Andreas Stahlmecke has every reason to be proud. “We are the first company in the world using the latest release of SAP Beverage,” states the IT Manager at Veltins. The industry solution is just latest in a series of acquisitions that the brewery’s data processing expert has made from the Walldorf-based provider of standard business application software. Previously, Stahlmecke implemented several SAP R/3 modules at Veltins, bringing a breath of fresh air to production, logistics, and sales and distribution in the company.
Prior to the implementation of SAP Beverage, Veltins used an AS/400 and three different software products to manage its processes. As these software products had to exchange their data over various interfaces, any changes or release upgrades were time-consuming and costly. Another reason for the new approach was the fact that the demands made by the individual departments were increasing, for example additional requirements emerged relating to article-based and customer-based profitability analyses in Controlling. The company needed a solution that could provide an overview of all the brewery’s resources.
Out with the old…
While Veltins is one of the largest medium-sized companies in Germany, with 522 employees and sales of 205 million euros, the company was not prepared to simply buy from the first provider that came along. However, Stahlmecke and his team had already decided in favor of SAP in 1998 – and their choice then was backed up later by the company’s selection of SAP’s beverage solution.
The SAP system was first implemented at Veltins in 1998 with the SAP R/3 module for human resources (HR). Stahlmecke looks back with a smile: “Many of our employees initially had doubts regarding SAP – but when the pay slips came through without any problems, they were not quite so critical.” Soon after, at the start of 1999, the modules for financial accounting (FI) and Controlling (CO) then went into productive operation.
While Veltins was implementing further SAP R/3 modules, the company gathered information on the “R/3 Beverage” product from COPA GmbH, based in Wesel, Germany. “At this point in time,” recalls Stahlmecke, “’R/3 Beverage’ was not well developed enough to meet our needs. But with the integration of contract management, in particular, great progress was made, and we then implemented this module from COPA on January 1, 2001.”
…in with the new SAP Beverage
The software and consulting firm COPA GmbH originally developed and launched a solution for the beverage industry called “R/3 Beverage”. On January 1, 2002, the SAP subsidiary SAP Systems Integration (SAP SI) acquired a majority share in COPA GmbH. Renamed “SAP Beverage,” the solution is now the only complete SAP system for the brewery industry in the world.
After the acquisition of COPA by SAP SI, Veltins upgraded to “SAP Beverage”, Version 02 on April 1, 2002. On January 1, 2003, the company then upgraded to the new Release 03. This release contains additional, important functions and processes for the beverage industry, such as Vehicle Space Optimization (VSO). Summing up, Stahlmecke states: “As a result, we now have a very consistent, up-to-date situation with regard to SAP.” There’s no doubt that the IT specialists at Veltins give themselves a secret pat on the back every now and then, since their decision in favor of SAP has saved the company from costly workarounds.
Hub of operations fully integrated
The hub of all operations at Veltins is the high-rack storage facility at the Grevenstein site, which is geared towards a high throughput. All the brewery’s products are kept in stock here for a fast turnover, including the required empty bottles. The high-rack storage facility is fully integrated in production, as is the issuing of goods to the beverage wholesalers’ freight forwarders.
One thing still missing in the SAP system is order entry, which Veltins handles using software from a third party. This software routes the orders that are entered on two PCs directly to the high-rack storage facility by means of a database trigger. The order data is used as the basis for transferring the goods to the relevant loading point, where they are subsequently loaded. The driver confirms receipt of the goods, and information on the delivered goods is then returned from the high-rack storage facility to the order entry function, again via the database. Only then is the data sent from order entry to SAP.
This procedure made sense in the transition period. As Stahlmecke says, “In the implementation phase of SAP Beverage, the advantage of this method was that the orders received for a whole day in order entry were held at the loading platform and simultaneously parked in the SAP R/3 module for sales and distribution (SD). This meant that, at the end of every day, we could check that the results of both systems matched up.”
This year, Veltins plans to enlist COPA’s help in replacing this order entry function, because the software solution is no longer available. Besides, Veltins wants to eliminate inconsistencies: the current system is not an end-to-end solution – materials management does not have access to the data, and users must access two systems.
Consistency is also playing an increasingly important role when it comes to Veltins’ external contacts. The brewery has a share in the company “Getport,” for example, an association of seven breweries that provides a portal for EDI business with beverage wholesalers. As Stahlmecke explains, “For this to work, we must be in a position to transfer and receive our customer data to and from the portal on a one-to-one basis and without system breaks.”
Optimization for retailers, wholesalers and brewery
SAP Beverage is already providing Veltins with transparent data. For example, sales and distribution staff have fast access to current statistics in the form of the end-of-day or end-of-month settlement figures, which are needed for sales and distribution control. Veltins also plans to optimize the processes between the high-rack storage facility and Getport in the near future. While customers currently do not place their orders until the trucks reach the brewery forecourt, in two years at most, orders will be placed in advance via portals such as Getport. According to Stahlmecke, this will completely change the face of requirements planning in the beverage industry and lead to a high degree of optimization for manufacturers and distributors alike: “At peak times, we sometimes have 10 trucks on the forecourt. With better planning and forecasting, we can ease this situation. And if distributors order electronically in advance, we can also synchronize collection dates, and provide our customers with more accurate information on pick-up times. As a result, the distributors can reduce their forecourt waiting times to a minimum.”
Now that the wheels have been set in motion, Stahlmecke has an information and communication system that can be enhanced to meet new requirements at any time. For example, Veltins plans to move into data warehousing this year. One potential project is the linking up of Nielsen market research data with data warehouse information. As a result, a system could be conceived that enables a sales or marketing manager to track in detail which products sell well in which regions. This information can in turn be used for more accurate production planning and control. At the moment, this is some way off, but it is becoming increasingly clear that the remaining private brewers of Pilsner lager are heading the field when it comes to developing new sales and marketing approaches.