Brochure-beer-ebook-EN-v7

The Quintiq
book of beer
Supply chain planning and
optimization strategies for today's
challenges and opportunities

Supply chain planning and optimization
for the beer industry
3 Today’s beer market
4 The big picture for big results
Challenges and how to overcome them
11 Reverse logistics
12 Tank scheduling
Opportunities to profit
14 Supply strategies
16 Supply chain agility
Keeping your operations steady
18 Demand strategies
22 Commodity challenges
23 Pairing sales with operations
What’s brewing in the East?
26 East is not West
27 Opportunities in China
29 Quintiq’s role in the beer industry
Contents

Today’s competition is not about other brands or
manufacturers. Instead, the competition is for a
share of palate of drinkers who are increasingly
choosing craft beer over leading brands. The
desire to experiment and exposure to a greater
variety of tastes and brews, particularly among the
millennials, has changed the beer landscape.
In 2014, small brewers in the US increased output
by 18%, against an overall industry production
increment of just 0.5%. Beer brewers are driven
to offer a wider array of choices in product, flavor
and packaging. The industry has gone from a very
limited number of SKUs to over 8,400.
Since 2011, AB InBev, producer of Budweiser and
Bud Light, has purchased four US craft breweries.
In the UK, SAB Miller, wanting a piece of the
region’s UK craft brewing boom, acquired Meantime
Brewing Company.
Today’s beer market
3
Consumer purchase is moving from bars
and specialty stores to retail outlets such
as supermarkets and convenience stores.
Retail outlets’ lower profit margins are putting
greater pressure on the prices and margins of
manufacturers. They are also keeping inventory low
to reduce warehousing costs, insisting upon ever
smaller and more frequent product deliveries.
All this presents new distribution challenges.
Beer manufacturers need to innovate and make
operational changes to survive and succeed.
There is a solution in sight – it lies in a technology
that incorporates artificial intelligence and record-
breaking optimization to solve the industry’s
planning puzzles.
Supply chain planning and optimization for the beer industry
Then Now
4,000 1,000
100 2,500
1.2
hundred
million
2.4
hundred
million
Distributors
Breweries
Liters

4
Companies serious about making effective
changes within their organization need to
take a step back and examine their entire
supply chain, from demand-based delivery
to reverse logistics.
Next, look into filling all the gaps across the
three time horizons – operational, tactical
and strategic.
Lastly, to push for improvements that will
bring desired results, all parties need to
work together on a single platform. Visibility
across the board allows everyone to work
towards the same business goals.
Achieve business goals across the supply
chain with end-to-end planning
• Supply of raw materials
Optimize storage and processing space.
Reduce spoilage of raw materials, storage
overflow and transportation costs with
demand-based delivery plans.
• Mill operations
Use accurate demand forecast information
to ensure the optimal use of production
lines, workforce, and logistics. Manage
raw materials, packaging materials,
and machine and tank usage with one
centralized system.
• Storage
Minimize the risk of supply volatility with
complete demand information.
• Brewery, bottling plant and filling
plant operations
Plan product mix, feedstock, production
lines, workforce and logistics with
accurate demand forecast information.
Improve production planning to get the
most out of plants, production lines,
equipment and workforce. Aim for optimal
detailed scheduling sequences for batch
formulations, equipment flushing and
outbound logistics.
• Logistics between wholesalers
and retailers
Use optimal scheduling to consolidate
shipments based on delivery routing, delivery
costs, transport capacity and functionality,
and customers’ stock levels.
• Inbound reverse logistics
Schedule container recovery and
cleaning activities to avoid bottlenecks.
Plan reusable container delivery around
production and filling operations to
boost efficiency.
The big picture for big results
Quintiq tip
Fragmented planning is inefficient
planning. Use a single planning solution
to fully utilize your resources, improve
product delivery and reduce costs.

