Heineken Beer Supply Chain Network

April 4, 2018 Management

The major countries where the Heineken Breweries are located are: 1. Netherlands 2. Burundi 3. Cameroon 4. Congo 5. Egypt 6. Ghana 7. Israel 8. Jordan 9. Lebanon 10. Morocco 11. Namibia 12. Nigeria 13. Rwanda 14. Sierra Leon 15. Cambodia 16. China 17. Indonesia 18. Malaysia 19. New Zealand 20. Papua New Guinea 21. Singapore 22. Thailand 23. Vietnam 24. Argentina 25. Bahamas 26. Brazil 27. Chile 28. Costa Rica 29. Dominican Republic 30. Haiti 31. Jamaica 32. Nicarcagua 33. Panama 34. Saint Lucia 35. Surinam 36. Austria 37. Belgium 38. Bulgeria 39. Croatia 0. Czech Republic 41. Finland 42. France 43. Germany 44. Greece 45. Hungary 46. Ireland 47. Italy 48. Kzakhastan 49. Poland 50. Portugal 51. Romania 52. Russia 53. Slovakia 54. Spain 55. Switzerland The side bar gives most of the companies where Heineken Breweries are located. Some of the most important breweries have been placed in the above world map. Supply Chain for Heineken: Heineken manufactures its beers in the Netherlands. Once an order is placed, the beer shipment is sent to the nearest demand point and delivered via truck to the distributor.

The beer is then sent by the distributor to bars, restaurants, etc. Facilities * Owns 125 breweries in more than 70 countries * Consists of wholly-owned companies, licence agreements, affiliates and strategic partnerships and alliances * Distributors benefit from the reduction in procurement costs as well as smaller inventory, and shorter cycle times. Order * Planning time has been cut from 3 days per month to 45 minutes. Distributors are also able to track their orders via their web * Page and get a much more accurate forecast of their order’s arrival date.

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Inventory * Inventory stored in strategically placed warehouses globally to minimize shipping costs * Identified ‘Reverse Logistics’ as a significant component of the supply chain to take back used bottles from the customers. Specifically, Heineken stuck microchips to the beer bottles to find out how much time it takes for the beer to be delivered from the brewery to the customer and vice-versa. * Use of handheld devices to handle individual employee inventory quotas * Real-time inventory management using HOPS.

Distributors benefit from the reduction in procurement costs as well as smaller inventory, and shorter cycle times; in addition, distributors are also able to track their orders via extranet web Transportation Sourcing * Manufactures its own beer using four basic ingredients i. e. water, malted barley, hops and yeast to manufacture beer * Purchases raw materials, equipment, and other goods and services in order to meet the needs of our customers and consumers. Through our Economic Impact Assessments and Carbon Footprint studies, we know that the impact of our total supply chain far outweighs our direct impact. A few years back, Heineken stuck microchips (different from RFID) in the packaging crates at one of their breweries to figure out how much time they spend in the full logistics loop, from brewery to customer and back again. Information from these microchips showed they had about a million crates more than they really needed, which corresponds to €3. 5 million in wasted capital investment — just at that one brewery. And they have more than 100 breweries altogether. Back-of-the-envelope math says the savings opportunity is upwards of €350 million. Information Provides ‘Remote Location Filing’ that offers electronic paperless entry to multiple ports allowing importers to file clearance documentation from one location * Uses web-based extranet known as HOPS, which introduced a software that was known as Collaborative Planning Forecasting and Replenishment (CPFR). This helped all players in the supply chain with information about sales and forecasting. * Introduced the ‘Beer living lab project’ in collaboration with IBM to help the company with benefits such as transparency, security, less physical inspection by the customs; this also made international trade easier. Uses Customer Relationship Management (CRM) solution to augment sales and distribution channel. Heineken applies standardised and integrated processes using Saps’ ERP implementation. Pricing * Heineken is priced keeping in mind the high-spending segment of adults rather than the youth * Relatively expensive compared to its competitors (E. g. $10/six-pack as opposed to $7/six-pack) * High prices with low volumes due to economic downturn


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