Alcohol beverage distributors in general face a fast-paced business en-vironment with very strict regulatory and financial guidelines. And, unlike most food categories-where margins are only a few pennies-the margins on most bottles of wine and distilled spirits are quite high, and retail price points average $25 or higher.
Warehouse systems that cut down on the amount of mispicks are, therefore, critical to their efficient operation and financial stability.
"One mispick could become an $80 or $100 error because of our higher margins," says Patrick Quinn, vice president of administration at Major Brands, Missouri's highest-volume distributor of premium wines, beers and spirits through multiple retail and foodservice channels throughout the state.
And, for distributors like St. Louis-based Major Brands, the potential for mispicks is huge. "There are 4,500 unique SKUs that we carry, and many look alike and have the same basic size and shape configurations, so the potential for human error is great in picking and put-away," Quinn adds. "We have a lot of volume on a lot of SKUs, and an expensive value per case."
Inside its main 250,000-square-foot distribution center in St. Louis, Major Brands' receiving department can handle up to 20,000 cases per day, and on the outbound side, 13,000-15,000 full cases and 20,000 individual bottles can leave the facility each morning.
Shipment sizes also vary greatly from one customer to the next. "We do a lot of small shipments multiple times a week. We could deliver two cases at one stop and a full truckload at the next," Quinn explains.
For Brown-Forman Beverages Worldwide, Louisville, KY, which markets more than 30 brands of wine and spirits, including Jack Daniel's, Southern Comfort, Finlandia Vodka, and Bolla Italian Wines, picking is just as difficult. Most pallets shipped from Brown-Forman are not made up of a single product. "We might have a truckload that has 40 different line items on it," explains Chris Ford, the company's enterprise solutions consultant.
In addition to managing its own brand portfolio, City Brewing Co., LaCrosse, WI, a large, independent producer and packager of alcoholic beverages, manages and supports a full third-party logistics function for other beverage companies that market malt beverages, teas and energy drinks. It operates five high-volume distribution centers that handle a large portfolio of SKUs and millions of cases.
To help them in picking and put-away, many beverage distributors have implemented warehouse management systems (WMS) in the last few years, and those systems have quickly become the lifeblood of the organization in a short amount of time.
Major Brands just went live with the Warehouse Advantage solution from HighJump Software, Eden Prairie, MN. Quinn already calls it his "personal organizer for 265,000 cases of inventory."
"Now, we have shelf-accurate details about all the inventory we have," he says. "We're not running around the warehouse looking for products. The computer can tell us where anything is on the shelves and where to put it in the warehouse after it's received."
Brown-Forman's Ford reported a 20 percent increase in throughput just two months after implementing a WMS from SAP, headquartered in Walldorf, Germany, in January 2002. Shipping errors dropped from 3 percent to 0.3 percent over that same time period.
A Matter Of Time
For alcoholic beverage distributors, though, the greatest benefit has been the longer picking windows that their WMS solutions have given them. Prior to the WMS, most warehouse workers couldn't start assembling orders until late at night, and, as in any distribution operation, that is typically the hardest shift to fill.