A family owned craft beer brewery needed to scale. And in the course of this business expansion, the organization learned a lot about the ERP evaluation process and ERP selection.
Founded in 1988, Deschutes Brewery is a craft beer manufacturer located in Bend, Oregon. Over the years, the original small brewpub in Bend, Oregon transformed into a growing manufacturing business due to the widespread market acceptance and strong demand of their carefully designed craft beers.
The Deschutes team prides themselves on a sustainable business model, high-end processes and craft production of fine beers. In addition to their two brewpubs in Oregon – one in Bend, the other in Portland – a variety of beers are sold in retail stores and at other food service locations.
Process, Batch Manufacturing
Deschutes Brewery processes are run mostly through process and batch manufacturing flows. In addition to the company’s main manufacturing plant in Bend, Deschutes has multiple off-site warehouses.
The processes involve high volume production of fine beers.
At the time of ERP evaluation, the brewery shipped 350,000 barrels a year – about ¾ bottled and the remaining kegs delivered to 184 distributors. The operation involved 4921 vendors that supported batch recipe management
During this time, the company enjoyed double digit growth which led to tripling the size of their warehouse operations. Deschutes was also in the midst of product diversification by adding merchandise sales in their pubs and through an online marketplace. They also expanded by introducing tasting roums and public tours of their operations.
As the company experienced increasing demand and market expansion, including a growth plan to expand to the East Coast, it was obvious existing standalone systems and legacy ERP technology could not scale to support business growth.
The team was concerned with the limits of the standalone spreadsheets, manual workarounds, and outdated functionality of the legacy ERP system they had leaned on for nearly 19 years.
As an example, staff relied on copious amounts of manual work outside the system to handle scheduling, forecasting, and ordering. There was a heavy reliance on Excel spreadsheets and manual data entry to organize their demand planning and production planning processes.
Thus, they wanted to work as effectively as possible during an ERP evaluation process to select an integrated, modern system to support current business and future growth
While there was a critical business need to standardize and consolidate business systems, the team was concerned that the ERP project did not disrupt production or cause shipping downtime
Smart Approach to the ERP Evaluation Process
Knowing their current systems would not be able to support expansion, and looking to be guided through the process, the team looked to work smart when it came to the ERP selection process. They would need to select a system that would accommodate a multi-plant operation. They did not want to implement a system based on how their organization operated today. Rather, the priority was an ERP system— and related business processes — that would accommodate the demands of their growing company.
Deschutes engaged Ultra’s team of ERP selection consultants in their project to offer a truly independent voice and perspective on the vendors and systems throughout each phase.
Notes Tim Plummer, IT Director, Deschutes Brewery “Some manufacturing industries are less mature from a technology standpoint, and craft brewing is one of them. We needed that independent, external expertise Ultra provides to help guide us through our software selection and business requirements
Deschutes appreciated having a liaison between their team and the vendor, and that Ultra always had in mind Deschutes’ best interests.
Proven Methodology of the ERP Evaluation Process
A significant factor to the overall success of the project is the business process improvement methodology put in place at Deschutes.
More than simply locating a technology solution, a thorough business process improvement approach takes into consideration an analysis of the current state of business processes to uncover any gaps or issues. The process also includes a throrough review of documentation, business requirements, the multiple systems and interfaces that were in place, and an overview of data files in use.
According to Tim Plummer the business process mapping phase of the project was extremely beneficial, “Without a doubt we benefited from the Ultra methodology, as well as Ultra’s attention to the tedious definition and mapping of our current state business processes.” The methodology and its steps changed Deschutes’ view on their operations.
Education was also a key part of the methodology put in place at Deschutes. The team was able to get a sense of industry best practices the leaders in their market have put in place, as well as organization design and change management overview that would help in the ERP project.
Once these phases were put in place, the team then turned attention to the opportunities for success in the desired future state. They clearly defined future state possibilities and requirements, drafted systems architecture and the project charter, and helped the team create business scenario the vendor needs to address during evaluation.
The focus then turned to setting ERP selection criteria which involved:
- Analyzing the software functional fit to the future state business process needs
- Assessing the vendor’s presence and strength in the brewer’s industry
- Assessing the vendor’s technology direction
- Evaluating the vendor’s support ecosystem
- Analyzing total cost of ownership
In all, it was valuable for Deschutes to get a clear sense of the vendor that best fits their business process needs, and who would be a good partner for the next phase of business expansion.
Without a doubt we benefited from the Ultra methodology, as well as Ultra’s attention to the tedious definition and mapping of our current state business processes.” The methodology and its steps changed Deschutes’ view on their operations.
Bottom Line Benefits
After working through this detailed and proven methodology, the Deschutes team was in a better position to move forward on the ERP project.
Specifically, Deschutes benefitted from:
- Improved cross functional collaboration and understanding of current processes
- Identification of the functionality and best practices that otherwise might not have been considered for their future state
- Increased confidence that they selected the best fit ERP for their business
- Improved negotiation and contract results
Overall, the Deschutes team was very well prepared to take on the implementation project… they were fully aware of what they needed to do to be successful.
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