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Heineken Netherlands B.V.: Reengineering IS/IT To Enable Customer – Oriented Supply Chain Management

In June 1993, Jan Janssen, financial manager of Heineken Nether lands B.V. and the person responsible for Information Systems (IS) and Information Technology (IT), and his IS manager, Rob Pietersen, faced the challenge of developing an IS/IT configuration that would add value to the business and support the ongoing transformation of Heineken's supply chain management system. This system was extensive, not only supplying the Dutch home market, but also providing a significant part of the supply to more than 100 export countries served by the Heineken Group. Supply chain management central to enterprise-wide transformation. Management was committed to a process-driven organization, customer service partnerships, 24-hour delivery lead time, major innovations in the transport system, and resulting changes in the way people worked. And Janssen knew that all of these-and more-required fundamental changes in the way this new work was to be supported by information systems and technology. Janssen was convinced that the effective management of information as well as a more appropriate IT infrastructure were critical to achieving Heineken's goals of increased flexibility, greater coordination, and a sharper focus on customer needs. In his mind, the change program initiated in 1990 in the IS/IT area had just been the beginning. Now, he and Pietersen needed to design an information systems and technology backbone that would be flexible enough to evolve with the changing business needs and adapt to continuous changes in technology.

HEINEKEN NETHERLANDS B.V.
Heineken Netherlands B.V. was the principal operating company responsible for operations in Heineken's home market. It also accounted for a significant part of Heineken N.V.'s worldwide exports. Of the 60.4 million hectoliters' of beer produced worldwide under the supervision of the Heineken Group in 1994, a significant portion was produced in the company's two Dutch breweries- Zoeterwoude and `s-Hertogenbosch (Den Bosch). Likewise, 11 percent of the Heineken Group's sales took place in the domestic market, and more than 5400 employees worked for Heineken Netherlands. Supply Chain Management

The supply chain at Heineken Netherlands began with the receipt of the raw materials that went into the brewing process, and continued through packaging, distribution, and delivery. Brewing took six weeks; it began with the malt mixture of barley and ended with the filtering of the beer after fermentation. Depending on the distribution channel, the beer was then packaged in "one-way" or returnable bottles or cans of different sizes and labels, put in kegs, or delivered in bulk. The variety of outlets meant that the company had to manage differences in response time (beer for the domestic market was produced to stock, while exported beer was produced to order) and three distinct distribution channels. While each channel consisted mainly of the same steps from the receipt of raw materials through brewing, they differed greatly in packaging and distribution. Beer could be distributed to either on-premise outlets (hotels, restaurants, and cafes, where it was delivered in kegs or poured directly into cellar beer tanks), off-premise outlets (supermarkets, grocery and liquor stores, where it was sold in a variety of bottle and package sizes for home consumption), or to export markets (export deliveries were made to order). Ongoing Transformation

With key customers requesting faster response times, the development of a process-driven view of Heineken's supply chain activities became critical. The company started the transformation of its supply chain management system by creating customer-service partnerships with its largest domestic customers. The overall objective was to improve the logistics chain dramatically for these customers. In response, delivery lead times were reduced and...
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