NEW BELGIUM FINDS A NEW WAY TO ‘CRAFT’ A BETTER BEER

From the moment the malted barley and hops arrive, the clock is ticking for New Belgium Brewery, the Fort Collins, CO, based maker of some of the most popular craft beers in America.

With any craft beer – not to mention any number of upstart, consumable products being produced every day across the country – the key to success is freshness. New Belgium has known since its very beginnings in 1991 that the key to winning customers is not only to brew a good beer, but also make sure that beer gets into the glass of its customers within a few weeks of its production.

New Belgium, whose flagship Fat Tire amber ale has helped propel it to the nation’s third largest craft brewery, has never had a problem with freshness. Thanks to a dedicated group of employees – a group that just a few years ago became owners of the company – the complicated process of making more than 700,000 barrels of beer each year was one they worked hard to perfect.

To see that dedication, one need only look at the brewery’s warehouse and

distribution operation. For many years, the bottles that came from the small town of Windsor, CO; the cardboard from California and Colorado; the malt from the U.S., Canada and Europe; and the hops that came mostly from the Pacific NW; were delivered, organized and stored as quickly as possible.

Prior to 2006, the process relied heavily on a few of the key employees who knew where things needed to be.

“We put an expiration date on our beers because we believe that the beer can lose its brewery fresh taste after that time,” the company explains on its website. “We know how exciting it can be to find beer you forgot you had, but after the ‘best before date’, it probably won’t be the delicious New Belgium beer taste that you might expect.”

There was the guy who came in each night to inspect the various shipments and move them around to the “right spot” to make sure things go smoothly the next day.

There was another guy who spent a few hours every morning driving around the warehouse, looking at the “best before” dates on the bottles that had been stacked the day before. He would write down some notes on a white board.

And then the guy who read the notes on that white board and did his best to make sure the beer with the oldest dates would get shipped first.

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Dedicated employees, who kept things mov-ing without a formal Supply Chain system.

But as New Belgium continued to succeed and grow, the question was asked: Was this an efficient way to run the operation?

Like any rapidly growing company want-ing to keep up with demand while main-taining a solid reputation for quality, New Belgium began searching for a bet-ter way to handle the production of Fat Tire and its variety of sister beers: Rang-er IPA, Rampant Imperial IPA, Shift Pale Lager, Sunshine Wheat, 1554 Black La-ger, Blue Paddle Pilsner, Abbey Belgian Ale, Trippel Belgian Style.

There were also the seasonal beers and limited edition beers thrown into the mix at times during the calendar year. And since this is craft beer, which caters to an audience that loves to explore differ-ent flavors, there were the “Folly Packs” of mixed brands in 12-pack containers.

Another looming issue: New Belgium had plans to expand into a second pro-duction facility in Asheville, NC, hiring a brand new workforce that had not “grown up” with the company like those in Fort Collins. In addition, a growing web of health regulations for all craft breweries increasingly demanded more time to ensure full compliance. And then there were the separate financial, pro-duction and warehouse systems that often called for duplicate data entry and manual consolidation for reporting.

In January of 2012, New Belgium turned to Microsoft Dynamics AX and Blue Horseshoe for a comprehensive operational review and implementa-tion of an Enterprise Resource Planning (ERP) system. Blue Horseshoe began an evaluation process that pinpointed the challenges and identified solutions.

Blue Horseshoe determined the best solution was to implement the Micro-soft Dynamics AX 2012 ERP system as a complete platform to streamline and expand New Belgium’s business, in-cluding finance, brewing, bottling and distribution. To further extend function-ality of Dynamics AX, Blue Horseshoe also put in place its Warehousing for AX (WAX) and Transportation for AX (TRAX) systems, both part of the Supply Chain Suite for Dynamics AX, a Microsoft Cer-tified for Dynamics AX (CfMD) product.

Developed by Blue Horseshoe, WAX embeds advanced supply chain capa-bilities into Dynamics AX to significant-ly extend warehousing functionality, while TRAX embeds industry-specific transportation planning and execution functionality. Both systems are embed-ded directly into the business layer of Dynamics AX’s architecture offering identical performance, processing and file structure as Dynamics AX.

