Oliver Wight Integrated Business Planning (IBP) has given Treasury Wine Estates (TWE) newfound visibility and control over its Australian operation, resulting in substantial efficiencies and savings. As a result, the IBP (advanced S&OP) programme is now being rolled out to the rest of the world.
Only nine months in to the Australian IBP programme, TWE experienced real financial benefits. “We were able to spot a supply shortfall in a niche product, which could have been costly,” says Stephen Anders, Director of Global Integrated Business Planning. “Before IBP, this may not have been identified at all, and certainly not as quickly. As a result, we were able to plug the shortfall with 20,000 cases, with a combined gross margin of over AU$500,000.”
Part of the Foster’s group until May this year, TWE is now one of the world’s largest publically owned wine companies. The organisation boasts more than 12,000 hectares of vineyards and has 4,000 staff across 12 countries. It sells 35 million cases of wine each year and has revenues of AU$2 billion. Headquartered in Melbourne, its portfolio features such leading brands as Penfolds, Lindemans, Wolf Bass and Rosemount.
Long lead times are a feature of the wine industry, and delays in communicating demand changes can have substantial financial impact - in the past TWE had incurred write downs on surplus wine of hundreds of millions of dollars. IBP has helped TWE address this by improving communication, integrating business processes and delivering reliability in the numbers, to give the leadership team a holistic view of the business.
TWE has also been able to capitalise on its market-leading position, with better brand and variety analysis. “We now have a range of lenses through which to view our new product pipeline – by innovation type, price point, brand and channel,” says Anders. “We can see if it aligns with our strategy or if there are any gaps,” says Anders.
The programme had backing at the top from the outset and TWE CEO, David Dearie, who put IBP on the agenda as a top business priority, is now backing IBP as ‘the way we will manage our global business’, after seeing the benefits it has brought the Australian organisation.
Anders says that IBP has brought a number of inspiring realisations for the organisation but, he says: “There is no greater ‘light bulb moment’ than getting the business back on plan and energising the management team...that is a sign of IBP’s success.”
About Oliver Wight
Oliver Wight (oliverwight-ap.com) has a 40 year track record of delivering business improvement to some of the world’s best-known organisations. With a team of professionals offering a wealth of experience, Oliver Wight is the largest consultancy of its type, with offices throughout Europe, South Africa, North and South America, and the Asia Pacific region. We believe that sustainable business improvement can’t be delivered by external consultants but only by our clients’ own people, so unlike other consultancy firms, we transfer our knowledge to them, helping deliver performance levels and financial results that last.