RAMCO ERP SOLUTION FOR BREWERIES White Paper March 2002 Ramco Systems Ltd 64, Sardar Patel Road, Taramani, Chennai - 600 113, INDIA Tel: +91 (44) 235 4510 www.ramco.com
RAMCO ERP SOLUTION FOR BREWERIES 2002 by Ramco Systems Ltd All rights reserved. Published 2002. Restricted Rights The information contained in this document is proprietary and confidential to Ramco Systems Ltd. No part of this document may be reproduced or transmitted in any form or by any means, electronic or mechanica l, including photocopying and recording, for any purpose without the express written permission of Ramco Systems Ltd. This document is subject to change without notice, and Ramco Systems does not warrant that the material contained in this document is error-free. If you find any problems with this document, please report to Ramco Systems in writing. This document contains or may contain statements of future direction concerning possible functionality for Ramco System s software products and technology. All functionality and software products will be available for license and shipment from Ramco Systems only if and when generally commercially available. Ramco Systems disclaims any express or implied commitment to deliver functionality or software unless or until actual shipment of the functionality or software occurs. The statements of possible future direction are for information purposes only and Ramco Systems makes no express or implied commitments or representations concerning the timing and content of any future functionality or releases. Ramco Systems Proprietary and Confidential - 2 -
About the Document This document provides an overview of RAMCO ERP SOLUTION FOR BREWERIES and describes the unique capabilities supporting the solution It is written for an audience that is familiar with ERP and Internet concepts and is intended to provide the reader with a general understanding of Brewery Industry issues. This document contains the following sections: Overview Generic Requirements of the Process Industry Web Transactions Requirements Unique to Breweries Benefit Summary About Ramco Enterprise Applications About Ramco Systems-Global ERP solution provider Overview The brewery industry has been beset by intense competition in recent times. This has led to substantial co st pressures on the manufacturers, forcing companies to produce and market their goods more efficiently, and offer high quality products at competitive prices. To maintain high levels of operational efficiency, many breweries have implemented Integrated IT Solutions to provide the competitive edge. Process Manufacturing, the broad segment that Breweries are a part of, poses several challenges and unique requirements, which need to be readily addressed. In addition to these generic requirements to the proce ss industry, breweries require additional capabilities in several specific areas. Thus, the right solution for breweries must address all these in a native manner. This white paper probes the requirements of the brewery industry and outlines the unique challenges that need to be addressed by ERP solutions. Process Industry Requirements Formula Management Multiple Units of Measure Production Planning & Scheduling Co Products & By Products Lot Control Lot Tracking Shelf Life Management Quality Control / Certificate of Analysis Product Costing Brewery Specific Requirements Track Wholesaler Inventory Demand Forecasting Excise and Sales Tax Compliance Management of Empties Bill on Production / Bill and Hold Alternating Proprietary & Contract Brewing Subcontract Bottling operations BATF Regulatory Reporting FDA & MSDS Regulatory Compliance Ramco Systems Proprietary and Confidential - 3 -
Ramco ERP provides strategic and operational expertise to Customers through higher value brewery specific solutions resulting in perfect-fit for the brewery industry. Ramco s extensive experience and unique capability of flexibility and extendibility is unmatched. Generic Requirements of the Process Industry In this section, we look at the unique challenges that are inherent to the process industry. The suitability of a solution is determined by its ability to address these requirements in a comprehensive manner Formulation The competitive advantage for companies in the process industry stems from the uniqueness of the products manufactured. This is a direct result of the formulations developed (and possibly patented) by the company. Several important requirements arise in this context; in order to maintain and enhance it s standing in the company in the industry. These include: Formula Security Information on Formulations needs to be under strict control, with access to formulae being a security privilege. The ability to grant rights to people at the level of each formula is extremely important. Formula Management The composition of the formulae may need to change from time to time, due to market demands, cost considerations, etc. The ability to revise the formula without losing history information, and switch production from one revision to the next (based on several considerations) is critical. New Product Development New products are developed, either to enhance existing formulations or to research and develop new products that will sell in the market. The ability to track the time, costs, trials and revisions, test results and comments on such projects is critical to building a powerful knowledgebase of formula development history. Ramco ERP offers powerful functionality to manage the entire lifecycle of formulations. Data level security is provided to control access to Ramco Systems Proprietary and Confidential - 4 -
