continued

few months of start-up,” reports Jim Hutchinson, the company’s Senior Vice President of Supply Chain Management.

Once again again, for distributors already running SAP software, the on-boarding process was a “non-event” –– the merger partners were already “speaking the same language.” Brown-Forman was able to meet its long-term inventory targets within a few months of start-up.

40-PERCENT INVENTORY REDUCTION

Meanwhile, on the domestic front, SAP SCM helped Brown-Forman align production, material, and storage constraints with projected demand. This alignment resulted in a reduction of over 40 percent on finished goods inventory over a two-year period. Out-of-stocks, too, were cut, as were materials obsolescence costs.

Global distribution –– of products such as Finlandia Vodka –– required a planning process that synchronized global sales with regional production. Information-sharing based on SAP SCM supported this process. Now, instead of

making expensive business trips to Finland, Kentucky-based supply chain executives can readily hold meetings with resources in Finland via teleconferencing.

Formerly, a four-person team at Brown-Forman was necessary to collect, aggregate, and distribute demand data among the sales and marketing staff and supply planning stakeholders.

Today, with SAP APO, reports are produced automatically with the SAP NetWeaver^® Business Intelligence component and published throughout the organization with the SAP Net Weaver Portal component.

Thus freed up, the Brown-Forman team now focuses on value-added services, such as increasing forecast accuracy through process improvements. Brown-Forman continues to expand its product line and global market distribution, while reducing inventories and maintaining excellent customer service.

Brown-Forman’s investment in SAP SCM is helping the company do what its own Jack Daniel’s whisky does: improve with age. n

BROWN-FORMAN:
Demand and Supply Planning Upgrade at a Glance

OPPORTUNITIES

n Faster assimilate partners and acquisitions

n Tap emerging global markets

n Reduce inventory levels

n Improve customer service

OBJECTIVES

n Establish global positions for premium brands

n Introduce more premium brand beverages

n

Expand business without significant additional headcount

n

Superior integration of supply chain planning with inventory and order management

n

Ability to support Brown-Forman’s global supply network practices

n Viability of SAP as a company

IMPLEMENTATION HIGHLIGHTS

n

Minimal customization

n Tightly managed project scope

n Accelerated implementation within budget

 

BENEFITS REALIZED

n Finished goods inventory reduced 40 percent

n Materials inventory reduced 20 percent

n

Total inventory excluding barreled whiskey reduced 40 percent

n Forecast error reduced 33 percent

n Inventory turns maintained at 12 turns/year

n

Customer service levels maintained at 99 percent-plus

n

On-boarding for global distribution partners accelerated

n

Global sales and operations planning process adopted

n Number of products increased,

while maintaining service levels without adding inventory n