final assignment group project supply chain management

Logistics 15 5.1 Responsibilities 15 5.2 Logistic process affect the supply chain management 15 Part IV: Heineken’s global supply chain management issues and practices 17 1.. Next to ste

INTERNATIONAL SCHOOL

VIETNAM NATIONAL UNIVERSITY, HANOI

Program : VNU Course Title : Supply Chain Management Course Code > INS3021

Class Code > INS3021-02 Lecturer : PhD Tran Cong Thanh Group Number =: Group 5

Company Name_: Heineken

Heineken

Hanoi, December 30", 2022

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Group member

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Contents

Executive Summary 4 Part I: Overview of Heineken supply chain 5

1 Company profile: Heincken 5

2 Introduction to Heineken’s supply chain 6 Part II: Heineken’s supply chain 7

1 Supply chain strategic priorities: 7

2 Order winner and order qualifier: 8 2.1 Order Winner: 8 2.2 Order Qualifier: 9 Part III: Heineken’s supply chain design 11

1 Demand Forecasting 17 1.1 Issues 17 1.2 Objective 17 1.3 Practices 17

2 Inventory Management 18 2.1 Issues 18 2.2 Objectives 18 2.3 Practices 18

3 Sustainability 19 3.1 Issues 19 3.2 Objectives 19 3.3 Practices 19 Part V: Supply chain management rec dations 20

1 Demand Forecasting 20

2 Inventory Management 21

3 Sustainability 21 Part VI: Reference: 22 Part VII: Appendix 26

1 Group work - Self-evaluation 26

2 Slide presentation 32

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Executive Summary

Heineken, which is one of the largest brewers in the world has always strived to bring their values to the consumers and customers, and simultaneously stay true to their motto: “The best beer is brewed in a better world.” This report’s main purpose is to bring a clearer view of Heineken’s supply chain strategic priorities and supply chain design According to Heineken’s strategic priorities, they aim to deliver superior and balanced growth with a greater focus on meeting the needs of consumers and customers Nonetheless, a strong foundation is necessary

if Heineken wants to expand their business, and pursue their mission A well-managed supply chain is an indispensable factor contributing to a strong foundation Heineken as one of the most well-known brewers has alean supply chain, which is globally scaled and mainly focuses

on efficiency with minimal waste, and loss Therefore, Heineken’s supply chain has a really sophisticated design However, during these recent years, with the rise of inflation, Heineken has been facing issues with their supply chain Based on this report, we will demonstrate some recommendations on the relevant issues to help Heineken improve their supply chain

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Part I: Overview of Heineken supply chain

1 Company profile: Heineken

as Heineken's Bierbrouwerij Maatschappij N.V

specialty beers and ciders

190 countries in which their brands are

revenue of 21,941 € million and operating

profit of 4,483 € million (Heineken N.V reports 2021 full-year results)

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2 Introduction to Heineken’s supply chain

According to the Heineken reports (2015), the supply chain structure consists of 6 steps:

At step 1, agriculture including natural ingredients will be taken from the farm The farm is located in New Zealand, where a machine picks grains, barley and hops A steady supply of hops and apples will be secured At the same time, bottles and cans which come from tiers or recycling centers are prepared as well

Next to step 2 and 3, the brewing process of malt from the barley consists of brewing, fermentation, bearing, filtration and packaging steps, which requires critical condition and temperature and days to produce qualified products

At step 4, packing materials are ready once the brewing outcomes are finished as the bottles and cans are outsourced to different countries to get manufactured Cans and bottles are transported by trucks or cargo ships depending on where they come from

During step 5, from the breweries, the beer is transported worldwide to Heineken’s distributors including local and export beer distributors When the purchase orders are placed to their specific distributor, the beers are shipped again by trucks

Lastly, step 6 and 7 finished as Heineken had the stores put purchase orders to the customers and retailers who are able to ship the product to their store Furthermore, the stores are responsible to sell the products to the final target which is the consumers

Agriculture Brewing Packaging Distribution Customer Consumer

materials of beer

Source: the Heineken company

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Part II: Heineken’s supply chain

1 Supply chain strategic priorities:

Heineken’s strategy is that they seek to achieve superior and balanced growth with a stronger emphasis on fulfilling consumer and customer demands (Heineken strategy, 2020) They promote premiumization by expanding beer into flavorful, less bitter, and non-alcoholic varieties The leadership team of Heineken collaborated together with more than 200 employees from around the world last summer to co-create their new strategy, EverGreen, which is a visionary plan to achieve superb and balanced growth and the next stage of the company's development Consider the Evergreen’s features:

Lae lo efficiency, enabling Rl Cao elu technology to createa performance

lead premium reinvestments into UT ry Unified Customer G6 (À40v02c2<)

