Mature IT for Noble Vintages

Wachtenburg vintners' association Cellars of the collaborative

A sea of vines and the soft hills of the Palatine Forest surround the wine and champagne-producing town of Wachenheim, Germany. The mild, almost Mediterranean climate of the wine-making region of Mittelhaardt also produces figs, lemons, almonds, and chestnuts. It’s a place for gourmets. A colossal monument, the ruins of the Wachtenburg, tower above the town. It was built in the 11th century and remains the icon of the city. It even gave its name to one of the outstanding vintners’ collaboratives in Rhineland-Palatinate, Wachtenburg Winzer eG.

Created by a merger of the Wachtenburg vintners’ association and the associations of Luginsland and Gönnheim, the collaborative now looks back over more than 100 years of wine-making tradition. Today, some 244 vintners use 320 hectares of prime land to grow the grapes that produce tangy Rieslings, delicate white Burgundies and Pinot Gris, intensive Dornfelders, and excellent Pinot Noirs.

Wines with international reputations ferment in the arched cellars of the collaborative under the supervision of cellarer Werner Reichert. Several prizes from the agricultural chamber of commerce, DLG, and Mundus-Vini testify to the success that the vintners in Wachtenburg have had with newly created varieties of grapes, specialties like Trockenbeerenauslese and Eiswein, and vintage and top-quality wines.

The romance of wine meets IT

Despite all the romance associated with making wine, Wachtenburg Winzer is an economically run business that must meet legal requirements for wine, adhere to the certifications of the food industry, and be able to guarantee batch traceability. And like every successful company, the collaborative needs high-performance IT. Standard IT solutions can’t meet the needs of the wine industry – or the special needs of vintners’ associations. After all, the requirements of collaborative management, vineyard management, and cellars are extremely complex and specific to the industry. That’s why the collaborative worked for years with insular solutions that grew over time.

The heterogeneous IT landscape demanded a great deal of tuning because the data in the individual applications required manual processing. For example, Wachtenburg Winzer managed member master data with business assets and partnership shares in Microsoft Excel workbooks. When members joined or left the collaborative, data had to be changed in the workbooks and in vineyard management.

This foundation made it impossible to conduct strategic management that considered the interests of the members and customers. Wachtenburg Winzer looked for a solution that met all the requirements of the collaborative and permitted batch tracking and tracing. The collaborative decided on a qualified SAP Business All-in-One partner solution, wisA1, developed by KIRBIS in Niefern-Öschelbronn, Germany, which offered the full spectrum of desired functionality.

Implementation of the software began in August 2006. Industry experts from KIRBIS modified the preconfigured functions based on SAP Best Practices according to the requirements of the collaborative, such as for settlement with the German Wine Fund. The team adjusted other business processes, such as those for orders and billing, to the industry standard to increase efficiency.

Since January 2007, all the business processes of the vintners’ collaborative have been mapped to SAP software at 14 workstations. The industry solution integrates the acceptance of grapes, bottling, and wine sales along with the management and settlement of the members and their vineyards.

The core of greater harmony

Ruins of the Wachtenburg above the vineyards

The software enables tuning of both company goals for the collaborative: a focus on customers and on members. Customers expect an optimal price-performance ratio from the wines; members hope to attain the highest possible payment for the grapes that they deliver. An integrated “grape payment program,” a component of wisA1 that can also run independently, can now map both sides. It was clear to the CEO of Wachtenburg Winzer, Franz-Josef Poh, that this core of a vintners’ collaborative could strategically support management only when it was seamlessly integrated with the other processes of wisA1, including collaborative management, accounts payable and receivable, and materials management.

“We used to have to manage individual business areas in our various, homemade systems and then balance them with each other manually,” he explains. Today, the integrated SAP Business All-in-One solution handles time-consuming, routine tasks so that Wachtenburg Winzer saves two days of work when creating its reports on the collaborative. That leaves valuable capacity free for strategic enterprise management.

Simulations improve the quality of grapes

The new software also gives the board of the collaborative a new control instrument. First, it creates the foundation for mobile access to all data relevant to enterprise management. Second, it enables simulation of valuations and payments for grapes. Management can use flexible quality parameters – the level of sugar, the health of the grapes, and the size of the harvest – to run through different alternatives for valuating grapes. It can consider extra payments for particularly high-value cultivation practices in the vineyards, including defoliation or thinning out grapes.

The collaborative uses follow-up grape payment models to set monetary incentives for the production of quality grapes. With follow-up models, the members do not know what price they will receive when they reach specific quality parameters before the harvest. Valuation based on reaching 100 percent of the quality parameters is based on the average quality of the delivered grapes. Only the quality parameters, the percentage levels of extra payments and deductions, and the quantity factors are set before the harvest. Because the members want to obtain the highest possible extra payments, their work in the vineyards and when selecting grapes focuses on reaching the desired values.

The average value for each quality parameter is calculated after the harvest. Payments are reduced for deliveries whose quality lies below the desired average value. “That’s how we can improve the desired quality of the delivered grapes without increasing payments overall for the collaborative,” explains Walter Reichardt, the chairman of Wachtenburg Winzer.

With this approach, the vintners’ association now has a goal-oriented, internal quality policy. The qualified SAP Business All-in-One solution ensures the wines from Wachtenburg Winzer continue to reach oenophiles around the world.