Formulations Access can be granted or denied at the level of each and every formula. The system supports multiple revisions for the same formula, with automatic switchover of production to the new revision based on business rules. All aspects of New Product Development are tracked by the system. Projects are given a unique identification, employees associated to projects, costs are tracked against the project, and complete history including revisions, comments, tests, results, etc. are recorded. Ramco ERP features Formulator a versatile formula development, costing, and laboratory analysis tool. Using this tool, new formulations can be rapidly developed by modifying and mixing existing formulae in various proportions, Drag & Drop of new input materials with the mouse into the new formula being developed. Using the Formulator, you can dynamically scale batch quantities, perform cost calculations and arrive at the desired result in a quick and effective fashion. Lot Tracking Complete traceability from receipt of raw materials through manufacturing and to shipments of finished products is a critical requirement. Complete transparency and analysis of Lots, bi-directional Lot Tracking and the ability to record, store and retrieve the Certificate of Analysis (CoA) of raw materials, Intermediates and finished products is a fundamental requirement. These need to be addressed by the solution in a simple manner. Ramco ERP provides the functionality for proactive, forward and backward traceability. The information that can be readily accessed includes: Customers to whom a given finished product Lot has been shipped Raw materials and the vendor Lot numbers that we used to manufacture a finished product Lot Finished product Lots that have used a given raw material Lot Access to Certificate of Analysis (CoA) for Raw materials and finished products alike Machines, Labor and Accessories used in the manufacture of a finished product Lot. Shelf Life Given the perishable nature of the products, tracking shelf life of products and allocating stocks based on expiration date is necessary for efficient operations. Ramco ERP is designed to track shelf life on all Lot controlled items and automatically suggest a retest. The system automatically holds the stock that has gone past the expiration date, so that such lots are not inadvertently consumed or shipped. The application also supports multiple allocation methods for material issue transactions, including Expiration date based and FIFO. Ramco Systems Proprietary and Confidential - 5 -
Product Costing Accurate determination of the cost of finished products considering materials, labor, activities and overheads is essential to determine the correct profitability levels of various products. The cost of products needs to be re-established on a periodic basis to keep it consistent with current market conditions. Ramco ERP supports ABC Costing techniques to accurately roll-up the cost of the product from the cost of Raw Material, Labor and Activities. The entire process of Cost simulations, Cost Roll-up and inventory revaluation at the new standard cost is supported. Web Transactions Web Customer Ramco ERP is web enabled and helps to reach out to customers, suppliers, employees and other stakeholders. They empower the organization's stakeholders - located anywhere on the globe - with real time information and online transactional capability. While information is provided over the Internet, care should be taken in limiting access only to the information specific to them. Ramco ERP has mutiple product offerings across functions, such as Web - Customer, Web Supplier, Web - Sales Office, Web Maintenance, Web - Employee and Web - Applicant. Key transactions across these functions offered over the Internet combine in a powerful way to provide instantaneous access of information and enable to transact over the Web. Web Supplier Customers need to manage and track the entire order life cycle from product inquiry to billing information. Ramco Web Customer application facilitates instant access of accurate, real time information to customers, order tracking and shipment status, ability to instantly order requirements. This reduces order lead times and customer support cost. Ultimate result is enhanced customer satisfaction owing to improved quality of service. Two-way information flow between the enterprise and the suppliers involves expensive human intervention. So enabling enterprise supply chain collaboration over the Inte rnet is significant. Ramco Web Supplier application empowers closer supplier relationships, by enhancing their visibility in your enterprise. Leaner purchase organization, instant access to information on goods shipment and better management of inventory leads to savings in material costs and reduction of purchase overheads. Ramco Systems Proprietary and Confidential - 6 -
