DRINKS UNION: Tactical management

Our company has operated within the environment where competition is especially tough. Beer consumption in the local marker declines but its production shows just an opposite trend. To cope successfully with such environment we were forced to look for and to identify the management tool which would provide sufficient information for a reliable operative management/control. In the course of 2001 we therefore implemented System 21 which however ceased to suffice for the demands of a developing company requiring tactical planning.

Company characteristics

Drinks Union, a.s., was established in 1997. After a relatively short time of its operation it became the fourth largest brewery group in the country, the biggest beer producer financed by the Czech private capital and at the same time the biggest local exporter to the German market. The company incorporates under its umbrella breweries located at Krásné Březno and Velké Březno, Louny and Kutná Hora. It produces beers branded Zlatopramen, Březňák, Louny, Dačický, Lorec and Jarošov. A part of the group is formed also by the division KB LIKER, the third biggest Czech producer of spirits the products of which include e.g. Stará myslivecká.

Prior to BNS installation

The applied information system did not provide sufficient quantity of relevant information on which one could base the weekly evaluation and analysis of variances from the plan and subsequently adopt appropriate measures. The work with data had been moreover lengthy and laborious. This situation complicated any creation of budgets and effective tactical management. At the end of 2002 we therefore invited an open bid for the supplies of a new MIS.

After BNS installation

Bottlenecks preventing tactical management were removed. BNS offers now an integrated view of results achieved in separate corporate areas (namely, sales and financial performance, costs and profitability). It moreover does not overload employees with complicated and lengthy administrative tasks.
We apply also progressive concepts and methods, such as the flexible, variant and continual planning. The analysis of results thus provides us not only with a detailed overview of variances but assists us in discovering their causes too. All that then enables the management to carry out changes with an effective impact on the company business.

What was the decisive point

The Business Navigation System met our main requirement consisting in the integrity of new MIS with the information sources used by us earlier. Its functioning within the globally acknowledged multidimensional, dynamic database OLAP moreover guaranteed the system reliability. An important point was also the comfort offered by the user’s environment MS Excel, which eliminated partial fears felt by the staff because of possible failure to cope with the new tool for tactical planning.

Implementation procedure

BNS installation was preceded by the creation of the Navigation Concept which mapped out all the planning processes in the company and enabled their optimization. Separate modules began to be established in sharp service at the beginning of February 2003. Data from System 21 were interconnected with the data store on platform MS SQL, which enabled their utilization within the installed Business Navigation System applications. They were started gradually, first of all, the Sales, then Finances, Management Profit and Loss Account, Costs, Workers and, at the end, Transport and Energies. The whole implementation process did not take more than three months after approval of the order specifications.

Results:

• BNS installation resulted in standardization of planning and analytical processes in the group. The system is moreover capable simply to navigate thereby individual workers so that they become easier substitutable.
  
• New MIS reduced the administrative load and costs arising in connection with planning earlier.
  
• Evaluation of results in separate corporate areas is integrated and offers a clear picture of subsequent steps in the new plans and forecasts.

RNDr. Milan Hagan, chairman of the Board of Directors:

„To manage means to control. To control means to compare the reality with the plan. To plan means to provide a realistic guideline to implement the targets.
BNS has enabled us effectively to create several variants of approach to the market. Transparency and easy orientation in the plan philosophy with a possibility to compare the achieved reality within the same system provide us with a possibility quickly to check the results of the planned tasks and timely to adopt possible corrections with an awareness of consequences in the company budgets. By BNS implementation we obtained a tool for the quality company management.“