5
Are you too busy fighting fires that you lose focus on
the bigger picture?
Challenges and surprises will disrupt plans – but
not if you’re steps ahead. Anticipate disruptions and
optimize planning to encompass all horizons.
Strategic planning
Make informed decisions based on accurate insights
– the consequences of these decisions could be felt in
the months and years to come. Use demand, capacity
and performance history to:
• Plan production, distribution and entry into
new markets
• Explore new product lines, e.g. flavors, sizes and
lower alcohol content
• Simulate what-if scenarios, e.g. if there is a drought
that affects the supply of raw ingredients, or a large
and urgent order comes in
• Plan routine maintenance and equipment upgrades
to minimize disruptions
• Design your entire supply chain, from brewery
to logistics
Plan across multiple time horizons to maintain complete business control
Quintiq tip
A good planning system can help
determine the ideal balance for all
processes and suggest optimized
schedules. This allows schedulers to
visualize the impact of variables on all
relevant KPIs, fine-tune plans and make
the best decisions. Invest in a good supply
chain planning and optimization solution
with an integrated platform to support
every stage of your supply chain journey.
Tactical planning
All departments must have visibility of data, and
instant access to it. Only then can the S&OP process
be integrated, based on realistic forecasts, the latest
data and finite capacity. When everyone is on the same
page – production is able to meet the orders that sales
bring in.
Operational planning
Planning at this level deals with disruptions:
• Acceptance of large orders without checking
on capacity
• Machine breakdown or tank unavailability
• Tightly linked resources that are not aligned
• Determining optimum production quantities
and inventory levels

6
Planning horizons and solutions Capabilities Benefits
Strategic
Sales and operations planning
Years ahead, quarterly, monthly
• Product mix optimization
• Demand planning
• Supply chain scenarios
• Accept the most profitable
product mix
• Improve supplier contracts
Tactical
Master production scheduling
(liquid + filling)
Weeks ahead, daily
• Order planning
• Material planning
• Optimal loading of
wandering bottlenecks
• Improve delivery performance
• Improve customer service
• Reduce lead times
Operational
Scheduling (cycle-based)
Days ahead, minutes
• Detailed scheduling
• Material reservation
• Batching
• Increase throughput
• Increase yield
• Improve delivery performance
Supply chain planning is also essential to support business growth.
The supply chain needs to grow along with the company’s ambitions.
Beer manufacturers have to consider factors such as:
• Keg utilization
Speed up keg or bottle returns so that they can be quickly refilled and
put to service.
• Transportation
Optimize distribution and return of kegs and bottles to minimize empty
space and unnecessary trips.
• Quality control
Keep tabs on product quality throughout the entire supply chain –
maintain stable temperature during storage and transportation,
manage product expiry and recall damaged goods.
Quintiq solution
Unlike typical planning and simulation tools, Quintiq analyzes, in real
time, the impact of all planning decisions on business KPIs. It then shows,
also in real time, the impact of decisions made for one time horizon
across other time horizons. Decisions that look great within one planning
horizon may be disastrous for the overall performance of the company
across other time horizons. Real time visibility ensures planners are able
to make informed recommendations, whether on extending the product
portfolio or expanding production capacity.
• Long-term material planning
• Long-term capacity planning
• Monthly rolling forecast
• Campaign planning
• Order promising
• Sales budget allocation
• Slitting optimization
• Tank scheduling
• Reduce inventory
• Increase throughput
• Reduce costs
• Improve quality
• Minimize inventory costs
• Increase long-term
delivery performance

Where you can apply Quintiq solutions
Sales and operations
planning (S&OP)
• Demand planning
• Supply chain design
• Supply chain planning
Master production
schedule (MPS)
• Safety stocks
• Material replenishment
• Capacity optimization
• Logistics planning
• Detailed scheduling
• Workforce planning
Logistics
7 Supply chain planning and optimization for the beer industry