“With Warehousing for AX, we cre-ated a more disciplined approach to handling things that came off the truck, such as the cardboard, bot-tles, malt and hops. Yes, everyone seemed to know where it all went, something we call ‘tribal knowl-edge’, but it was not very efficient,” said Terry McDonnell, the original project manager for Blue Horseshoe.

In order to drill down into the issues and find the solution, Blue Horse-shoe’s consulting team led “A-to-Z” business process meetings, where representatives from New Bel-gium’s various departments – from sales order to invoicing – walked through their piece of the system, sharing their challenges and needs.

“It was extremely valuable to have all the functions represented in the room,” said Brendan Beers, Sup-ply Chain Project Manager and 10-year veteran at New Belgium. “There were many moments of revelation where someone said ‘I didn’t realize that what I was do-ing was making your job harder.’ They were very good sessions.” Over the next 11 months, the new sys-tem was put into place and Blue Horse-shoe trained a core group of “system super-users” who served as the leads

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“Our business growth had afforded us wonderful opportunities … and wonderful challenges,” said Jay Richardson, Director of Production and IT at New Belgium. “We’re aiming for greater process effectiveness and efficiencies across our current operations and to be very well positioned for continued future growth and flexibility.”

A NEW DIRECTION

in their functional areas and shared their training with their co-workers. Meanwhile, the Blue Horseshoe team worked closely with everyone to ease into the transition to a new system.

The results have been positive for New Belgium, which has not only improved operations in Fort Collins, but is plan-ning to implement them in Asheville as that plant continues to rise from the ground in the spring of 2015.

New Belgium’s investment in an en-terprise-wide business management system is just the first leg of its journey of continued growth. The company is now in a position to support growth in volume, diversity and geography. They have improved their ability to respond as the craft brewing industry evolves.

The data foundation it now has in place with Microsoft Dynamics AX and Integrated Blue Horseshoe supply chain systems allows them to build the business intelligence to move from being reactive to being proactive.

“Ultimately, the system will allow us to better manage the full supply chain, which flows from the fields all the way to the customer,” said Beers. “At every point in the chain we touch, we will be able to make better decisions on how and when.”

And craft beer fans will continue to enjoy the fresh classic brews that made New Belgium famous, while also looking forward to new recipes and flavors in the future.

THE PAYOFF

WHAT WERE THOSE RESULTS?Faster picking: Using technology, the new system helps direct warehouse employees to precise storage locations as the beer comes off the line, while also systematically select-ing which stored products to move first, picking the beers for distribution in order of expiration. “It cuts down the time that it takes the forklift operators to put away the product as it comes off the production line and it directs the pickers to the right location, making sure they select the right prod-ucts based on FEFO (first-expired, first-out).”

Materials tracking: Individual pallets with the brewing materials are license plated and their locations tracked so production planners can track materials and request trans-fers to keep the production running smoothly.

Manage transfer orders: In addition to simplifying trans-fers between warehouses in the Fort Collins facility, WAX functionality is key to the planning for the new Asheville plant. As a bottling plant only, keg and can SKU’s will be supplied from Fort Collins, so accurate materials planning is critical to the East Coast expansion.

Online distributor support: New Belgium has gone from a very limited number of states for distribution to 358 dis-tributors in 38 states, Sweden and Canada. An online entry system with full integration into AX has simplified the pro-cess for distributors to order Point of Sale materials and au-tomated a previously manual system.

Simplified SKU setup: Craft beer drinkers love new brews! To keep pace with customers thirsty for new products, New Belgium makes and tests small batches of beer in their pi-lot brewery. Previously, adding a new SKU was a time consuming process. But Microsoft Dynamics AX has simplified the process and made it easier for New Belgium to stay ahead of the market.

Complex materials planning automated: For the ad-venturous beer drinkers, New Belgium’s “Folly Pack” is a must have. The 12 packs come with a variety of the craft beers created by New Belgium. Under the old system, the generation of a picking ticket for a Folly Pack was simply not possible. But AX and WAS has automated the complicated balance of materials planning for the Folly Packs.

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