Whisky may be seeped in heritage and history, but to meet the global demands on its production the industry is having to think smarter. Find out how Barrachd used intelligent business analytics to simplify the process, reducing planning time from 6 weeks to just 60 minutes.

whisky Barrachd planning

Despite Scotch whisky being worth more than £5bn to the UK economy, a growth in global competition means that distillers have to ensure opportunities aren’t missed due to the inflexibilities of a process that’s been fostered over hundreds of years. The complexity involved in the whisky planning process means that even one of Scotland’s best known distillers could take up to 6 weeks of production planning for each of its different blended whiskies. This meant that it could only be done once a year, with no time for ‘what if’ scenarios or even quick reaction to sales opportunities.

Barrachd worked closely with a private group who own and produce some of the best known Whisky brands in the world to overcome this logistical bottleneck.

Whisky’s Four Planning Challenges

The whisky planning process is supported by a number of specialist operations covering every facet of Scotch whisky, including distilling, blending, bottling, warehousing and distribution.  

Whisky Operations runs four key functions to ensure that they produce the correct amounts of the correct types of whisky at the correct times throughout the year. Stock Assessment, Blend Allocation, Tanker Plan and Load Planning.

The complex planning process begins with ‘Stock Assessment’. This is when key staff assess existing stock and stock that will become available through the coming year as it ages, as well as available stock from sister companies. This is then formulated into appropriate blends, taking account of the age of the whisky, the type of cask and size of cask it is stored in, to match budgeted demand for the planning period.

The output from this process is then passed to ‘Blend Allocation’. The stock specialist then starts his planning process by dealing first with the bulk stock required to meet the demand for their globally marketed blended whiskies. This involved trying to optimise stock collection from many different distilleries and warehouses using spreadsheets and printouts. Setting up a planning schedule for the use of bulk liquid tankers, in a process they call ‘Tanker Plan’.

The stock specialist then uses his Blend Allocation process to plan the collection, vatting and bottling of smaller stock production, such as their single malt whiskies.

The fourth planning requirement in the Whisky Operations process is ‘Load Planning’, this is the logistics planning of setting up schedules for lorries and drivers to collect all of the casks from appropriate sites at a time to match the production plan.

Legacy System 

Previously the current stock position was analysed in a bespoke system built on MS Access and producing results on MS Excel. An experienced member of staff tried to calculate how budgeted sales figures could be achieved with existing stock using recipes to match appropriate blends. They would attempt to plan this for the coming year, but struggled to cope with many issues. i.e. Whisky stock ageing, different cask wood types/sizes, access to product in complex storage facilities and stock owned by sister companies across the group.

(The old blend allocation system was a DB2 based stock system, which was hosted on AS400. The data for the blend allocation was in the stock system, while the stock assessment information came on a paper report. Previously some data was printed out and re-keyed to achieve the allocation of stock and to transfer data between systems.)

The complexity involved in this planning process meant that each different blended whisky they produced, took up to 6 weeks for production planning. So this could only be done once per year, with no time for ‘what if’ scenario planning. 

This also meant that they were unable to run multiple allocations in a given year because this process was so labour intensive and time consuming. Insights into the current stock position were limited by the poor reporting capabilities. The knowledge of how to run the manual processes was concentrated in one stock specialist.

The load planning process was previously set up using very complex excel spreadsheets. This was used to schedule the movement of stock using tankers or trucks, but they struggled to adjust for staff / site holidays, or weather incidents that required changes to the plan on an ad hoc basis.

Scotch whisky production planning

The Solution 

Barrachd have now set up for the client a solution to run through all of these processes using Cognos TM1. The specification for the new system is not a carbon copy of the previous process. In particular, it includes new functionality to automatically allocate casks, based on position in warehouse as well as many other new functions that offer stock planning staff more control and more flexibility.

With the new TM1 system they can:

  • Import data on existing stock
  • Calculate what stock needs to come from where
  • Give insight into the current stock position vs demand
  • Automatically allocate stock from a million possible casks to specific production runs
  • Store several versions of the results, giving the option to choose the final results to use

In their new TM1 system, Stock Assessment automatically creates a selection of blends that can be achieved in the coming planning period. It takes into account, the stock available now, stock becoming available through the year as it ages and stock available at sister companies, matching this to demand as agreed in the budget. The manual working on paper has been eradicated by Cognos TM1. (And there is now no need to print data and manually rekey in the new application.)

Stock Assessment results then automatically flow into Blend Allocation. The new TM1 system can then automatically create a plan to optimise the collection of these Whiskies’ from their various distilleries and warehouses by ‘Tanker Plan’. This utilises large liquid tanker vehicles for bulk transport of the whisky, starting the blending process on route.

Now that these processes are run on their TM1 model, running a Tanker Plan for one of their blends only takes around 30 seconds for an automated result. The stock specialist can then manually tweak this if necessary. This now allows time to run numerous versions of the plan and select the most appropriate. They can also easily re-visit the plan at any time through the year, re-run it, make changes etc. Allowing them the flexibility to respond to business needs.

The stock specialist then uses his ‘Blend Allocation’ Cognos TM1 tool to plan the collation of various Whiskies for blending / bottling to match the ‘Stock Assessment’ requirement for smaller production runs (Single Malts and speciality Blends). This planning takes account of Whisky type, Whisky age, Cask storage size (Barrel/Butt/ Hogshead/etc), Cask storage type (Sherry/Oak/Refill/ etc), Geography of current storage facility, Cask’s position and accessibility within that site and several other key factors. Again this is now an automated process, with manual functionality to tweak results when required.

‘Load Planning’ is now an automated process in the TM1 solution and takes account of stock mustering points, geography of sites, holidays, half day Fridays, etc and produces an optimised schedule and route plan. Again this optimised and automated process runs in seconds, and produces a more accurate result than the previous system which took planning staff several days to complete.

With Stock Assessment, Blend Allocation and Load Planning processes all automated in TM1, the end to end process is now linked in one TM1 application. This gives benefits above and beyond the benefits in the individual areas, such as the ability to run scenarios based on different assumptions in the first area and track the impact of that across all areas. 

TM1 whisky

The Future

The process focussed on planning the depletion of existing stock. Now that the benefits of a new TM1 system are being realised, the whisky giants now intend to start using TM1 to help them plan the refilling of casks and warehouse space as they lay down new Whisky to age and become future stock.

The Benefits 

  • Improved insight into the stock position.
  • Faster stock allocation process (e.g. Tanker Plan going from weeks to minutes).
  • Facility to run multiple scenarios.
  • Ability to plan more frequently, perhaps to react to changing business conditions.
  • Removal of risk attached to single key specialist staff.

Posted in Food and Drink On June 11, 2015 By