8
Integrate multiple IT systems
onto a single platform to
optimize resources
Planning in silo systems is a barrier
to producing great results. Every time
data moves between different planning
systems, the risk of transmission
errors increases and the quality
of planning decisions declines.
All planners need to use the same
set of data and be able to view the
impact of every decision they make.
In integrated planning, enterprise
resource planning (ERP), master
production schedule (MPS) and
manufacturing execution systems
(MES) are brought onto a single
platform. Data collection, material
management and resource planning
are visible to all stakeholders who can
now make informed decisions.
Integrated business planning (IBP)
ensures an optimal balance between
supply and demand. Planners can
make the best decisions concerning
production and distribution while
C-level managers can keep an eye on
each department’s goals.
The three dimensions to IBP
Horizontal integration
Schedules for interdependent
operations are coordinated. For
example, if hop or water supply
falls short or is disrupted, planners
need to know if they are able to
meet orders or have insight into
how to minimize any shortfall. The
consolidated view of interdependent
suppliers, operations and deliveries
allows planners to choose from a
number of what-if scenarios.
Vertical integration
Vertical integration connects strategic
planning to scheduling, capacity
planning, sales and marketing, and
operations planning. This lets planners
know how disruptions will impact key
performance indicators (KPIs).
Functional integration
Functional integration has is
limitations. It can show you how
much money you made in the past
but cannot project future earnings.

Profit with an integrated supply chain
An integrated supply chain unites all channel partners — suppliers,
intermediaries, third-party service providers, distributors, finance,
and most important of all, customers — and coordinates their
actions.
For example, in orchestrating the flow of goods to customers,
intelligent forecasting ensure the right signals to trigger inventory
release from the warehouse and production at the brewery. The
procurement of raw materials also needs to be managed to minimize
spoilage.
In logistics, data collected from tracking items and vehicles in real
time allows managers at production and filling lines, loading docks,
distribution centers, shops, and other critical locations to fine-tune
processes and overcome bottlenecks.
• Leverage multiple perspectives
Profiting from an integrated supply chain starts with examining
your chain from multiple perspectives – customers, suppliers, sales
force, finance and so on. Then, you can optimize your supply chain
from the perspective of those needs.
• Orient your supply chain to demand
Start by assessing and quantifying how you can best serve your
customers or end-users, and then develop an integrated means
to realize that end. An integrated supply chain will minimize
overproduction and underproduction.
Point-of-sale (POS) data will give you a granular view of demand.
It can include the number of items sold, where and when they were
sold, and even the zip code of the person making the purchase.
You can then use this data to determine demand patterns and
develop models to enhance short-term forecasts.
With demand modeling, planners can collaborate more closely
with retailers to come up with promotional activities. Responses
to promotions and pricing allow you to devise demand-shaping
strategies that can lead to greater profitability.
9 Supply chain planning and optimization for the beer industry

10
Challenges and how to overcome them

11 Challenges and how to overcome them
One of the biggest challenges in the beer industry is
reverse logistics. As manufacturers introduce new
variants, they need to deal with products of different
lifespans, and hard-to-predict events. This affects
the collection of containers. For products supplied in
kegs, the industry standard is to have eight kegs in the
brewer’s float to supply to one tap, at any one time. This
is because empty kegs need to be refilled while some
are awaiting shipment or in transit.
Reverse logistics requires beer manufacturers to plan,
implement and control the flow of containers from the
point of consumption back to the point of origin. This
needs to correlate with the planning and scheduling of
full containers.
Vehicle capacity needs to be maximized, from the
moment it leaves the plant fully loaded until it arrives
back to the point of distribution/loading with empty
containers collected from, or near drop-off points.
It’s not unusual for about 40% of truck movements
to be empty haul moves. This means drivers are paid
for unproductive driving and there is wastage due to
fuel consumption.
To maximize the use of refillable containers, prevent
empty moves and reduce transportation costs, optimize
routes and capacity with a transportation planning tool.
Tracking and predicting the return of empty containers
reduces the need to purchase new containers.
Assuming that a bottle is returned 20 times, you can
save up to 90% in replenishments costs.
How do you create an accurate forecast
for your container returns?
Start by combining trade losses and historical returns
together with population estimates and sales demand
forecast. Visibility over the effect of price, promotions,
and deposit cost increase on expected container
returns will help you make informed decisions.
Reverse logistics
Quintiq tip
Plan and schedule using a single
optimization platform that can
accommodate both laden and
empty container moves.
The impact of trip rate on
mean bottle costs
Trip rate per bottle
Averagecostperbottle
12
10
8
6
4
2
0
0 5 10 15 20 25

