Alastair Currie Edrington V2

Report
Neural 2013
7th March 2013
Alastair Currie
Whisky Operations Strategy Manager
Agenda
1. WHO ARE EDRINGTON?
2. UNDERSTANDING THE BUSINESS CHALLENGE
3. DEFINING OPERATIONAL REQUIREMENTS
4. BUILDING TM1 SOLUTIONS
5. LOOKING FORWARD
Agenda
WHO ARE EDRINGTON?
Who Are Edrington?
Scotland’s Leading
International Premium
Spirits Company
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
• Integrity
We have built a reputation for integrity in our business
dealings, and we passionately believe that integrity
delivers results.
• Independence
We are proud to be privately owned and to keep our
home in Scotland. Our tradition of independent
thinking informs our business decisions.
• Involvement
Actively 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.
• Innovation
A world-class supply chain and distribution network;
seeking new and better ways to work.
Agenda
UNDERSTANDING THE BUSINESS CHALLENGE
Understanding the Business Challenge
A complex company structure – and ownership of stock…….
Wm Grant &
Sons
Edrington
Brugal & Co
The 1887
Company
Highland
Distillers
Suntory
Macallan
Distillers
Brugal
Edrington
Distillers
Intermarché
Row &
Company
….. 200 million litres of Whisky held across 4 entities
Understanding the Business Challenge
200 Million litres of whisky
50 individual Malts & Grains
64 different stock years
4 Malt Distilleries
1 Grain Distillery
Blending & Bottling Plant
Stock at 80+ Warehouse sites
1 Million filled casks
Two Cooperage sites
Supply chain ex Spain & USA
Understanding the Business Challenge
ORKNEY
Highland Park Distillery
Non-Edrington Sites
SPEYSIDE
Macallan Distillery
Glenrothes Distillery
Glenrothes Cooperage
Parkmore Warehouses
GLASGOW
Great Western Road
(Blending & Bottling)
Buchley Warehouses
PERTHSHIRE
Glenturret Distillery
WEST LOTHIAN
North British Distillery
Muirhall Warehouses
Clyde Cooperage
Understanding the Business Challenge
STRATEGIC PLANNING
200 Million litres of whisky
50 individual Malts & Grains
64 different stock years
Over 100 Bottled products
Age range from 3-50 Years old
6 Million cases per annum
Whisky
Operations
Planning
4 Malt Distilleries
1 Grain Distillery
Blending & Bottling Plant
Stock at 80+ Warehouse sites
1 Million filled casks
Two Cooperage sites
Supply chain ex Spain & USA
OPERATIONAL PLANNING
Agenda
DEFINING OPERATIONAL REQUIREMENTS
Defining Operational Requirements – Business Benefits
EXISTING SYSTEMS:
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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
Limited financial analysis
PROPOSED TM1 SOLUTION:
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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
Defining Operational Requirements – A Modular Approach
STOCK ASSESSMENT
Strategic Planning
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FORECASTS
STOCK vs DEMAND
DISTILLATION PLAN
BLENDING PLAN
STOCK UTILISATION
WHISKY COSTS
SCENARIO PLANNING
CASKS
WAREHOUSING
FREIGHT
BLEND ALLOCATION
Supply Planning
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TANKER PLAN
BLEND RECIPE
WHISKY QUALITY
CASK TYPE
STOCK AGE
STOCK LOCATION
MONTHLY PLAN
SCENARIO PLANNING
LOAD PLAN
Operational Movements
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STOCK LOCATION
OPTIMAL LOADS
MONTHLY PLAN
SCENARIO PLANNING
Defining Operational Requirements
STOCK ASSESSMENT
Strategic Planning
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FORECASTS
STOCK vs DEMAND
DISTILLATION PLAN
BLENDING PLAN
STOCK UTILISATION
WHISKY COSTS
SCENARIO PLANNING
CASKS
WAREHOUSING
FREIGHT
STOCK ASSESSMENT
Macallan Stock Management
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SAMPLING PLAN
CASK SELECTIONS
QUALITY PARAMETERS
WHISKY COSTS
Agenda
BUILDING TM1 SOLUTIONS
Stock Assessment
Building TM1 Solutions – Stock Assessment
Sales Forecasts
Stock Extract
Product Recipes
STOCK ASSESSMENT
Strategic
Planning Module
Surplus/
Deficit
New
Fillings
Blend
Planning Module
Blend Plan
Blend Recipes
Years 2-n
Finance
Planning
Product
Costs
Balance Sheet
Roll Forward
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENT
Strategic Planning
• FORECASTS
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Data feed from SQL file
Direct data or import
Month-level demand split
Version management
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENT
Strategic Planning
• STOCK vs DEMAND
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Data feed from SQL file
Demand from Forecast
Stock from core ERP system
Surplus or Deficit
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENT
Strategic Planning
• DISTILLATION PLAN
 Forecasted volume by
product
 Requirements by month
 Malt & Grain
 Cost of Distillation
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENT
Strategic Planning
• DISTILLATION PLAN
 Forecasted volume by
product
 Requirements by month
 Malt & Grain
 Cost of Distillation
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENT
Strategic Planning
• DISTILLATION PLAN
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Forecasted volume by product
Requirements by month
Malt & Grain
Cost of Distillation – annual uplift
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENT
Blend Planning
• BLENDING PLAN
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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 ASSESSMENT
Blend Planning
• STOCK UTILISATION
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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 ASSESSMENT
Finance Planning
• STOCK UTILISATION
• WHISKY COSTS
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Optimised use of ages/makes
Cask type management
Alternative stock owners
Annual transition controls
Detailed product costing
Building TM1 Solutions – Stock Assessment
STOCK ASSESSMENT
Finance Planning
Blend Planning Module Version
V1
Blend Planning Module Version 1
Blend Year
2013/14
Owner
CV
Distillery Group View
Grain
2013/14
Distillery Group
NBRI-DG
• BALANCE SHEET ROLL FORWARD
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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
Make Year
2008
Opening
Opening
LOA
Value
1,310,191
LOA
Value
2014/15
Depletions from Stock
