Brown-Forman Corporation

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Brown-Forman Corporation The Impact of SAP on
Global Operations Amanda Landrum
Brian Danos Matt
Wollner Celyn Maggioni
Molly Jaworski
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• Outline
• Brown-Forman Overview
• Whiskey Making Process Overview
• Supply Chain Overview
• Impact of SAP
• Company
• Forecasting
• Purchasing

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In our project we, will be focusing specifically
on the division - Brown-Forman Beverages World
Wide the impact SAP has had on it. Through
Brown-Forman Beverages Worldwide, Brown-Forman
produces and markets many of the most well-known
and best-loved wines and spirits in the world.
They include Jack Daniels, Canadian Mist,
Southern Comfort, Early Times, Korbel champagnes,
Fetzer wines, and Bolla wines. BFBW is
Brown-Formans largest division.

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Brown-Forman Worldwide Production Facilities
Collingwood, Ont, Canada
Dublin, IRL
Greenfield, CA Guerneville, CAHopland,
CAWindsor, CA
Louisville,KY Versailles,KY Lynchburg,TN
Frederiksted, St. Croix, U.S. Virgin Islands
Chagny, France
Livorno, Italy
Verona, Italy
     St. Leonards, Australia
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Whiskey is

• Made from Grain
• Distilled less than 190 proof (95 by
• volume)
• Usually aged in oak barrels
• Usually aged for at least 3 years

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The Process of Whiskey Making

• Milling
• Mashing
• Cooking
• Fermentation
• Distillations
• Aging
• Bottling

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Supply Chain Physical Profile Spirits
Supply Chain Physical Profile Spirits
Model Dist Inventory
Distilleries
Bottling Plants
Cooperage
Barrel Warehouses
BF Warehouses
Distributors
Retailers
Other Vendors (e.g. caps, labels, flavorings,
glass, boxes)
Other Vendors (e.g. utilities, grain corn)
Agency Partners

• BGC is located in Louisville, KY with a daily
  capacity of 2000 bl
• approximately 95 of production _at_ BGC is used
  internally

• 4 Distilleries -(Jack Daniels, Early Times,
  Canadian Mist, LG)
• 2 Processing facilities (Clintock, Mt. Eagle)

• 83 storage facilities (JD-68, CM-8, ET-7)
• 1.964M sq/ft of storage space
• Cost of warehousing
• JD-3.91, CM-8.68, ET-5.92 (bl/yr)

• 4 Bottling Plants and one bottling line owned at
  Clintock
• LPO volume was 6.1 9L cs in F 99 (not including
  Pinnacle)
• JD volume was 6.1 9L cs in F99

• 7 facilities (JD, LPO, Pinnacle, 3 export, 2
  import, 19 Bailment)
• Inventory days in F99 9L cs JD - 18, LPO - 25

• Approx. 800 ship-to points worldwide
• In the U.S. - 32 open states, 18 control states

• 3 mills two owned in Kentucky, one in Ohio)

• On off premise retailers

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So, how does Brown-Forman forecast demand plan
production?

• Two Separate systems used
• Demand planning for liquid
• Supply chain planning for bottling and
  distribution

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Demand planning for liquids

• Proprietary systems develop by Brown-Forman
• Used to plan barrel and whiskey production
• Used to manage long-term grape contracts and
  vineyard plantings
• Production schedules updated semi-annual

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Supply chain planning

• Implemented SAP ERP system - May 1999
• Y2K solutions for 17 legacy systems
• Update to 4.6 release - July 2001
• Strategic decision standardize on SAP software
  solutions - December 2000
• Currently implementing APO module of SAP for
  supply chain planning

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SAPs Impact on Brown-Forman

• Knowledge to make decisions
• Quick Access to information
• Inventory levels
• Financial impact

• Facilitate communication throughout
  Brown-Forman

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• SAPs Impact - Purchasing
• EXAMPLE Glass Procurement Process
• Complex Supplier Network
• Lack of Consistency
• Purchased in small amounts from
• multiple vendors

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Glass Supply Relationships
Millions (000,000)
40.0 Bottles
16.6 Bottles
1.0 Bottles
43.8 Bottles
16.0 Bottles
7.8 Bottles
Total 125 Million Bottles
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ST Gobain Negotiation of Contract
26 Million Bottles
Brown-Forman Beverages
Saint-Gobain Group
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ST Gobain Negotiation of Contract
26 Million Bottles

• Three year agreement
• Just in time delivery
• Quality Delivery SLA established
• Cost reduction of 5 to 8

Brown-Forman Beverages
Saint-Gobain Group
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Owens Brockway Supply Relationships
Owens Brockway Group
34 Million Bottles
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SAPs Impact of Forecasting Advanced Planner and
Optimizer (APO) currently being Implemented
After SAP -Allows BFBW to forecast at a much
product-territory lower level. Jack Daniels
Black Level, 750ML in Georgia
Before SAP -High Level Forecasting Jack Daniels
750ML in North America
IMPORTANT BECAUSE OF REGUALTIONS
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Cost Savings from SAP Systems

• Distribution Transportation 4.5 million
• Supply Chain Demand Planning 5.5 million
• Purchasing - Direct Material 17.0 million
• Purchasing - Indirect Material 14.0 million
• Customer Relation Promotions 11.0 million
• Manufacturing 8.0 million

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