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Neural 2013

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  1. Neural 2013 7th March 2013

  2. Alastair Currie Whisky Operations Strategy Manager

  3. Agenda WHO ARE EDRINGTON? UNDERSTANDING THE BUSINESS CHALLENGE DEFINING OPERATIONAL REQUIREMENTS BUILDING TM1 SOLUTIONS LOOKING FORWARD

  4. Agenda WHO ARE EDRINGTON?

  5. Who Are Edrington? Scotland’s Leading International Premium Spirits Company

  6. Who Are Edrington? – Our Brands

  7. 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)

  8. 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

  9. 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.

  10. Agenda UNDERSTANDING THE BUSINESS CHALLENGE

  11. Understanding the Business Challenge A complex company structure – and ownership of stock……. Wm Grant & Sons Edrington Brugal & Co The 1887 Company Brugal Highland Distillers Suntory Edrington Distillers Intermarché Row & Company Macallan Distillers ….. 200 million litres of Whisky held across 4 entities

  12. 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

  13. Understanding the Business Challenge ORKNEY Highland Park Distillery Non-Edrington Sites SPEYSIDE Macallan Distillery Glenrothes Distillery Glenrothes Cooperage Parkmore Warehouses PERTHSHIRE Glenturret Distillery GLASGOW Great Western Road (Blending & Bottling) Buchley Warehouses WEST LOTHIAN North British Distillery Muirhall Warehouses Clyde Cooperage

  14. 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

  15. Agenda DEFINING OPERATIONAL REQUIREMENTS

  16. 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 • Limited financial analysis PROPOSED TM1 SOLUTION: • 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

  17. Defining Operational Requirements – A Modular Approach STOCK ASSESSMENT Strategic Planning BLEND ALLOCATION Supply Planning LOAD PLAN Operational Movements • STOCK LOCATION • OPTIMAL LOADS • MONTHLY PLAN • SCENARIO PLANNING • 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

  18. Defining Operational Requirements STOCK ASSESSMENT Strategic Planning STOCK ASSESSMENT Macallan Stock Management • 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

  19. Agenda BUILDING TM1 SOLUTIONS Stock Assessment

  20. Building TM1 Solutions – Stock Assessment Stock Extract Sales Forecasts Product Recipes STOCK ASSESSMENT Strategic Planning Module Blend Planning Module Finance Planning Surplus/ Deficit New Fillings Blend Plan Product Costs Balance Sheet Roll Forward Blend Recipes Years 2-n

  21. Building TM1 Solutions – Stock Assessment STOCK ASSESSMENT Strategic Planning • FORECASTS • Data feed from SQL file • Direct data or import • Month-level demand split • Version management

  22. Building TM1 Solutions – Stock Assessment STOCK ASSESSMENT Strategic Planning • STOCK vs DEMAND • Data feed from SQL file • Demand from Forecast • Stock from core ERP system • Surplus or Deficit

  23. Building TM1 Solutions – Stock Assessment STOCK ASSESSMENT Strategic Planning • DISTILLATION PLAN • Forecasted volume by product • Requirements by month • Malt & Grain • Cost of Distillation

  24. Building TM1 Solutions – Stock Assessment STOCK ASSESSMENT Strategic Planning • DISTILLATION PLAN • Forecasted volume by product • Requirements by month • Malt & Grain • Cost of Distillation

  25. Building TM1 Solutions – Stock Assessment STOCK ASSESSMENT Strategic Planning • DISTILLATION PLAN • Forecasted volume by product • Requirements by month • Malt & Grain • Cost of Distillation – annual uplift

  26. Building TM1 Solutions – Stock Assessment STOCK ASSESSMENT Blend Planning • BLENDING PLAN • Monthly demand • Operational plan • Input to Blend Allocation • Input to Macallan Planning • Supply continuity • Stock level management

  27. Building TM1 Solutions – Stock Assessment

  28. Building TM1 Solutions – Stock Assessment

  29. Building TM1 Solutions – Stock Assessment STOCK ASSESSMENT Blend 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

  30. Building TM1 Solutions – Stock Assessment STOCK ASSESSMENT Finance Planning • STOCK UTILISATION • WHISKY COSTS • Optimised use of ages/makes • Cask type management • Alternative stock owners • Annual transition controls • Detailed product costing

  31. Building TM1 Solutions – Stock Assessment STOCK ASSESSMENT Finance 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

  32. Building TM1 Solutions – Stock Assessment

  33. Agenda BUILDING TM1 SOLUTIONS Blend Allocation

  34. Building TM1 Solutions – Blend Allocation Stock Extract from core ERP Product Recipes and Annual Blend Plan ex Stock Assessment Product Orders from core ERP Blend Planning Live ERP system updated Tanker Plan (Multi-blends) Cask Type Control Demand vs Stock Location Control Tanker Locations Non Tanker Locations Casks allocated to open orders

  35. Building TM1 Solutions – Blend Allocation BLEND PLANNING Tanker 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

  36. Building TM1 Solutions – Blend Allocation BLEND PLANNING Tanker 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

  37. Building TM1 Solutions – Blend Allocation BLEND PLANNING Blend 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

  38. 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

  39. Building TM1 Solutions – Blend Allocation BLEND PLANNING Blend Allocation • CASK TYPE CONTROL • Stock Assessment recipe targets • Sherry cask type – US/Spanish Oak • Ex-Bourbon • Other wood types

  40. Building TM1 Solutions – Blend Allocation BLEND PLANNING Blend 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

  41. Building TM1 Solutions – Blend Allocation BLEND PLANNING Blend 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

  42. Building TM1 Solutions – Blend Allocation BLEND PLANNING Blend 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

  43. Building TM1 Solutions – Blend Allocation

  44. Building TM1 Solutions – Blend Allocation BLEND PLANNING Blend 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

  45. Building TM1 Solutions – Blend Allocation

  46. Building TM1 Solutions – Blend Allocation BLEND PLANNING Blend 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

  47. Building TM1 Solutions – Blend Allocation BLEND PLANNING Blend 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

  48. Building TM1 Solutions – Blend Allocation

  49. Building TM1 Solutions – Blend Allocation BLEND PLANNING Blend 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)

  50. Building TM1 Solutions – Blend Allocation