Web Sales Office Mobile and remote sales persons need to manage the entire order-to-cash cycle over the Internet. Ramco Web Sales Office empowers the sales persons with accurate and instant sales information at anytime and from anywhere on the globe, slashes the lead times for product delivery and payments collections, e fficient management of inventory. Apart from these web products, Ramco Web Maintenance, Web employee and Web applicant provide a wealth of benefits including: Online exchange of information between maintenance field crew, planners and managers located at remote locations, greater participation of employees in organizational processes and wider reach to a broad spectrum of prospective employees.. Requirements Unique to Breweries Demand Forecasting The need to manage the inventory at optimum levels is dictated by the perishable nature of the brewery products. Too much of inventory held at a wholesaler warehouse could lead to expiration of products, while too little inventory could mean sudden spikes in demand. The need is to track the inventory level at the level of each and every distributor, so that inventory levels can be managed at the appropriate levels, and sales can be forecasted with reasonable accuracy. Wholesale dealers can update you directly with their inventory numbers at the end of each month through an Internet Browser Interface. This powerful mechanism to collate the inventory levels of wholesalers ensures complete visibility down the supply chain. A sound foundation to forecast demand is provided by tracking various parameters such as past years and months buying history, etc at the level of each wholesaler. Excise and Sales Tax While all Brewed products manufactured and sold in the USA are subject to Excise tax, the quantum of sales tax on the products sold is determined based on the state, type of container, and the strength of alcohol in the product. The Sales tax rules vary from state to state, and the system needs to automatically compute the sales tax, based on rules. Ramco Systems Proprietary and Confidential - 7 -
Ramco ERP pre-packages regulatory reports required for breweries. The application offers provisions to build and manage business rules to automatically determine the incidence of Excise tax, Sales tax, based on state, product group, etc. Management of Empties Dock Scheduling Reuse of empty containers such as Kegs & Bottles is a norm in the industry. Hence, these are not billed for, but a deposit per unit is collected from the customer at the time of shipment. On receipt of empty packaging material, the customer is credited to the extent of returns. Ramco ERP understands the difference between finished products that are sold, and returnable goods that needs to be tracked. The system accepts returns of empty containers and automatically credits the customer to the correct extent. Bill and Hold The transportation for product shipments includes a varie ty of carriers and methods, including customer pick-ups. There is a need to allocate and track time on each of the docks, across these various shipments and carriers. In order to ensure the smooth functioning of the transportation process, Ramco e.applications provides for a dock scheduling process through which time slots on each of the docks can be pre-allocated to a specific shipment or receipt of goods. For all contract and alternating proprietary customers, it is the industry practice to invoice the customer as soon as the product is manufactured. This process is known as Bill and Hold. Warehouse space for storage of the manufactured goods is usually provided as a value addition, and a warehousing fee is charged to the customer. These goods are shipped to the customer on their request. Ramco ERP supports Bill and hold, Tracking such invoiced material at zero cost in your warehouses, and provides for charging a warehousing fee on the customer based on the duration of storage. Regulatory Reporting The brewing process comes under the purview of BATF, with the need to submit regulatory reports on a periodic basis. The brewing premises are subject to periodic inspections by the regulatory authorities to ensure compliance with BATF regulations. Ramco ERP provides standard BATF regulatory reports out of the box, such as Brewers report of operation, BATF 1689 and Excise tax reports. Ramco Systems Proprietary and Confidential - 8 -
Alternating Proprietary & Contract Brewing In scenarios where the company manufactures the brands of other companies, the customer s materials need to be identified and tracked separately. While such goods need to be tracked as part of the inventory system, they should not affect the financial books as the material continues to belong to the customer. The solution offers detailed tracking of raw material, production intermediates and finished product inventories separately for each alternating proprietary customer. The system facilitates in charging a toll-processing and warehousing fee on the customers for the production completed. Planning process The planning process in brewery industry is complex with several factors such as market demand, product age, export demand, contract manufacturing, etc being inputs to the planning process. The sales pattern of beer and other brew products follows a seasonal trend. Forecasting demand can be an intense process due to multiple factors such as market demand, inventory levels of wholesalers, etc., which need to be taken into account. The production process also needs to be planned well in advance, considering the time required for ageing the brew. The manufacturing plan could involve an additional level of complexity if external contractors are used for bottling operations and if you brew for other companies on a contract basis. Ramco ERP offers robust planning and scheduling functionality to handle the complex requirements of breweries. Long term and short term planning can be done for both material and capacity. This fits in well with the operations as brewing capacity is typically scheduled well in advance, while the bottling operations are more dynamic and is scheduled on a short-term basis. The tight integration between the production planning process and materials management makes the material planning cycle smooth. A highly efficient finite scheduling process dynamically creates schedules to meet the production schedules with the available capacities. Ramco Systems Proprietary and Confidential - 9 -
