Transcript Document 7783453

Brown-Forman
Corporation
The Impact of SAP on
Global Operations
Amanda Landrum
Brian Danos
Matt Wollner
Celyn Maggioni
Molly Jaworski
Outline
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Brown-Forman Overview
Whiskey Making Process Overview
Supply Chain Overview
Impact of SAP
– Company
– Forecasting
– Purchasing
In our project we, will be focusing specifically
on the division - Brown-Forman Beverages
World Wide & the impact SAP has had on it.
Through Brown-Forman Beverages
Worldwide, Brown-Forman produces and
markets many of the most well-known and
best-loved wines and spirits in the world.
They include Jack Daniel’s, Canadian Mist,
Southern Comfort, Early Times, Korbel
champagnes, Fetzer wines, and Bolla wines.
BFBW is Brown-Forman’s largest division.
Brown-Forman Worldwide Production
Facilities
Collingwood, Ont, Canada
Greenfield, CA
Guerneville, CA
Hopland, CA
Windsor, CA
Dublin, IRL
Louisville,KY
Versailles,KY
Lynchburg,TN
Frederiksted, St.
Croix, U.S.
Virgin Islands
Chagny, France
Livorno, Italy
Verona, Italy
St. Leonards, Australia
Whiskey is
• Made from Grain
• Distilled less than 190 proof (95% by
volume)
• Usually aged in oak barrels
• Usually aged for at least 3 years
The Process of Whiskey Making
•Milling
•Mashing
•Cooking
•Fermentation
•Distillations
•Aging
•Bottling
Supply Chain Physical Profile: Spirits
Supply Chain Physical Profile
Spirits
Cooperage
Stave
Mills
Distilleries Barrel Warehouses
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3 mills two
owned in
Kentucky,
one in
Ohio)
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BGC is located in
Louisville, KY with
a daily capacity of
2000 bl
approximately 95%
of production @
BGC is used
internally
Bottling Plants BF Warehouses Distributors
Other Vendors
(e.g. caps, labels,
flavorings, glass, boxes)
Other Vendors
(e.g. utilities, grain
corn)
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4 Distilleries (Jack Daniel’s,
Early Times,
Canadian Mist,
L&G)
2 Processing
facilities
(Clintock, Mt.
Eagle)
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83 storage facilities
(JD-68, CM-8, ET-7)
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1.964M sq/ft of
storage space
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Model Dist
Inventory
Agency
Partners
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4 Bottling Plants
and one bottling
line owned at
Clintock
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LPO volume was
6.1 9L cs in F’ 99
(not including
Pinnacle)
Cost of warehousing
JD-$3.91, CM-$8.68,
ET-$5.92 (bl/yr)
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JD volume was 6.1
9L cs in F’99
Retailers
Consumers
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7 facilities
(JD, LPO,
Pinnacle, 3
export, 2
import, 19
Bailment)
Inventory
days in F’99
9L cs: JD 18, LPO - 25
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Approx. 800
ship-to points
worldwide
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In the U.S. 32 open
states, 18
control states
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On & off
premise
retailers
So, how does Brown-Forman
forecast demand plan production?
•Two Separate systems used
–Demand planning for liquid
–Supply chain planning for
bottling and distribution
Demand planning for liquids
•Proprietary systems develop by BrownForman
•Used to plan barrel and whiskey
production
•Used to manage long-term grape
contracts and vineyard plantings
•Production schedules updated semiannual
Supply chain planning
•Implemented SAP ERP system - May 1999
•Y2K solutions for 17 legacy systems
•Update to 4.6 release - July 2001
•Strategic decision standardize on SAP
software solutions - December 2000
•Currently implementing APO module of
SAP for supply chain planning
SAP’s Impact on Brown-Forman
• Knowledge to make decisions
• Quick Access to information
• Inventory levels
• Financial impact
• Facilitate communication throughout
Brown-Forman
SAP’s Impact - Purchasing
EXAMPLE – Glass Procurement Process
• Complex
Supplier Network
• Lack of Consistency
• Purchased in small amounts from
multiple vendors
Glass Supply Relationships
Millions
BSN
(000,000)
M. Picard
6 bottling
location
AVIR
VOA
40.0 Bottles
16.6 Bottles
Bolla
ST Gobain
1.0 Bottles
Tuaca
Rexam
43.8 Bottles
Primalco
Owens
16.0 Bottles
Glenmorangie
7.8 Bottles
Allied Glass
Clintok
Irish Glass
Total 125 Million Bottles
ST Gobain
Negotiation of Contract
ST Gobain
France
M.Picard
Wines
M.
Picard
M.Picard
Spirits
6 bottling
location
26 Million Bottles
Brown-Forman
Beverages
Saint-Gobain
Group
Bolla
Vetrerie
Italiane
Tuaca
ST Gobain
Negotiation of Contract
26 Million Bottles
Saint-Gobain
Group
•Three year agreement
•Just in time delivery
•Quality & Delivery SLA established
•Cost reduction of 5% to 8%
Brown-Forman
Beverages
Owens Brockway Supply Relationships
United
Glass
Glenmorangie
Owens Brockway
Group
Karhulan
lasi
Primalco
34 Million Bottles
SAP’s Impact of Forecasting
Advanced Planner and Optimizer (APO) currently being
Implemented
Before SAP
After SAP
-High Level Forecasting
-Allows BFBW to forecast
at a much product-territory
lower level.
Jack Daniels 750ML in
North America
IMPORTANT BECAUSE OF REGUALTIONS
Jack Daniels Black Level,
750ML in Georgia
Cost Savings from SAP Systems
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Distribution & Transportation
Supply Chain & Demand Planning
Purchasing - Direct Material
Purchasing - Indirect Material
Customer Relation & Promotions
Manufacturing
$4.5 million
$5.5 million
$17.0 million
$14.0 million
$11.0 million
$8.0 million