Challenges and how to overcome them12
Managing complexity to maximize usage
To truly optimize your brewery operations, you need to
consider all the characteristics of your products and
resources, including tanks. The right scheduling system
recognizes this – from the tanks’ different properties
to special cleaning requirements. Furthermore, it
understands how these connect and interact with one
another. Armed with this essential information, you can
generate schedules to maximize efficiency, throughput
and profits.
A great scheduling system is able to do all these:
• Allocate and split batches to and between tanks of
different sizes
• Schedule the emptying and cleaning of tanks to
maximize storage capacity
• Manage buffers to maximize brewery throughput
• Plan pipe usage for multiple products and flow rates
• Generate optimal schedules for tank cleaning, and
recognize changeover values for diverse characteristics
such as quality and brand
• Manage fermentation, maturation and brew
lengths accurately
• Consider different beer concentrations at each
step of the dilution process
• Match the existing product in the tanks with
the packaging plan, which may be adjusted
to respond to changes in demand
Tank scheduling

Opportunities to profit14
Dealing with uncertainties, an ever-expanding product portfolio and capturing
opportunities are not the only complexities that beer manufacturers need to
overcome. You need to plan for opportunities such as weather, sports events,
festive seasons, holidays and cross promotions. Demand fluctuation is further
complicated by perishable stock and unstable supply of raw materials.
An integrated planning platform allows for accurate forecasting. This will help
you to develop scenarios for the inflow of raw materials, inventory stocking and
allocation of demand to individual plants.
Use advanced liquid scheduling solutions to model production lot sizing and
scheduling decisions with batching rules, setup logic, sequence-dependent setup
costs and times, and alternative routing and recipes.
Look for a 100%-fit solution that easily models to:
• Accommodate multiple production stages
• Synchronize scheduling across each stage
• Factor in bottlenecks between stages of production
Supply strategies
This sophisticated approach ensures optimal production plans and schedules.
Good initial schedules are produced automatically, saving the scheduler time.
This allows the running of scenarios in search of even better options.
Uncertain demand makes it necessary for demand planning to be based on
forecasting. Break the demand plan into business units, value streams or
geographical entities. For example, sub-scenarios can be created for each brand
and geographical region.
Improve demand planning and forecasting with internal collaboration. Integrate
forecasts and promotional and pricing plans with distribution, operations planning,
manufacturing, etc.
Demand planning can leverage on statistical forecasting or collaborative
forecasting. Statistical forecasting uses historic data to guide future decisions.
Collaborative forecasting collects forecasts from different sources to come up with
a consensus forecast.

15
Demand planning based on consensus forecast
Quintiq tip
Gathering market intelligence in a
transparent and integrated way is key
to achieving consensus.
You can also shape demand by utilizing what-if
analysis. Measure the outcome of promotions,
such as price reductions or limited edition packs,
to your profit margin and bottom line. What-if
analysis is also useful to help you predict
negative consequences to developments, such
as price increase or shortage of raw materials.
EQL
EQL
Promotion
Promotion
Mature
Mature
Mature
EQL
NPE
NPE
Consensus
forecast
Marketing
plans
Statistical
forecast
Customer
forecast
Sales
forecast
Crowd
forecast

16
Supply chain agility
The trend of adventurous drinkers and consolidation between big brewers and
microbreweries means beer is no longer a commodity. The ever growing number
of products, SKUs and promotions require planning to cover all functions to
support business strategies, goals and targets. As business grows bigger, the
sales and operations planning (S&OP) process needs to be improved to boost
supply chain agility.
Promotions and unseasonal events can cause demand to fluctuate. Meeting demand
is complicated further by the two stages of production: brewing and bottling.
Use dynamic planning to plan for production spikes. Optimization technology
generates optimal plans according to your rules, constraints and business KPIs:
• Forecast demand by location and time (season, festivals, events)
• Locations of distribution centers
• Stock availability at different stores and distribution centers
Optimize your brewing capacity with S&OP. It typically covers a time-horizon of 24
months and is reviewed on a regular basis, usually monthly. A sophisticated S&OP
process will boost your corporate performance and make your brewery more
profitable by balancing supply and demand. Here’s how you bring your S&OP to
the next level:
• Feed that data hunger
S&OP requires data from all fronts, such as sales, inventory and product
master data, cost and price information. It also needs to consider commodity
costs, price pressures and regulations, and even seasonal factors such as
weather, events and promotions.
• Create an unconstrained demand plan
Create demand scenarios to explore a variety of options.
• Match demand with supply
Once you have a demand plan, match it to a supply plan. This is the stage where
you find out which decisions can meet the demand and business goals after
factoring in constraints such as tank capacity, empty container requirements,
raw material inventory and shelf life.
• Agree on a recommendation
To generate the most profitable supply chain, involve all representatives – sales,
supply chain and innovation. Include HR if necessary. This will help you identify
gaps and formulate recommendations to take to senior management.