Subcontract Manufacturing operations Subcontracting manufacturing operations, whether in part or in whole, is fundamental to the brewery industry. While subcontracting bottling operations is extremely common, the subcontracting of the brewing operation is not a rare occurrence either. The dual need to track the stock of your customers at your company s premises and the ability to track your stock in the premises of subcontractors is important. Ramco ERP handles the subcontracting processes extremely well, and supports planned and instantaneous decisions to subcontract parts of the production process. In addition, the ability to track materials at subcontractor s premises and the efficiency of subcontracted manufacturing process is also offered. Benefit Summary Ramco ERP is a One-Stop Solution that is ideally suited for breweries, distilleries and beverage wholesalers. This ERP solution comprehensively addresses all business processes specific to the brewery industry such as BATF Reporting, Management of Empties, Wholesaler network management, Lot Traceability, Subcontract and Excise requirements. It is a Proven, Single-Point solution to manage all aspects of brewery operations. About Ramco Enterprise Applications Highlights: Ramco e. Applications is one of the most comprehensive ERP products in the market with a strong value preposition and addresses all facets of your organization. (Refer chart below for more details). Our Tools & Utilities User Defined Screens, Data Drill Downs, Report Writer, Workflow and others provide power in your hands to flex and extend the product, beyond the defined boundaries, with little or no programming knowledge. Add to this, out of the box Web Products such as Web Customer, Web Supplier to deliver e-commerce capabilities makes our solutions extremely powerful. Comprehensive Functionality to the Food & Beverage Industry Integration with Third party products for LIMS, Bar Coding, CRM, EDI and MSDS Built for Microsoft Platform. Product launched by Bill Gates Packages Powerful Tools: Highly Flexible and Extendible Implementation by Principal Quick & simple to implement Ramco Systems Proprietary and Confidential - 10 -
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About Ramco Systems-Global ERP solution provider Ramco Systems is a global provider of enterprise solutions covering Enterprise Applications, e-business, Process and Networking Solutions. Today, we have over 1000 satisfied customers across North America, Europe and Asia-Pacific. Ramco Systems employs over 1700 software professionals and business analysts operating out of 120,000-sq. ft. technology center, additionally 50,000 sq.ft. in Chennai, India and several international offices. Our software development practices are ISO 9001 certified. We are part of the 63- year old Ramco Group one of India s strongest and most respected business groups. Ramco Systems follows a structured, process driven implementation methodology that results in quicker, smoother and cost-effective implementation. The products are comprehensively supported through local help desks in USA, Europe and Asia in addition to a 24-hour Global Help Desk. Ramco Systems Proprietary and Confidential - 12 -
USA Ramco Systems Corporation Crossroads Corporate Center 3150, Brunswick Pike, Suite 100 Lawrenceville, NJ 08648 Tel: +1 (609) 620 4800 Fax: +1 (609) 620 4860 Germany Ramco Systems Lyoner Strasse 14 60528 Frankfurt am Main Germany Tel. : +49 (0) 69 66554485 Fax. : +49 (0) 69 66554100 www.ramcosystems.de Lisle, IL Tel: +1 (630) 795 9400 Fax: +1 (630) 795 9440 Dallas, TX Tel: +1 (972) 789 2962 Fax: +1 (972) 789 2963 Switzerland Ramco Systems Ltd. Lange Gasse 90, Postfach CH - 4020 Basel, Switzerland Tel: +41 (61) 2052525 Fax: +41 (61) 2052590 www.ramco.ch Milpitas, CA Tel: +1 (408) 956 5700 Fax: +1 (408) 956 5711 United Kingdom Ramco Systems Ltd 2, Gayton Road Harrow HA1 2XU Tel: +44 (208) 901 4075 Fax: +44 (208) 901 7553 Singapore Ramco Systems Pte. Ltd. 10, Eunos Road 8 #08-05, Singapore Post Centre Singapore - 408600 Phone + 65 7431513 Fax + 65 7431514 Customer Support Hotline - + 65 7431517 Malaysia Ramco Systems Sdn Bhd Suite 1001, Level 10, Menara PJ, Amcorp Trade Centre, 18, Persiaran Barat, 46050, Petaling Jaya Selangor Darul Ehsan, Kuala Lumpur, Malaysia Tel: +60 (3) 758 8978, 754 4639 Fax: +60 (3) 758 8443 India Ramco Systems Ltd Century Center, III Floor 39, TTK Road, Alwarpet Chennai - 600 018 Tel: +91 (44) 4970886 Fax: +91 (44) 4661022 Ramco Systems Ltd 64, Sardar Patel Road, Taramani Chennai - 600 113, INDIA Tel: +91 (44) 235 4510 Fax: +91 (44) 235 2884 Please visit www.ramco.com or email us at webquery@rsi.ramco.com for further information Ramco Systems Proprietary and Confidential - 13 -