Source: Heineken’s strategy

EverGreen has 5 pillars:

e The very first one is Growth, in order to continue exceptional top-line growth, Heineken aims to expand the beer category and go beyond it by introducing ciders, seltzers, and other beverages

e The second feature is Cost and Value, to be able to consistently reinvest in ongoing growth, Heineken has to streamline and appropriately scale its cost base and inculcate

a cost-conscious attitude throughout the whole organization

e The third one is Sustainability and Responsibility, while promoting moderation and prudent decision-making, they want to increase the environmental objectives and extend their social sustainability commitments to all OpCos

e The forth one is Digital and Technology, to generate value, Heineken must integrate data into their culture and develop data-driven insights by creating the strongest possible digital links both within the company and with its clients and customers

e The final stage is People and Culture, has a superb people-centric culture, but they also have the chance to promote agile decision-making, continuous learning, and real inclusion with diversity

=> Through these 5 pillars, Heineken will raise the level of customer and consumer closeness They place customers and consumers firmly at the core in order to continuously enhance and enlarge their assortment and footprint Establish new directions for the company while generating long-term benefits for all stakeholders

2 Order winner and order qualifier:

2.1 Order Winner:

Heineken has been recognized as a success in the global market as "the quality was so outstanding that customers chose the premium, imported product even though it was more expensive than local beers” (Cascade, 2021) Heineken has high standards for the quality of their beers from the beginning They specialized in their fermenting process to produce a flavorful beer with a crisp finish that won prizes in Paris and Amsterdam Heineken has maintained a dominant position in the beer business by using a competitive management model

(Brewing at Heineken, 2020)

Barley, hops, and water are the only three primary components of high-quality Heineken products Heineken evolves into the popular beverage everyone knows when their A-yeast is added The distinctive A-Yeast from Heineken is then added, beginning the natural fermentation process that turns sugar into alcohol and CO2 Through this procedure, Heineken generates its distinctive, well-balanced flavor and pursues excellence and perfection in the beer's purity ( Heineken, 2020)

Source: the Heineken company 2.2 Order Qualifier:

e Traditional beers:

Heineken's main competitors are Miller, Fosters, Anheuser Busch, and Molson Coors (Craft,

2021) Regional brands are now even more competitive against one another because to recent global acquisitions

Additionally, during the past ten years, a flood of smaller brewers has entered the market, greatly boosting competition Even though Heineken is one of the major brewers in the world,

it must strive for market share The beer market has a low entry barrier Therefore, Heineken faces a significant threat from prospective new competitors In order to retain competitive benefits in the beer industry, Heineken will be compelled to think about incorporating innovation or uniqueness into their product

(Anheuser Busch)

Heineken $ 24.84B $ 1.23

® Non-alcoholic beers:

A surge in demand over the past decade has prompted several significant beer companies to venture into the alcohol-free market Nevertheless, Heineken still takes part in this product line

as giving consumers a variety of choices with reasonable prices:

Part III: Heineken’s supply chain design

1 Suppliers

Heineken’s relationships with its suppliers are based on lawful, efficient, fair business

practices Its procurement operations are always based on objective standards including price, quality, delivery, product suitability, and purchasing practices when choosing its suppliers In addition to other international suppliers in the United Kingdom, China, and other nations, the majority of its suppliers are located in the United States (Heineken suppliers,2021)

Newcastle Upon Tyne

Birmingham

United Kingdom; Warsaw _ Product:

Description Original Heineken Product

Origin The Netherlands

250ml, 330ml & 500ml Origin: Holland Heineken

Supply Amount

In Cans and Bottles Crate, Carton

-24 Bottles of 250ml per Carton

-26 pallets per Container -91 Cartons per Pallet

-24x250ml bottles, 1x40 feet

full container load -26 pallets x 91 cartons x 24 cans of 250ml Standard load

of 2366 cases per 40 feet, dry

container

-500ml cans Heineken beer 24x250ml bottles 1x40 feet -Full Container Load = 26 pallets x 91 cartons

-Standard load of 2366 Cases

per 40 feet

-Heineken beer 24x330ml bottles: 22 pallets x 84

-Heineken beer cans 24x330ml 23 pallets x 120

trays

-Heineken beer 24x500ml cans 20 pallets x 90 trays x

24 cans of 500ml

Production facility original heineken denmark or south

africa

2 Producers

Four simple ingredients that offer endless possibilities

Barley is a kind of cereal grown worldwide, which is the main raw material used in brewing beer Before the brewing process, the barley grain will be malted, which

determines the color of the beer, and influences the taste and aroma

Hops are the most instigative beer component, with the power to fully change the profile

of a beer The numerous different types offer numerous different flavor possibilities, while also acting as natural preservatives

Water may not be the most instigative of constituents but its significance can not be undervalued — after all, water makes up about 95 of a 5-ABV beer We go to great lengths to insure that it’s sustainably sourced, reused, and purified to the loftiest norms The water used to brew Heineken comes from a natural spring in the vill of Zoeterwoude, Netherlands The spring water is naturally filtered through sandstone, which gives it a unique mineral content

