Over the years, I’ve had the opportunity to report several times on Southern Glazer’s Wine & Spirits supply chain initiatives.
If you’re not familiar with the company, Southern Glazer’s is one of the largest – if not the largest – distributors of wine and spirits in the world. It is also a leader in it vertical, where the company was among the earliest adopters of high levels of automation in its distribution centers, launched a broader network design with a special facility to aggregate the storage and distribution of SKUs which are ordered in small quantities. Last year, I talked to Bobby Burg, Southern Glazer’s long-time supply chain leader, about the digital transformation efforts he has launched and supply chain’s plans over the next 5 to 10 years. It’s an organization with vision, especially for a customer-centric supply chain.
Recently, I had a chance to talk to Stephanie Silvestre, senior vice president of supply chain at Southern Glazer’s. Among other things, the team that reports to Silvestre is responsible for demand planning, logistics, including inbound, and supply chain analytics along with the procurement of $20 billion worth of inventory. “We negotiate rates with carriers and execute the purchase orders for every case of beverage we buy across the globe,” Silvestre says. “Every step that happens before a case of wine or spirits arrives at a distribution center is our responsibility.” Another executive manages the outbound supply chain, from the distribution centers to the customer; both executives report to Bobby Berg.
Among the current projects for Silvestre’s group is a collaboration with Ryder to reshape the inbound supply chain. The idea is to leverage the volume of freight that Ryder is moving every year for lower costs and better efficiency as well as Ryder’s visibility platform, known as RyderShare, which will give Southern Glazer’s customer service and distribution teams real time visibility into the progress of inbound shipments. Customer service will be able to provide more accurate information to Southern Glazer’s customers about the status of their inventory and distribution teams will be able to do a better job of planning warehouse operations around expected receipt times.
Silvestre says that planning for the project began with Ryder in January 2020, before the pandemic. The two organization already had a relationship – Ryder has been a partner since 1991 on the fleet management side of Southern Glazer’s business – and Ryder had plans to launch the new visibility platform in May 2020.
The catalyst for the project, she says, was “the responsibility we felt to arm our commercial team with information on when inventory will be available. We’re moving 200 million cases a year, and setting customer expectations starts with us.” She adds that part of the job of inbound logistics was something they call “chase the case” internally, or the time-consuming job of trying to figure out where some needed inventory is sitting. Instead, the team wanted to streamline and automate that process. “It’s important that at any given time we can answer the question of where is my purchase order, and where is my case?” she says. “We couldn’t answer those questions with information that’s a few days old.”
Among the goals of the project was to do this in a way that gave Southern Glazer’s the ability not just to access real-time data – RyderShare collects data using ELD data off of the tractors of approved carriers - but to integrate it with existing systems like its forecasting system from Blue Yonder. “All of our systems are tightly integrated to build upon one another,” Silvestre says. “If I can get all this data but I can’t integrate it with the next system, I’m dead in the water.”
Another big question when launching the project was whether to build it – for Southern Glazer’s to develop its own logistics visibility platform – or to buy it by partnering with a partner. “At the start of this, we asked the question of who we want to be,” Silvestre says. “The answer was that we want to focus on marketing, selling and innovation. To recreate what Ryder has already built would not have allowed us the bandwidth to focus on those other priorities.”
How will it work? On the front end, Southern Glazer’s freight will now be pooled with Ryder’s freight to get the best possible rates within expected customer deliveries. Once a PO drops, it is positioned in the RyderShare platform. Once it is ready to ship in the platform, it will be tendered to a list of approved carriers. And, once the load begins to move, the shipment’s progress will be tracked in real time using ELD data. That information is then available to Southern Glazer’s customer service and distribution teams. The system can also provide recommendations for alternate routes to carriers based on traffic flows.
By leveraging Ryder’s shipping volume, there should be cost savings and efficiencies with the movement of Southern Glazer’s inbound freight. More importantly, the ability to provide more accurate real-time customer information reflects the transition of supply chains from a focus on cost as the number one driver to customer-centric supply chains. As Bobby Burg, Southern Glazer’s supply chain leader, told us last summer, it’s not that cost is no longer important, but it’s now number 3 or 4 on the list of priorities. The customer is number 1.