalling Loads By date By region From/To details Number of casks/type Load Plan Diary
Building TM1 Solutions – Load Plan
Building TM1 Solutions – Load Plan
LOAD PLAN
• LOAD PLAN PROCESSING Tanker & Cask Loads Marshalling Loads By date By region From/To details Number of casks/type Load Plan Diary
Building TM1 Solutions – Delivering Business Benefits
STOCK ASSESSMENTStrategic Planning
BLEND ALLOCATIONSupply Planning
LOAD PLANOperational Movements
• INTEGRATED SOLUTIONS – ONE PLATFORM• FASTER, SMARTER DATA PROCESSING & ANALYSIS• REDUCED MANUAL INPUT & SPREADSHEET MANIPULATION• PRODUCTIVITY - LESS TIME SPENT BATTERING KEYBOARDS• IMPROVED ACCURACY & CONSISTENCY OF RESULTS• OPPORTUNITIES FOR SCENARIO PLANNING• POTENTIAL TO EXPAND INTO OTHER AREAS OF OUR BUSINESS
But apart from all that, what have ever done for us????
Building TM1 Solutions – Commercial Budget Planning
COMMERCIAL PLANNINGGroup Data Consolidation
COMMERCIAL BUDGETING PROCESS;
• 5 Year Forecast• Customer/Product & Brand based• 80+ active customers• 400+ customer/product combinations• Data uploaded into SAP
THE PROBLEM;
• Managed via multiple complex spreadsheets• Unreliable and time consuming• Accuracy compromised• Inconsistent communication to business• Expanding Commercial team• Geographical remoteness
Building TM1 Solutions – Commercial Budget Planning
COMMERCIAL PLANNINGGroup Data Consolidation
• WEB BASED DATA INPUT Access from anywhere with
reasonable broadband speed Volumes, Pricing and A&P
spend entered by customer Product data Summary
Building TM1 Solutions – Commercial Budget Planning
COMMERCIAL PLANNINGGroup Data Consolidation
• IMPROVED DATA VISIBILITY 5-Year summary generated Comparison to previous budget
and forecast data sets Rapid generation of summaries Improved data analysis rather
than data integrity checking
Building TM1 Solutions – Commercial Budget Planning
COMMERCIAL PLANNINGGroup Data Consolidation BUSINESS BENEFITS
• DATA INTEGRITY• REAL-TIME DATA CAPTURE & REPORTING• OPPORTUNITY FOR PROACTIVE ERROR-TRAPPING• MORE ACCURATE FINAL BUDGET• ADDING VALUE NOT JUST CHECKING DATA INPUTS
Agenda
LOOKING FORWARDTM1 and Edrington
Looking Forward – TM1 and Edrington
STOCK ASSESSMENTStrategic Planning
BLEND ALLOCATIONSupply Planning
LOAD PLANOperational Movements
STOCK ASSESSMENTCask, Warehouse & Freight Planning
STOCK ASSESSMENTMacallan Stock Management
COMMERCIAL PLANNINGGroup Data Consolidation
Forecast Data
BRUGAL RUM ??Stock Assessment & Supply Planning
Questions?
Neural 20137th March 2013