It's Friday evening -- a perfect time for a cold pint of Guinness. Did you know that 10 million pints of Guinness are drunk around the world every day, four million of them in the U.S.?
Getting all that alcohol shipped from the Dublin brewery to North American warehouses is a supply chain challenge. There are about five hundred different possible combinations of routes, shippers, ships, shipping lines Diageo (maker of Guinness) can use. This complexity in the past has made it hard to obtain visibility into shipping service levels and to start improving them. Real-time business intelligence from SeeWhy, used on shipping data from an SAP system, is providing the much-needed visibility and has helped Diageo improve on-time delivery by 30 percent."Before we launched this project, I had the wrong metric and it came out too late," confesses Andy Cullen, head of planning and exports at Diageo. "Now I think I have the right metric and it comes out in good time, so it gives me some opportunity to intervene. Managing the supply chain is all about time, and the more time you have to fix a problem, the better your results are going to be." What he means by "wrong metric" is Diageo used to measure service to U.S. customers on the basis of dispatch time, when the product left the factory in Ireland or Manchester. If the dispatch occurred on time, Diageo felt its work was done. But a discussion with U.S. colleagues about service revealed a disparity -- while Cullen thought Diageo's service level was 99 percent, the Americans said they measured it at 50 percent. A lot was happening between the product leaving Europe and arriving at the six U.S. warehouses. From Ireland, the containers are shipped by feeder vessel to a European deep-sea port, most often Rotterdam. Then they're put on a deep-sea vessel to the U.S. Trouble can brew at many points along the way.
To detect the problems, Diageo poured three and a half years of historical data into the SeeWhy software to build a baseline of normal performance for each of the different routes. Then it started gathering real-time shipping data from all points along the transatlantic routes and pulling that into SeeWhy. The comparison of historical against real-time data enables the software to predict whether or not shipments are going to arrive on time. "The system has already calculated and knows that if you're sending something in this week of the year out of Rotterdam and it's going to New York, based on actual observed historical data, irrespective of what the shipping company says, it is going to take 70 days to get to New York," explains Charles Nicholls, CEO of SeeWhy. "When we did some tests up front, we found that forward-looking approach was extremely accurate, it could predict which shipments were going to be late more than 80 percent." Diageo managers receive a daily email alert and access to a web-based dashboard that tells them which shipments are running late, but also projects what their on-time and poor performance will be for the month. "Rather than looking back and saying 'ooops, we had a bad month, there's nothing we can do about it now,' they have forward-looking visibility into performance" and can make changes to correct the problems, Nicholls says.
One thing the company discovered was that certain shippers' published journey times did not match their actual numbers. Diageo added days into the shipping schedule where necessary, to make expectations meet results, and juggled shippers a bit.
As a result, that 50 percent on time performance to the U.S. warehouses is now 80 percent. Because the U.S. is the biggest export customer, consuming 60 percent of all exported Guinness, that's an important result. Diageo also now knows how to get that on-time arrival figure higher, but chooses not to. "A higher on-time figure would also mean more early deliveries, which would increase inventories in the States. When you're managing supply chain, predictability is what you need," Cullen says. The visibility has also helped Diageo make better decisions about which shippers to use for which routes, knowing the exact level of service each is providing.
In the future, Diageo may use the SeeWhy software to analyze and improve shipping to other export markets, such as European countries other than the U.K. and Ireland, which account for 23 percent of export volume.It's Friday evening -- a perfect time for a cold pint of Guinness. Did you know that 10 million pints of Guinness are drunk around the world every day, four million of them in the U.S.? Getting all that alcohol shipped from the Dublin brewery to North American warehouses is a supply chain challenge is being met with the help of real-time business intelligence software.