How Production Forecasting Can Save Your Brewery Money

Basing production forecasts solely on historical volume and recent trends was not good enough for Summit Brewing‘s Stuart Johnson.

“We couldn’t run this business ‘in our heads’ any longer. … [It] was leading to inventory problems,” said the brewery’s Director of Planning, Fulfillment and Systems.

Johnson got involved in forecasting for the brewery in mid-2015 and could immediately see that it needed to change up the approach.

Using technology developed by Halo, called SkuBrain, Summit found a new approach to forecasting that they couldn’t have replicated on their own, including automatically importing VIP depletions, demand forecasting, inventory optimization, and replenishment planning, and improving the speed and accuracy of the brewery’s sales and production forecasting for the brewery that topped 120,000 barrels in 2016.

“The new information generated provides a much deeper analysis of trends to apply the best match going forward,” Johnson said. “We can then layer any sales initiatives on top of that, which gets us to a point of looking up to 12 months out with a higher degree of accuracy.”

That has allowed the Minnesota brewery to dial in packaging and raw materials purchases based on expected finished goods needs.

“That means less dollars tied up in inventory sitting at the brewery,” Johnson said.”I look at this data as part of a puzzle. It was a missing piece that we didn’t have. After including it in the process, I noticed that our accuracy grew to the point where others trusted the forecast again.”

Summit’s operations and sales executives wanted to implement a simple forecasting system that would be able to account for key market variables and save time.

“We’re producing more accurate forecasts and therefore making better decisions with far less manual work.”

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