17

Quintiq tip
Quintiq tip
Keeping your operations steady18
Demand strategies
An integrated planning platform allows planners to visualize tradeoffs
between promised order fulfillment requirements, inbound warehouse
capacity and inventory costs. Planning decisions to increase or decrease
inventory levels are immediately reflected against KPIs within the planning
dashboards. Quintiq's optimization ensures that customer service levels are
met with minimum inventory levels. Optimization also ensures that you meet
production requirements with minimal purchases of additional containers.
Build agility into your forecasting
Can your supply chain deal with a volatile market? This isn’t just about managing
risks. You need to be ready to take advantage of opportunities when a competitor
is affected or when a new market opens up. You may already have sophisticated
demand forecasting tools, but that is not enough.
The difference between an agile supply chain and one that is not is the ability to
create plans based on those forecasts. The supply chain needs to swiftly adapt to
changes or expected changes (demand sensing), and take advantage of demand
possibilities (demand shaping).
Real agility is only possible when demand forecasting and planning are
integrated at all planning levels – from strategic decisions about product
portfolios, down to operational decisions about assigning production capacity
in the next 24 hours. Companies that combine demand forecasting with
effective planning and optimization are the ones equipped to take advantage
of trends and tipping points.
Managing inventory, forecasting and logistics
to keep a profitable flow of products
To manage profitable inventory levels, practice intelligent forecasting and planning
of reverse logistics. Focus on demand-driven manufacturing to avoid tying up
resources with high inventory.
Accurate forecasting needs to be in place to manage the inflow of raw materials,
stocking of inventory and allocation of demand to individual plants. Inventory
planning of safety stock levels, reorder points and reorder batch sizes must
be integrated with distribution planning. This will prevent the volume of goods
produced from increasing above the handling capacity of the warehouse and
transportation network.
Returnable containers should be brought back from the market in time to fulfil
production plans. This isn’t a problem when production and transport planning
tools communicate with each other.
To respond quickly to changed circumstances, sophisticated demand forecasting
needs to be integrated with sophisticated planning. For example, if your forecasts
indicate that you’ll be selling a certain product in significantly higher quantities over
the next few weeks, many things have to happen across the extended supply chain.
Suppliers have to be informed. Production capacity needs to be reserved. Logistics
must be planned.

