Making Supply Chains More Efficient: What We are Learning in the Three-Tier Beverage Alcohol Industry

By Peter Lijewski, Vice President, Supply Chain Management, Breakthru Beverage Group

In many companies, “Supply” is viewed as a department. However, I believe it should be viewed much more broadly because the supply chain is the core that underpins everything a company does. It’s so central to the success of a business that the efficiency and management of the supply chain can serve as predictors of a company’s success.  Supply chains that benefit from effective management, the right investment, and are enabled by a supportive culture where collaboration is fostered from end to end will thrive.  Supply chains missing these key elements are likely to become fragmented and increasingly inefficient

In the beverage alcohol industry, in which the supply chain is divided across the three-tier structure implemented after Prohibition, collaboration has long been a challenge. However, a combination of necessity due to the evolving tastes and demands of consumers and advancements in technology are making beverage alcohol industry supply chains smarter and more collaborative and, therefore, more efficient.

For example, demand sensing applications and predictive analytics can be integrated into part of supply chain management with incredible results. Depending on your perspective, the application of these types of tools may be enablers or disrupters.  We see them as enablers that allow us to become smarter, nimbler, faster and more precise. And in the beverage alcohol industry, this has become increasingly important.

While the marketing department may use social networks to promote brands, their supply colleagues can also monitor the comments and feedback to determine consumers’ future purchase activity. This allows us to adjust our plans much earlier than waiting for a retail signal to flow through traditional demand monitoring systems. This falls under the category of “demand sensing” where practitioners are using social media filters and other indirect causal factors (weather predictions, brand sponsorship, brand appearance in hit movies or songs) to predict a rise or fall in sales.

However, technology is not the only solution to creating a more efficient supply chain. Companies also need to collaborate effectively internally and with their customers and suppliers. Technology alone can’t create a more efficient supply chain.  It is predicated on a culture of mutual respect and reliance between supply and demand, and an understanding of the importance of unhampered information flow.  Effective companies are using cutting edge tools to enhance their culture and capabilities and are enabling the fulfillment of more products more quickly than their competition. And those that enable the right culture and relationships will ensure that these technologies are being leveraged to their fullest.

This requires investment in smart growth, great talent and an innovative outlook to everything a company does—particularly its supply operations.  We are on this journey within the alcohol beverage industry—reaching across the three tiers to become more responsive to consumers by being at the intersection of technology, its application, our business and our stakeholders.

Peter Lijewski has nearly 20 years of expertise in the Wine, Spirits and Beer industry. Peter has worked in a variety of areas including vineyard operations, bottling lines, customer service, demand and supply planning and more. Along with his extensive industry background, he’s held titles such as the Vice President of Supply and East Coast Operations, Vice President of Global Procurement, and Vice President of Supply Management for Constellation Brands.  His leadership capabilities were instrumental with the transition of Constellation’s acquired businesses and its distributor consolidation. Peter oversees the development and implementation of strategies for the integrated supply chain management at Breakthru Beverage.