LOA
Value
£1,839,766
2009
662,622
£767,580
2010
1,115,119
£1,070,895
2011
1,347,184
£1,197,542
2012
2,400,275
£1,964,221
2013
Additions to Stock
50,000
525,000
£451,500
£44,446
Transfers to Blend
Cost Uplift
Opening
Value
LOA
Opening
LOA
Value
125,000
£175,525
£71,111
1,185,191
£1,735,353
Value
208,000
£240,947
£24,277
404,622
£506,465
957,000
£919,047
£9,487
158,119
£161,336
£80,831
1,347,184
£1,278,373
£144,016
2,400,275
£2,108,238
525,000
£451,500
Building TM1 Solutions – Stock Assessment
Blend Planning Module Version
V1
Blend Year
2013/14
Owner
CV
Distillery Group View
Grain
Blend Planning Module Version 1
2013/14
Distillery Group
NBRI-DG
Make Year
Opening
Opening
LOA
Value
Additions to Stock
LOA
Value
2014/15
Depletions from Stock
LOA
Value
Transfers to Blend
Cost Uplift
Opening
Opening
Value
LOA
Value
LOA
Value
125,000
£175,525
£71,111
1,185,191
£1,735,353
208,000
£240,947
£24,277
404,622
£506,465
957,000
£919,047
£9,487
158,119
£161,336
2008
1,310,191
£1,839,766
2009
662,622
£767,580
2010
1,115,119
£1,070,895
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
525,000
£451,500
2013
50,000
525,000
£451,500
£44,446
Agenda
BUILDING TM1 SOLUTIONS
Blend Allocation
Building TM1 Solutions – Blend Allocation
Product Recipes
and Annual Blend
Plan ex Stock
Assessment
Stock Extract
from core ERP
Product Orders
from core ERP
Blend Planning
Live ERP system updated
Tanker Plan
(Multi-blends)
Tanker
Locations
Non Tanker
Locations
Location
Control
Cask Type
Control
Casks allocated to
open orders
Demand
vs Stock
Building TM1 Solutions – Blend Allocation
BLEND PLANNING
Tanker Plan
• OPTIMAL USE OF BULK TANKERS
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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 PLANNING
Tanker Plan
• OPTIMAL USE OF BULK TANKERS
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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 PLANNING
Blend Allocation
• DEMAND vs AVAILABLE STOCK
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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 PLANNING
Blend 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 PLANNING
Blend Allocation
• CASK TYPE CONTROL
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Stock Assessment recipe targets
Sherry cask type – US/Spanish Oak
Ex-Bourbon
Other wood types
Building TM1 Solutions – Blend Allocation
BLEND PLANNING
Blend Allocation
• AUTOMATIC ALLOCATIONS
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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 PLANNING
Blend Allocation
• AUTOMATIC ALLOCATIONS
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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 PLANNING
Blend Allocation
• AUTOMATIC ALLOCATIONS
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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 PLANNING
Blend Allocation
• AUTOMATIC ALLOCATIONS
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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 PLANNING
Blend Allocation
• AUTOMATIC ALLOCATIONS
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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 PLANNING
Blend Allocation
• AUTOMATIC ALLOCATIONS
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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 PLANNING
Blend Allocation
• MANUAL ALLOCATIONS
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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 SOLUTIONS
Load Plan
Building TM1 Solutions – Load Plan
Casks allocated to
production orders
ex Blend Allocation
Removal
documentation
generated by
core ERP system
Load Plan
Data
Views
Load Plan
Controls
Casks allocated to
Optimised Loads
Live ERP system updated
Load Plan
Diary
Building TM1 Solutions – Load Plan
LOAD PLAN
Data 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 PLAN
Data 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 PLAN
Data 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 PLAN
Load Plan Controls
• LOAD PLAN CONTROLS
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Locations
Transit times
Load sizes
Number of pickups
Processing order
Building TM1 Solutions – Load Plan
LOAD PLAN
Load Plan Controls
• LOAD PLAN CONTROLS
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Locations
Transit times
Load sizes
Number of pickups
Processing order
Building TM1 Solutions – Load Plan
LOAD PLAN
Load Plan Controls
• LOAD PLAN CONTROLS
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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
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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
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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
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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 ASSESSMENT
Strategic Planning
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BLEND ALLOCATION
Supply Planning
LOAD PLAN
Operational 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 PLANNING
Group Data Consolidation
COMMERCIAL BUDGETING PROCESS;
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5 Year Forecast
Customer/Product & Brand based
80+ active customers
400+ customer/product combinations
Data uploaded into SAP
THE PROBLEM;
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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 PLANNING
Group 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 PLANNING
Group 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 PLANNING
Group Data Consolidation
BUSINESS BENEFITS
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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 FORWARD
TM1 and Edrington
Looking Forward – TM1 and Edrington
Forecast Data
COMMERCIAL PLANNING
Group Data Consolidation
STOCK ASSESSMENT
Strategic Planning
BLEND ALLOCATION
Supply Planning
LOAD PLAN
Operational Movements
STOCK ASSESSMENT
STOCK ASSESSMENT
BRUGAL RUM ??
Macallan Stock Management
Cask, Warehouse & Freight Planning
Stock Assessment & Supply Planning
Questions?
Neural 2013
7th March 2013

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