Pernod Ricard Success Story.Qxd

SUCCESS WITH LOGILITY Pernod Ricard raises spirits with a collaborative supply chain

Pernod Ricard is one of the top three decentralization is a competitive strength “In a short period of time we operators worldwide in wine and spirits, for Pernod Ricard, but at the same time achieved a 15% reduction in with over $3.4 billion in annual sales. creates a complex supply chain. inventory; reduced raw materials Founded in 1975 by the merger of two inventory; improved customer French companies, Pernod Ricard has In addition to distributing its own wines service by increasing product developed one of the richest portfolios of and spirits, each of Pernod Ricard's availability; and enabled a higher brands in the industry through internal companies distributes the wines and degree of visibility and stability growth and ambitious acquisition. In the spirits of other companies within the in several key business processes, global spirits market, Pernod Ricard is conglomerate. Cross selling within Pernod including production line planning number one in Continental Europe, Ricard creates global demand for each of and dry good purchases.” Ireland, Central and South America; its brands without the need for costly Peter Schelvis number two in Asia Pacific; number six in external distribution companies or agents. It Group IT Manager North America; and number two in travel also adds to supply chain complexity. Pernod-Ricard retail. Key brands include Chivas Regal, Seagrams Gin, Wild Turkey, Martell, Demand driven Ramazzotti, Pastis 51 and Jacob's Creek. “We grew by acquisition, so companies like Seagrams used to be a separate A complex supply chain business, with individual systems and By growth through acquisition, Pernod business practices,” says Peter Schelvis, Ricard has become a global conglomeration group IT manager for Pernod Ricard. of nearly 60 companies. Each subsidiary Pernod Ricard had an unstructured, is managed as a profit center, and manual process for product forecasting, makes strategic marketing and field using mainly spreadsheets, pencil and decisions locally, but ultimately reports to paper, and fax machines to gather and Pernod Ricard's holding company in Paris. share information. Because each brand owner, or subsidiary, manages its profit center based upon an in-depth knowledge of its market,

Logility Solution A Closer Look Logility Voyager Solutions™ help Pernod Ricard improve forecast accuracy, reduce supply chain costs, increase inventory turns and maintain high at Pernod Ricard levels of customer service. Voyager Demand Planning enables Pernod Ricard to improve forecast accuracy and share global demand information with its affiliates. Facts Voyager Inventory Planning enables Pernod Ricard to increase inventory Industry: Manufacturer and distributor of wine and spirits turns and reduce safety stocks. Founded: 1975 Voyager Replenishment Planning allows Pernod Ricard to predict future Headquarters: Paris, France customer demand, product and material requirements and the actions Sales: $3.4 billion needed by its suppliers to satisfy those demands. Profile: Pernod Ricard is a global market leader in wine and spirits. Its products are marketed through a network of affiliates Voyager Manufacturing Planning helps Pernod Ricard create production plans under brand names such as Chivas Regal, Seagrams Gin, that support new product introductions, true least-cost, least-change and Wild Turkey, Martell, Ramazzotti, Pastis 51 and Jacob's Creek. inventory limits-across single or multiple plants. The Bottom Line Problem Achieved a 15% reduction in inventory Pernod Ricard needed to improve visibility across its global supply chain to more accurately forecast demand; identify and Reduced raw materials inventory aggregate inventory; and make the most appropriate overall Improved customer service supply chain decisions. Increased product availability Enabled a higher degree of visibility and stability in several business processes, including production line planning and dry good purchases SUCCESS WITH LOGILITY

In addition to tracking demand, Pernod Ricard The initial deployment was complete in less than About needed to track various mandatory regulations in a year at each of the five locations, and Pernod Logility different countries. For instance, some countries Ricard immediately began to see results. “In a Logility is a leading regulate the level of copper sulfate found in wine short period of time we achieved a 15% reduction provider of collaborative and spirits, which is tracked with stock keeping in inventory; reduced raw materials inventory; units (SKUs). So for each product, there are improved customer service by increasing product solutions to several different SKUs based on the specific availability; and enabled a higher degree of visibility optimize the supply contents found in the bottle. “Since each brand and stability in several key business processes, chain. Logility Voyager owner manufactures its own product, as we add including production line planning and dry good Solutions enable more affiliates in countries with different purchases,” says Schelvis. networks of regulations, more SKUs are added for each trading partners, product that will be exported,” explains Schelvis. Pernod Ricard has experienced additional success including suppliers, “Additionally, we have a lead time of only 30 with Logility because of the different views of data manufacturers, distributors days—25 days of which are by sea—which that are available. "Logility offers significant flexibility and retailers to requires significant velocity throughout the entire and allows each team to forecast in its own way," collaborate, integrate Pernod Ricard supply chain.” says Schelvis. Even though the teams are and synchronize forecasting in different ways, they easily view the A consolidated view data as a whole to understand global demand. their planning, When Pernod Ricard purchased Seagrams, the For instance, if the marketing team is having a production and new subsidiary was using Logility Voyager promotion, the logistics team gains visibility as to why logistics operations. Solutions™ to forecast sales and optimize inventory the SKU quantity is higher. Before implementing Voyager Solutions are and customer service. Pernod Ricard immediately Logility, the logistics team had limited visibility to CPFR® compliant, experienced benefits from the information it reasons for an increase in stock. open and scalable, received for Seagram brands-especially data from Asia Pacific and Central America. Based on A toast to the future facilitating even the Seagram's success, Pernod Ricard decided to roll Going forward, Pernod Ricard will use Logility as most complex trading out Voyager Solutions across its affiliates. its corporate standard for forecasting, both partner networks. centrally as well as in its global affiliates. In “Logility provides a consistent format, process, and addition to having a consolidated view of the central repository that gives each brand owner a Pernod Ricard organization, each affiliate can also consolidated view of its products in each market isolate its data for forecasting and planning down to SKU level,” explains Schelvis. promotions and activities locally.

Pernod Ricard started the project with five affili- Learn how Logility ates, knowing that acceptance would be slow in Voyager Solutions its decentralized organization. Implementation has can help your gone smoothly—on time and within budget—and company achieve there is a high level of satisfaction within those success organizations. “The affiliates are now extremely 1-800-762-5207 good reference sites internally, which means the +44 (0) 1932 846060 enterprise-wide roll out will be better received,” www.logility.com notes Schelvis.

Logility Voyager Solutions™ allow global market-driven companies like Logility Voyager Solutions enable you to: Pernod Ricard to increase financial and operational performance. Achieve higher service levels without increased inventory Voyager Demand Planning reconciles Pernod Ricard's demand history, · orders, trends, and other information, producing a comprehensive overview · Optimize inventory levels and increase inventory turns of demand by SKU, customer, and distribution channel. · Integrate and synchronize planning, sourcing and production across a Voyager Inventory Planning helps Pernod Ricard effectively measure decentralized organization the tradeoff of inventory investment and desired customer service levels. · Decrease planning time by as much as 75% Voyager Replenishment Planning allows Pernod Ricard to proactively Maximize promotions using dynamic business models plan for inventory changes, rather than react to them. · Voyager Manufacturing Planning provides Pernod Ricard a consistent planning and scheduling tool across multiple production sites.