19
Quintiq tip
How to become a demand-forecasting expert
Demand forecasting is about capturing a realistic view of potential – your company’s
and the market’s. Supply and demand must be balanced with your production and
transportation capacities. This allows you to make informed decisions about which
markets to focus on, what services to provide and which customers to prioritize.
Here’s how you can become an expert on demand forecasting:
• Collaborate
Information is key. Collect as much data as possible from all parts of your supply
chain. This is crucial for obtaining high quality demand signals and supply
possibilities. Build relationships with your suppliers, and channel partners,
customers and even internal departments such as sales and marketing.
Collaboration between all links in your supply chain is essential to achieving solid
forecast accuracy.
• Don’t just rely on machines
Automation and optimization does not mean the role of human planners is
diminished. High quality and experienced planners have the skills to critically
assess forecast information received. Planners can add more value by making
adjustments to the original forecast based on their knowledge of resources and
relationship with suppliers, vendors and customers. Crowd forecasting is a great
method to determine demand for new consumer-based products.
• Monitor and control
Keep close tabs on deviations in demand and supply. Integrate your operational
systems to quickly respond to unexpected changes in demand and supply.
• Shape
Establish a process to enable quick, data-driven decisions that would optimize
profit, based on the alerts received in monitoring and control. These decisions
will shape demand management in your sales and operations process.
• Automate the forecasting process where possible
Automation reduces human work. An automated, multi-scenario planning
solution will facilitate, speed up and improve all aspects of demand forecasting.
Free up the planner for decision-making.
• Combine multiple sources of information to improve accuracy of forecasts
Gather data to map out patterns and trends. Don’t limit your data collection to
internal sources such as sales and marketing. Also consider crowd forecast
and external indicators such as upcoming big events or even commodity prices.
All these will help you predict future demand and plan for resources.
• Use different but synchronized demand plans to support each planning level
Plans for one time horizon will effect another. For example, you may target to
increase next year’s sales by 20%. Are your monthly plans helping you get there?
Ensure that all your plans are aligned to meet your end goals.
• Integrate demand planning with sales and operations to close
supply chain gaps
S&OP is a process that constantly aligns supply and demand scenarios.
Put a financial value to your plans to measure impact on revenue and profit.
An accurate picture of likely demand for your products and services will help you
bridge the gap between your customers’ demands and your operations’ capacity.
Want to plan for near-100% service levels, minimize stock levels, improve
profit margins and lower operating costs? Choose a demand planner that
provides insights into season and market fluctuations.

Quintiq tip
Supply chain and the global market
According to the 2013 Gartner-Supply Chain Digest
survey, 85% of respondents believe that flexible supply
chain applications are critical, but only 42% say their
current software provides that flexibility.
Can you tailor your products and services to meet
the unique and constantly evolving requirements of
existing and new customers? Can you do this quickly
and effortlessly?
When markets are relatively stable, it is enough to
rely on rough demand forecasts based solely on
historical data. However, today’s economic climate
is more volatile. Currency fluctuations could cause
serious consequences to costs and the bottom line.
Climate change could disrupt the supply of raw
materials. Calculating safety stock levels and order
acceptance have become both increasingly important
and complicated. Accurate and continuously updated
demand forecasts are now more vital than ever.
Companies supplying to the global market or with
operations spread out around the world need an agile
supply chain as the powerful differentiator. Use global
capacity to satisfy demand. View all your capacity –
trucks, trailers and warehouses – as a common pool
of resources ready to be deployed to cater to demand,
wherever it comes from. Instead of restricting yourself
to what is usually produced in a particular factory or
stocked in a certain distribution center, look for the best
ways to use your global capacity to satisfy demand.
An agile supply chain allows you to scale up
and down and reconfigure resources rapidly
with ease.

Scenario-based demand planning
Leave nothing to chance. Uncertain times require
a different approach to forecasting – one based on
assumptions rather than repeatable historical patterns.
Bring risk management into the heart of the planning
process. Prepare several forecasts. This allows you to
gauge the impact of potential disruptions.
Scenario planning empowers you to explore how
demand may change in different parts of your
business. You could break down the demand plan into
business units, value streams or geographical entities.
For example, you could create sub-scenarios for each
geographical region before aggregating the chosen
scenarios to arrive at a company-wide perspective.
This will give you a feel of what may happen in various
geographical areas and their impact on your company.
To arrive at a demand forecast that can be fulfilled,
the capacities and capabilities of the entire supply
chain need to be considered. This requires input from
various disciplines within the organization (e.g. sales,
production and finance). Build into these scenarios
costs of production, revenues and priorities to steer
your company towards the most profitable plan.
Scenario planning can also help you prioritize the right
products, customers and sales segments according to
your strategic goals. Apart from ensuring that capacity
is used effectively, scenario planning also improves
delivery performance.

