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Boston Beer Company
By: Vinh-Khoi Le, Tim Peterson, Daniel Tonkovich, and
Amanda Yam
 Inputs:
 Cash needed to acquire the raw materials
 The raw materials
 Malt
 Hops
 Yeast
 Water
 Spices
 The labo...
Inputs and Outputs (Cont.)
 The equipment used in production
 Gristmill
 Mash Vessel
 Lauter Turn
 Whirlpool Vessel
...
Transmission of Information
 Information regarding the characteristics of the beer are
obtained via direct sampling throu...
The Process
 The process of making Samuel Adams Boston Lager is
considered a batch
The Process (Cont.)
The Process (Cont.)
Supply Chain
 The supply chain is efficient because it is aimed at
managing the delivery and usage of the raw materials u...
Supply Chain (Cont.)
 Internal Customers
 The quality control department
 The bottling department
 The Final link in t...
Corporate Social Responsibility
 Samuel Adams “Brewing the American Dream”
 Launched in 2008
 Help low income, small bu...
Operations Strategy
 Second largest US beer maker
 Approximately 1% of the domestic market by sales volume
 “Better Bee...
Operations Strategy
 Increased attention to the brewing process and the
selection of raw material inputs
 Higher product...
Freshest Beer Program
 Freshness Tag
 Buy back expired code
 Reduced time and temperature the Company’s beers
experienc...
Demand Forecasting
 Demand has increased 5% to
7%
 Freshest Beer Program
 Managing relations with
400 independent beer
...
Capacity Management
 Effective capacity: 5,720
kegs per day
 Utilization rate: 44%
 Process about 7,200
gallons at one ...
Raw Material Inventory
 External:
 Two-Row Malted Barley
 Reservoir Tap Water
 Internal:
 Bavarian Hops
 Bottom-Feed...
Work-In-Process Inventory
 Unfinished “Juice”:
 Brewing
 Fermentation
 Lagering
 Finishing
 Packaging materials
 Di...
Quality
 User-Based & Process-Based
 Reliable Brand
 Consistent Tastes & Textures
 Testing & sampling of material (raw...
Assessing Process Performance
 Internal Measurements
 Flow Time = 7.5 weeks or 52.5 days
 Flow Rate = 960 gallons per w...
Assessing Process Performance (Cont.)
 Customer-Focused
Measurements
 Freshest Beer Program
 Only .5% of the Beer
Bough...
Recommendations
 Successful in Quality, but not at Full Capacity
 Continue to Reduce Buy-Back Quantity
 Reduce Amount o...
Questions?
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Boston Beer Company Operations Presentation by Vinh-Khoi Le, Daniel Tonkovich, Amanda Yam, and Timothy Peterson

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This presentation explores the operations of Boston Beer Company, known for manufacturing the Samuel Adams Boston Lager. Credit goes to Vinh-Khoi Le, Daniel Tonkovich, Amanda Yam, and Timothy Peterson.


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Boston Beer Company Operations Presentation by Vinh-Khoi Le, Daniel Tonkovich, Amanda Yam, and Timothy Peterson

  1. 1. Boston Beer Company By: Vinh-Khoi Le, Tim Peterson, Daniel Tonkovich, and Amanda Yam
  2. 2.  Inputs:  Cash needed to acquire the raw materials  The raw materials  Malt  Hops  Yeast  Water  Spices  The labor hours required in production Inputs and Outputs
  3. 3. Inputs and Outputs (Cont.)  The equipment used in production  Gristmill  Mash Vessel  Lauter Turn  Whirlpool Vessel  Fermentation Vessel  “Bright Beer” Tank  Bottling Machine  Output: Samuel Adams Boston Lager
  4. 4. Transmission of Information  Information regarding the characteristics of the beer are obtained via direct sampling throughout the brewing process and recorded in a database.
  5. 5. The Process  The process of making Samuel Adams Boston Lager is considered a batch
  6. 6. The Process (Cont.)
  7. 7. The Process (Cont.)
  8. 8. Supply Chain  The supply chain is efficient because it is aimed at managing the delivery and usage of the raw materials used in Boston Lager.  External Members of Supply Chain:  Malts - purchased from one supplier  Hops - purchased through four dealers  Water - received via the tap from the city of Boston  Packaging - multiple outside sources  Glass bottle and labels - only one outside vendor
  9. 9. Supply Chain (Cont.)  Internal Customers  The quality control department  The bottling department  The Final link in the supply chain is the delivery of the finished Boston Lager to distributors and customers
  10. 10. Corporate Social Responsibility  Samuel Adams “Brewing the American Dream”  Launched in 2008  Help low income, small business owners through loans and mentoring programs  Sustainability Initiatives  Increased usage of recycled materials in their packaging  Encouraging consumers to recycle their bottles in advertising campaigns
  11. 11. Operations Strategy  Second largest US beer maker  Approximately 1% of the domestic market by sales volume  “Better Beer”  Craft brewers, specialty beers and most imports  Higher price, quality, image and taste
  12. 12. Operations Strategy  Increased attention to the brewing process and the selection of raw material inputs  Higher production costs  Hand-selected hops  In-house brewing  Tasting and Quality Control  Strong reputation with the craft beer industry  Premium to be charged for its products.
  13. 13. Freshest Beer Program  Freshness Tag  Buy back expired code  Reduced time and temperature the Company’s beers experience at wholesaler warehouses  Forecasting, production planning and cooperation with the wholesalers
  14. 14. Demand Forecasting  Demand has increased 5% to 7%  Freshest Beer Program  Managing relations with 400 independent beer distributors  Seasonal beers  Twelve year-round varieties  Four seasonal beers  Accommodate fluctuations with seasonal demand and taste
  15. 15. Capacity Management  Effective capacity: 5,720 kegs per day  Utilization rate: 44%  Process about 7,200 gallons at one time  Agreements with Third Parties if Demand Increases  Expand Pennsylvania and Ohio Facilities
  16. 16. Raw Material Inventory  External:  Two-Row Malted Barley  Reservoir Tap Water  Internal:  Bavarian Hops  Bottom-Feeding Yeast  Safety Stock?  Sharing program w/ local breweries  Some in handy
  17. 17. Work-In-Process Inventory  Unfinished “Juice”:  Brewing  Fermentation  Lagering  Finishing  Packaging materials  Distribute finished inventory to partners
  18. 18. Quality  User-Based & Process-Based  Reliable Brand  Consistent Tastes & Textures  Testing & sampling of material (raw & WIP) before and during main stages of process.  Inspection: Buyback Program  Out-of-code  Bacterial infection  TQM??
  19. 19. Assessing Process Performance  Internal Measurements  Flow Time = 7.5 weeks or 52.5 days  Flow Rate = 960 gallons per week or 137.1 gallons per day  About $26 million of Inventory  On-site Control Labs and 14 Brewmasters
  20. 20. Assessing Process Performance (Cont.)  Customer-Focused Measurements  Freshest Beer Program  Only .5% of the Beer Bought Back  Financial Measurements  Net Income Increased $19 million  No Inventories and Provisions for Excess or Expired Inventories
  21. 21. Recommendations  Successful in Quality, but not at Full Capacity  Continue to Reduce Buy-Back Quantity  Reduce Amount of Excess Inventory to Distributors to Increase Freshness  Improve Inspection Efficiency
  22. 22. Questions?

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