A beer’s magic ingredient is its yeast, which is why they are also such closely guarded secrets for many brewers Yeast will decide whether the beer’s taste is good or bad The famous Heineken A-yeast acts as the gold standard for every yeast we develop

worldwide

Heineken’s original recipe uses a blend of two different hop varietals from the Netherlands, and the same strain of yeast has been used at the brewery since 1873 The malt used in Heineken

is a special type of Dutch malt called “pilsner malt.” This malt is kilned at a lower temperature than other types of malt, which gives it a more delicate flavor (Heineken Beer and Brewing,

-24 bottles per carton -26 pallets per 40 feet -91 cartons x 24 cans

of 250ml per pallet

- 2366 cartons per 40 feet dry container

- 24x250ml bottles Per Carton

- 96 cartons x 24 bottles

- 26 Pallets Per 40

Feett

Shipping Container 20 feets can fully loaded with:

- 2, 240 cartons x 24 cans and bottle (330 ml)

- 1, 520 cartons x 24 cans and bottle (500 ml)

- Heineken Beer can

Marie, 92110 Ile de Pierro France

Heineken beer from - 250ml bottles and

Holland to Austria cans

(Heineken - 24 bottles per carton

Wholeshalers, 2021) - 26 pallets per 40

feett container

- 91 cartons x 24 cans

of 250ml per pallet

4 Customers

fully loaded with:

- 2, 240 cartons x 24 cans and bottle (330 ml)

- 1, 520 cartons x 24 cans and bottle (500 ml)

1100 Manager

Heineken distributes nearly 50 billion liters (13 billion gallons) of beer every time to civic cosmopolises and far-flung destinations around the world (Customer success,2021), and every single bottle must have the same high quality and refreshing taste that beer suckers love Meeting those prospects at a similar tremendous scale requires fine-tuned perfection across all

of Heineken’s processes, from the barley field to the bottling line to the bar top

Further than 300 HEINEKEN brands (Heineken original, Heineken0.0, Heineken Silver) are

bringing great moments to consumers in over 190 countries- from the Americas to Asia- Pacific and from the Middle East to Europe (Our global presence, 2021) Heineken is erecting a continuing presence in arising requests and continuing to evolve our immolation in requests where it always had a strong presence

To succeed, Heineken must connect with their guests bar possessors, retail buyers, distributors,

thirsty consumers, and beyond by erecting flawless digital relations (Heineken strategy,202 1) Achieving this charge demands a forward-allowing approach, especially with the target to have digital B2B platforms regard for 10 billion euros in profit by 2025

5 Logistics

5.1 Responsibilities

+Responsible for managing and developing the Logistics and Warehousing team, gilding, and driving high performance, and ensuring a consistent supply of products to meet customer demand (Logistic analysis,2021)

+Continuous team capability building through coaching of the team to increase autonomy, participation in key planned activities and projects to role model and coach teams

+Proactively develops plans and manages coffers to drive enhancement

+Laboriously leads and titleholders the safety docket, leading safety enhancement conditioning, further strengthening the safety culture and intelligence in the platoon +Manage the Logistics Operations budget icing costs are in line with agreed targets

5.2 Logistic process affect the supply chain management

Presently, further and further companies are starting to apply AI technology to the force chain At Heineken, ServiceNow is used to manage incidents and changes and encourage workers to log all applicable information masterminds at Heineken use an app for

ServiceNow that has been specifically designed for this purpose (Heineken

manufacturing,2021) The functionality of the app is configured in ServiceNow and fully customizable The app allows masterminds to snappily request information from the

ServiceNow platform about incidents and tasks that have been assigned to them They can also use it to upload data to the platform on what they see in the brewery

They can admit guidance through the app when working on a change or incident prints, delineations of designs and Q&A functionality are each available to name many

The app’s users are supported by iBeacons However, any pertinent details about the device or set of devices to which this bulb is connected will be retrieved from ServiceNow and displayed

in the app In addition, due to the lack of connectivity in product installations, the app is designed to serve on its own All computing is done in the ServiceNow pall and no endless connection between the two is demanded the app to serve (Logistic analysis,2021) The ServiceNow platform collects data from all app users, so it has access to a wealth of useful data that may be utilized to prevent downtime and lower overhead expenses For instance, when bottling equipment malfunctions at the brewery, the engineer in charge of that unit are given historical data-based explanations of the incident's potential causes and fixes If this incident keeps happening, root cause analysis is encouraged so that a long-lasting remedy can be

created (Now platform, 2020)

In short, Information that has been gathered in ServiceNow is presented on easily comprehensible dashboards that give a quick overview of the current state of affairs in the supply chain Management will spend less time filling out spreadsheets to manage changes and incidents, and more time analyzing data that helps improve the supply chain With a stable supply chain design, we can see that Heineken has used a lean manufacturing method to utilize the profit in the beer industry