22
Predicting demand to prepare for
supply and price fluctuations
Beer ingredients are subject to market
forces beyond the beer industry. Barley is a
global commodity linked to wheat, corn and
soybeans – all subject to weather, alternative
fuels and government policies. The available
supply for the beer industry needs to
compete with demand for animal feed and
ethanol. Is it possible to predict the future
so we are prepared for it? With demand
planning, we say it’s a “yes”.
Accurately anticipating demand improves
customer service, increases sales, and
reduces costs and lead times. That’s why
overcoming the uncertainty of demand
remains the highest priority of today’s
supply chain leaders. By analyzing historical
demand and market intelligence, you can
determine what’s to come and how you can
benefit from it. You can anticipate demand
through statistical forecasting and input from
external indicators. Create multiple demand
scenarios to manage opportunities and risks.
Commodity challenges
Quintiq tip
A planning software with optimization
capabilities automatically revises
forecasts when market conditions
change or new intelligence is received.

23
Pairing sales with operations
Supporting business decisions with S&OP
To achieve your business goals, you need to bridge the gap between sales and
operations. Sales and operations planning (S&OP) draws on your business data
to give you the support and insights to help inform every business decision:
Product mix optimization
How should you schedule
different products with
different formulations, tank
requirements, brewing time
and maturation time? How
do you juggle orders from
existing customers who expect
continued service excellence,
and new customers testing if
you have the means to deliver
what they want, when they
want it? Optimize product
mix at the plant to satisfy
customers in the marketplace.
Responsiveness
Can your operations respond
swiftly to shifts in demand?
If demand from one market
drops, or a new opportunity is
presented, can you reassign
raw materials to avoid wastage
or unwanted inventory? Or do
you have enough capacity to
meet the new demand? An
agile supply chain can respond
to demand fluctuations.
Forecasting
To forecast supply, demand
and costs, you need input
and insights from all
stakeholders, internal and
external. Collaboration
between all links in your
supply chain is essential to
achieve higher accuracy.
Scenario planning
What-if scenarios are critical
for business survival. You
need to be a few steps ahead
to handle any setbacks or
even grab opportunities
that may come. Visibility of
different actions will help
you make the best decisions.
Are you ready for situations
such as these?
• Changes of order due-dates
• Incoming high-
urgency orders
• Machine breakdowns
• Machine capacity constraints
• Material unavailability
Revenue management
Having a spectacular product
does not guarantee impressive
sales figures or profits. You
need to sell the right product
at the right time, at the right
price. If the market is not
ready for your product and you
can’t create a demand for it,
your efforts will go to waste.

24
Opportunities for improvement
Where are you at in your sales and operations planning (S&OP) journey?
Are you harnessing the process effectively enough to achieve your business goals?
Here are key areas for improvement:
Integrated planning
Determine a feasible, optimized
and responsive production plan.
Aim for real-time planning on
a single platform so that all
stakeholders have visibility of
the impact of plans on business
goals. Consolidate plans and
forecasts across functional
domains. Integrate data for
sales and operations, logistics
and workforce planning.
Costs and productivity
Increase resource
efficiency and
throughput; and lower
costs through lean
production planning.
Customer satisfaction
Improve delivery
performance and reduce
lead times. Build reliable
order confirmation.
Inventory management
Work on striking a balance
between having unnecessary
stock taking up space and
having enough stock to meet all
demands. Inventory planning
needs to go hand in hand with
production, sales and logistics.
Did you know?
Quintiq is named by Gartner, Inc. as
2015 Leader in the Magic Quadrant for
both supply chain planning and S&OP.

26
East is not West
Let’s focus on Asia’s growing beer market. The diverse tastes of consumers here
present opportunities and challenges that differ vastly from the mature markets
of the West. Culturally and historically, it is not just countries, but regions within
countries that makes planning complex, if not complicated.
Just look at its cuisine. Chinese food differs on the coast areas and inland, north
and south. In India, the country is made up of 27 states, and sub segments of
these states – each with its own local tastes.
Preferences for different flavors of food translates into demand for beverages of
diverse tastes to complement these flavors. Beverage manufacturers should not
see Asia as a single market. The usual rules of the beverage or beer supply chain
don’t apply here.
Let’s compare China’s beer market to another large country. In the US, beer
companies can get by with producing just a couple of drinks for a huge number
of people. Chinese consumers on the other hand, prefer brews that cater to
local tastes.
As a beer manufacturer considering growth, you can’t enter the Asian market
with a single-formula product. You may need a product for Northern China, its
variant for Southern China, and another one for Western China. A small minority
may be adventurous enough to try foreign brews, but the majority still look for
something familiar to the local palate.
You’ve got the right brew. Now what?
Producing a drink Asian consumers like is half the challenge. The other half is
getting it to them. Logistics in Asia can be a problem. Unlike Europe or North
America, transport with controlled temperature is limited. Expensive to buy,
build and maintain, the temperature-controlled distribution chain has to be
used economically. Tropical weather and hot summers expose products to heat.
Shipping products in unrefrigerated trucks or storing them in the warehouse
over a long period can affect the beer’s alcohol level or even result in spoilage.
What's brewing in the East?26

