A practical decision-making framework for improved demand planning in small to medium-sized wineries

[摘要] ENGLISH ABSTRACT: In recent years, supply chain performance has become a major part of the way in whichcompanies gain competitive advantage and create value for customers. A company's supply chainencompasses the flow of information and products between the supplier's supplier and thecustomer's customer. The processes that direct these flows need to be managed to ensure timelyand perfect execution of orders or services, thereby improving business performance. Theseprocesses have been studied and implemented widely in top performing companies worldwide.In the wine industry, the body of knowledge and literature on wine supply chains, strategy andbusiness aspects are lacking, despite the abundance of literature regarding the production ofwine. Therefore, little is known about the implementation and execution of supply chain practiceswithin the wine industry. Since the South African wine industry is struggling financially, withmany producers making less than a 1% return on investment annually, considering theimprovement of supply chain practices can be beneficial to these producers.Since wine can only be 'manufactured' once a year, the amount of wine necessary to fulfil demandin that year needs to be planned accurately. The production and packaging of wine is expensive,especially in small- and medium-sized wineries where smaller volumes lead to higher unit costs.Undesired surpluses and lost sales opportunities are therefore costly.Record-keeping and planning can improve decision-making and business performance inwineries. A demand-planning framework is developed to provide wineries with a morestructured approach to forecasting, planning and managing demand. This incorporates the valueaddingopportunities present in the wine industry to be exploited by wineries based on theirproduct offering and capabilities. These value-adding opportunities are incorporated intodemand forecasting to develop the demand plan. Given the numerous quantities of stock-keepingunits (SKUs) present in wineries owing to, among other things, different bottle shapes, sizes andlabels, SKU grouping and classification is used to simplify the forecasting process.The framework proposed is developed from literature and the experience of the researcher. It isthen implemented at a medium-sized case study winery in Stellenbosch to evaluate the outcomesof the framework. This is done by using historical sales data of the winery, as well as conductingstructured interviews with the winery management team. The framework objectives are furthervalidated by other wine industry role-players by means of semi-structured interviews. It wasfound that a need exists for structures and processes aimed at improving record-keeping,decision-making and demand planning, which would benefit the wine industry as a whole.The framework implementation at the case study winery proved that the framework is easily implementable and beneficial for record-keeping, decision-making and planning. From the external validation, the industry role-players commended the framework to be feasible, practical, structured, easy to use and holistic. The framework also proved to be adaptable since more than one winery sees the capability and benefit of using the framework. The proposed framework was found to be especially beneficial in generating and tracking data within wineries to repeat past successes and eliminate repeated failures.

[发布机构] Stellenbosch University