Day: August 5, 2013
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In our last post, we discussed the business challenges of micro and regional breweries producing less than 30k barrels per year (BBL). Now let’s take a look at the mid-level group of craft breweries who produce between 30k and 80k BBL.
In this group, you will find some well-known brands such as Highland Brewing Company, Flying Dog Brewery, and Oskar Blues. Here you have a need for a robust and extensive financial and distribution application. Applications such as Microsoft Dynamics® (there are four flavors of Dynamics) with third party specialty applications such as VicinityBrew is a powerful solution for these breweries. These larger breweries may have an onsite IT support team and their own in house server. These companies have the infrastructure and bandwidth to support a traditional ERP system.
The number of Breweries between 30k to 80k BBL is booming. This market segment has seen the most rapid growth over the past two years. Understandably, not every craft brewery strives to be a 100k BBL company. But if you are a brewery that has broken the 30k BBL per year mark, you have most likely run into these production challenges.
- Quality Tracking
- Costing Analysis
- Production Scheduling
- Bar Code Data Collection
Challenge: Quality Tracking
Solution: Breweries need a solution that has the ability to store and track all QC test results by brew and recipe, so you can review test results over time and review the number of tests performed by recipe. Brews requiring significant adjustments can be easily identified and the recipes themselves can be reviewed. Also, this gives brewers the ability to adjust recipes based on QC data on the fly.
Challenge: Costing Analysis
Solution: Look for an ERP system that allows you to calculate accurate production costs and compare them to actual sales activity. This makes it easier to identify lower-margin brands. By tying an actual production cost to a brand, such as a seasonal brew, you can then take corrective actions if needed by increasing the selling price of the product or, if necessary, discontinuing a poor preforming recipe. Having this depth of cost analysis allows breweries to be able to see the actual profit per unit.
Challenge: Production Scheduling
Solution: First of all, get out of excel! At this point, if you are producing over 30k BBL, you need an forecast that integrates with production. Software such as Vicinity Brew, allows you to run production scheduling and material requirements planning (MRP). It does this by tracking data from sales order to forecast to brews. The production schedule can be derived from an MRP generation that includes sales orders and forecasts, so all demand for an item is considered during scheduling. If the demand for a given item is not reflected on the schedule, the system automatically notifies the scheduler. Breweries need to be able to make scheduling changes in real time and need to communicate these changes to as many departments as necessary. Keeping everyone informed helps departments set priorities for the production, quality and purchasing.
Challenge: Bar Code Data Collection
Solution: There is nothing magical about bar code data collection. Simply find the best solution for your use. That is to say, look for an ERP system that supports bar code data collection across the entire application. Craft Breweries who are producing over 30k BBL may be needing to record production data on finished goods packaging in real time. A word of warning: when looking for an ERP solution for your brewery, make sure there is a solid integration with a reputable bar code data collection application such as Panatrack. If you already have an ERP solution make sure your systems are well under control before adding bar code data collection. Not doing either of these may cost your brewery greatly in the future. As they say “Bar code data collection is a tremendous thing. A bad process gets repeated at the speed of light”. So make sure your manual process is buttoned up prior to automating it with bar code data collection.
Check out these videos to see more information. Our next part will discuss the operational challenges of craft breweries who are over 100k BBL.
- “From Passion to Profits, Taking your Brewery to the Next Level” Part One (vicinitybrew.wordpress.com)
- “IT’S NOT YOU, IT’S ME….” Breaking Up with QuickBooks (vicinitybrew.wordpress.com)
- Craft brewing booms in Minnesota (miamiherald.com)