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Hard to believe that one of the world's most successful producers of wines and spirits didn't have a good way of tracking its ocean shipments. But that was the situation confronting Brown-Forman Corp. back in 2004.
Sherree Hockensmith came over to the transportation department that year. Today, as international transportation manager for imports, exports and customs compliance, she oversees a complex and efficient distribution network that touches some 160 countries.
Nine years ago, the situation was quite different. To keep tabs on product in transit, Brown-Forman was forced to rely on the tracking systems of individual carriers. That meant accessing each website individually. There was no single platform for monitoring shipment status. Nor was the shipper aware of service changes or delays that weren't communicated by the carriers themselves.
Brown-Forman was a big operation, and getting bigger all the time. "Our exports were exploding," says Hockensmith. "Year over year, we were growing between five and 10 percent. We had reached the point where it was really unmanageable."
Given the size and profile of Brown-Forman, the stakes were especially high. Now approaching its 150th birthday, the company produces some of the most popular brands on the market: Jack Daniel's, Southern Comfort, Korbel, Early Times, Old Forester, Sonoma-Cutrer. Net sales in fiscal 2012 reached $3.6bn.
Brown-Forman took its first step toward true ocean-shipment visibility with the use of Excel spreadsheets in 2006. Drawing on data supplied by the carriers, it began tracing its top 10 markets. Soon, that ballooned to 20. Meanwhile, sales growth was outpacing the company's ability to get a handle on its distribution network.
Manual processes weren't getting the job done. Brown-Forman began casting about for a software suite that could aggregate status data and allow for proactive management of ocean shipments. It wanted a central repository that could be accessed by in-house transportation managers, distributors, carriers and freight forwarders. The company had to know whether its planned production and distribution lead times were being executed in the real world. Complicating matters was the highly regulated nature of the alcoholic beverage business. Keeping strict records was essential.
Making the Choice
When it came to picking a software vendor, there weren't that many options from which to choose, recalls Hockensmith. Brown-Forman looked at just three viable candidates, finally settling on Amber Road (then known as Management Dynamics).
Some of Brown-Forman's supply-chain partners were already using Amber Road, so the name was familiar to the company. Hockensmith and her team determined that it was the best fit, based on the need for easy implementation and on-boarding of users, both inside and outside the organization. Moreover, Amber Road already counted some beverage companies among its client base, says Stephanie Miles, the vendor's senior vice president of commercial services.
Nevertheless, the selection process stretched out to nearly two years. "We wanted to do our due diligence," explains Hockensmith. "Brown-Forman doesn't get in a hurry."
Once Amber Road was chosen, the project picked up speed. By the fall of 2008, the initial elements were in place. It was implemented in stages, the first involving half a dozen of Brown-Forman's major ocean carriers, accounting for about 80 percent of its shipment activity. Step one required the creation of a database that could be used to monitor shipments and create reports for future use.
Unlike with some companies, "dirty" data wasn't a problem for Brown-Forman. Hockensmith had an analyst scrutinize the information that was coming from the carriers. Amber Road pitched in to identify any issues that might emerge, such as a carrier upgrading its reporting system and having to adjust electronic data interchange transmissions accordingly. Each piece of data required two unique qualifiers in order to allow it into the system.
Some unsettling truths emerged in the process. Brown-Forman had thought its distributors were taking between three and five days to clear their goods and get them unloaded. In reality, it was sometimes taking them up to 10 days. At last, the company was able to determine when its containers were being released to customers, and when it was getting them back. "It helped us in more ways than we even thought it would," says Hockensmith.
The lesson was clear. "Looking at how we set up the data," Hockensmith says, "what I would recommend to anybody is to really map out your process. Even if you think an event isn't important - don't disregard it."
Keeping Tabs on Carriers
Brown-Forman also learned much more about the actual service levels it was getting from its carriers. When a direct route gets changed, and a shipment is suddenly passing through a relay port, the company knows about it. More recently, it has uncovered the consequences of carriers slowing down their ships to save on fuel. In at least one case, what Brown-Forman thought was a 30-day transit was now taking 33 days. With that information in hand, it could adjust lead times on the order side to ensure that shipments weren't chronically late.
Amber Road gave Brown-Forman more than a system for putting out fires. "It also helps us with our long-term continuous improvement program," says Hockensmith. Now, the company is able to track its containers from production facilities in Lynchburg, Va., and Louisville, Ky., all the way to destination. The information feeds into its risk-management program, as well as providing the basis for carrier scorecards. When it comes time to renegotiate service contracts, Brown-Forman can pull out performance data for any participating carrier.
"It has helped us to secure our supply chain, giving us visibility from beginning to end," says Hockensmith. "We now have tools to slice and dice our data anyway we need to."
Brown-Forman currently has data from some two dozen ocean carriers flowing through the system. The application remains limited to prepaid ocean freight, but there has been talk of expanding it to other modes, such as air, intermodal and truck. "We're now talking internally about what might be our next step," Hockensmith says.
The company feels a sense of urgency. Even in a sluggish economy, it continues to expand sales. In 2004, exports accounted for 24 percent of Brown-Forman's total business. Now, says Hockensmith, it's 51 percent - and the domestic business hasn't declined. Prepaid shipments have increased from approximately 2,000 in 2007 to 4,700 in fiscal 2012.
"We're just growing by leaps and bounds in double digits every year," says Hockensmith. "We need this type of tool to help us manage what we're doing."
Keywords: supply chain, supply chain management, international trade, inventory management, inventory control, global logistics, logistics management, supply chain planning, sourcing solutions, retail supply chain, supply chain risk management
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