27
Four out of the ten world’s best-selling beer are
from China. The country’s beer industry is entering
a new era, driven by millennials who make up a
third of the country’s population. They are switching
to imported premium brands, flavored alcoholic
beverages and ciders.
This shift in consumer preference cannot be ignored
as China’s millennials are fast emerging as decision-
makers with increasing purchasing power. Trading up
from local brews, they see imported premium beers
as part of a modern lifestyle and an adventurous
experience. In the first three months of 2015, beer
production in China was down 2.2% but the volume
of imported beer for the same period grew by 80%.
The leading beer imports are from Germany, the
Netherlands and Belgium.
Worth noting is the top German brands sold to
Chinese consumers are increasingly sold through
Internet platforms such as online grocery store
Yihaodian and online retailer JD.com.
JD.com, China's number two online retailer, has
launched the new cross-border e-commerce
platform, JD Worldwide, to provide consumers with
a convenient way to purchase authentic imported
products. It also opens the door for foreign merchants
without an established presence in the country to sell
goods directly to consumers in the world's second
biggest economy. The orders will be delivered directly
to customers, without the typical inconveniences
associated with international shipping, customs and
language issues.
Opportunities in China
What's brewing in the East?

Rabobank predicts strong growth in flavored alcoholic
beverages (FAB) as demand for traditional beer
subsides. In 2014, the Chinese beer industry saw its
first year-on-year volumes decline after 24 years of
growth. Volumes slipped 1% to 12.6bn liters compared
to 2013.
The urban Chinese are also showing more interest
in healthy living. Beer makers can latch onto these
preferences by introducing the sort of specialty drinks
that customers would look for in high-end restaurants
and clubs; as well as ‘craft’ drinks such as fruit-
flavored, low-calorie or low-alcohol brews.
The growth rate for FAB outperformed all other
alcoholic drink categories, with year-on-year growth
of 100%. FAB volumes increased from 1m boxes in
2006 to 10m boxes in 2012, and generated sales of
about USD325m in 2013. This accounted for only
0.02% of retail sales in China’s alcoholic beverages
market in 2013, so there is plenty of room for growth.
Local producers of alcoholic drinks are catching
onto this trend for low alcohol drinks. Baijiu-maker
Wuliangye introduced the 7% ABV Degula range.
It contains 20% baijiu (alcoholic drink made from
fermented sorghum) and 80% fresh juices such as
blueberries, lemons and pomegranate. Yanghe on the
other hand, created a subsidiary to operate FABs and
launched Dew, a range of spirit-based FABs flavored
with peach, lemon and coconut.

Quintiq’s role in the beer industry
Carlsberg China has chosen Quintiq’s integrated business planning
solution. This will enable Carlsberg to have a single, transparent view
of all its 41 breweries across China. The Quintiq software platform
covers Sales & Operations Planning (S&OP), Master Production
Scheduling (MPS) and Detailed Scheduling.
The execution of plans via MPS for stock-level control will be linked
to Detailed Scheduling to optimize productivity. The new solution will
increase visibility and transparency of all planning and scheduling
decisions, from raw materials, brewing, tanks and filling lines to
packaging. Using KPI dashboards, planners will receive support for
faster decision-making process, to control, reduce risks, analyze and
manage change.
Want to have a chat about your business?
If you have a specific planning puzzle you would like us to
solve, or just want to know how far you can take your business
with superior supply chain planning and optimization, get in
touch with us and let’s discuss some plans.

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