NEW KNOXVILLE BREWING COMPANY

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NEW KNOXVILLE BREWING COMPANY

• SUPPLY/DEMAND CHAIN
• Jennifer McPherson
• Erin Heyming
• Shea Scruggs
• Daniel McMillin

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WHAT WE WILL DISCUSS

• Brief history of New Knoxville
• Supply and Demand Chain Structure
• Production and Distribution
• Who sells the product
• Competitive and Market Strategies
• What customer value means to New Knoxville
  supply/demand chain
  

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HISTORY OF NEW KNOXVILLE

• Founded 1886-1910
• Again 1995-2000
• Resurrected April 2004
• Owner Brett R.-T.
• 1st beer sold in house July 04
• Located 708 E. Depot Ave.
• Microbrewery
• Tasting Room

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CURRENT PRODUCT LINE

• NEW KNOXVILLE IPA
• TRADITIONAL PALE ALE
• ENGLISH BROWN ALE

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SUPPLY/DEMAND CHAIN
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CUSTOMER SATISFACTION
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ORGANIZATIONS INVOLVED

• Raw Materials
• Various Suppliers and Locations
• New Knoxville Brewing Co.
• 708 E. Depot Ave.
• Cherokee Distributing
• 200 Miller Main Circle
• Bars, Restaurants, and Grocery Stores
• Various Retailers and Locations

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SUPPLIERS

• New Knox orders and keeps inventory only by
  demand and forecasting
  
• Long-distance ordering by phone and web
• Financial transactions thru mail or web
• Local orders and transactions made by phone or
  direct contact
  
• Supply chain strives to consist of low cost, high
  qualities components
  

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SUPPLIERS OF RAW MATERIALS

• Cargill Malting
• Malt/Grains (barley, wheat, rye, etc.)
• World-wide malt network
• Specialty Malt Division
• Malt manufacturer (19 Cargill malts)
• Most from Saskatchewan, Canada
• Grown in fields, then shipped to manufacturer
• 6 partner malt manufacturers
• Various distribution centers
• Own extensive supply/demand chain

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CARGILL MALT/GRAINS

• World-wide Truck
  Sheboygan, WI Cargill
  
• growers Plane
  steeping Distributors
  
• Ship germination
• kilning

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SUPPLIERS OF RAW MATERIALS

• Hops found mainly in Pacific Northwest
• Washington, Oregon, Idaho
• Hop Union- Yakima, WA
• Grown in local hop fields
• Transferred to the kiln rooms
• Then bales of hops to Hop Union
• Packaged, stored, and sold

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HOP UNION- HOPS
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SUPPLIERS OF RAW MATERIALS

• Wyeast- Ordell, Oregon
• Grows yeast cultures in laboratory
• Microbiologists select yeast
• Strain, feed, test, monitor, clean, and culture
• Short lead time
• Same day delivery
• Ship by UPS or FedEx

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RAW MATERIALS

• WATER- (local)

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SUPPLIERS OF PACKAGING PRODUCTS

• Crown, Cork, Seal (caps/crowns/lids)
• Dayton, Ohio
• Renaissance Mark- (labels) Montreal, Canada
• Northern Brewer- (bottles) St. Paul, Minnesota
• Atlas Packaging- (packaging) Miami, FL
• SABCO- (kegs) Toledo, OH

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BASIC PACKAGING CHAIN OUTLINE

• 5. Product Receipt
• 4. Transportation of Product
• 3. Packaging, storage, ordering
• 2. Design, manufacturing, assembly
• 1. Procurement of Raw Mats

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Supply/Demand Chain Structure

• Raw Materials Procurement
• Cycle operations
• Most of total chains transportation by truck
• Some 3PLs
• Grains shipped by air, sea, and land
• Yeast by UPS or FedEx
• Suppliers produce continuously
• New Knox orders by demand
• Basic COD payments
• Sends check before shipment
• Shipment made before receipt of check
• Good relations

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INVENTORY

• Inventory
• Keeps inventory only as needed for demand
  replacement and availability
  
• Stored in house because of lower cost and
  available capacity
  
• Inventory turnover about 45 days
• Average lead time for reordering about 5-6 weeks

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PRODUCTION

• Manufacturing
• BREWING PROCESS
• Raw Materials boiled together and extracted
• Hot liquor tankmillmash-tunbrew
  kettlefermentersconditioning tanks
  
• Kegging and Bottling
• In house machinery
• Assembly line process for bottling
• (sanitation, filling, crowning, labeling)
• Direct Kegging
• 50 keg brewing process

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PRODUCTION

• Packaging
• Volunteers sought for by demand packaging
  process
  
• Cuts labor costs
• Transfer to 6-packs
• Insert into cases
• Storage and preparation for delivery
• In-house storage
• Allows for lower costs

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TASTING ROOM

• All products are either stored or sent to the
  distributor except beer sold in house
  
• Kegs are shifted to the bar area
• Customer arrival, order entry, order fulfillment,
  and order receiving
  
• Extra profits, profitable use of capacity, and
  wider access to product

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DISTRIBUTION

• Pull View Process
• Brett monitors Cherokees inventory
• Delivers by demand and inventory observation
  (VMI)
  
• Transports product by own pick-up truck
• Provides opportunity for lower cost
• Retrieves empty kegs for refill at time of
  product receipt
  
• Distributor stores product in coolers until
  delivery
  
• Retailers place orders by demand

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RETAILERS

• Grocery Stores
• Krogers
• Food City
• Restaurants
• Barleys -Mellow Mushroom
• Sunspot -Manhattans
• Bars
• Union Jacks -Preservation Pub
• Cool Beans -The Spot (R.I.P.)

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RETAILERS

• Grocery Stores
• Orders by demand
• Stores in back room until shelf room becomes
  available
  
• Customer arrives and takes product from shelf
• Financial transaction and transfer of ownership
• CUSOMER SATISFACTION PROFITS

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RETAILERS

• Restaurants/Bars
• Orders by demand
• Empty kegs are retrieved upon delivery of product
  
  
• Store kegs in coolers until moved to bar coolers
• Customer orders through bartender or server
• Chain completion at transfer of product and time
  of payment
  
• CUSTOMER SATISFACTION PROFITS

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Competitive Strategy

• Aims to provide high quality beer at a reasonable
  price
  
• Uses fresh, high quality ingredients
• Supply chain uses low storage operations to
  protect against high cost, spoilage, and
  non-usage
  
• Lowers cost by
• Transporting by truck
• Seeking volunteers for packaging process
• In-house storage
• On demand ordering
• Vendor managed inventories
• Beer is positioned as an upscale affordable
  product
  
• Main competition is other high quality beers

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Market Strategy

• Currently markets and sells only to local
  retailers until strong customer base is built
  
• Product Quality Reasonable PriceCustomer
  Sales
  
• Mass Marketing
• Men and Women
• 21 and over
• Anyone who loves to drink high quality beer
• Places his products in bars, restaurants, and
  grocery stores for a more diverse customer base
  

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CUSTOMER VALUE

• By focusing on customer value, New Knoxville
  Brewing Co. is able to extend the benefits
  throughout its supply/demand chain by providing
  
• Great beer at low cost -New Knox profitability
• Product availability -Supply chain
  profitability
  
• Product variety -Ease in inventory mgt
• Customer satisfaction -Good relations
  within SDC
  
• and more!
• money good times!

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QUESTIONS ???