A Matter of Speaking
Pernod SA, the French division of Groupe Pernod-Ricard, manufactures the spirits Pastis 51 (the country's third-ranking brand of aperitifs), Pernod, Suze, Soho and Cafe de Paris, and distributes Groupe Pernod-Ricard brands including Seagram's Gin, Martell, Aberlour and Havana Club.
What differentiates Pernod SA from other spirit and wine companies is that it operates under Groupe Pernod-Ricard's decentralized, organizational model. Under this system, the holding company concentrates on overall strategy while leaving most, but not all, field decisions to its subsidiaries.
"We have a good autonomy with our parent company," says Vincent Bonnet, IT project manager for Pernod SA. "But in some cases, like the selection of software packages, we are in a way obliged to follow the Group's recommendations."
This is how the Atlanta-based, collaborative supply chain solutions provider, Logility, found its way overseas and into Pernod's three manufacturing plants, two distribution facilities and 16 depots located throughout France.
A Planning Problem
One year ago, Pernod SA was experiencing excess amounts of global inventory and, in some cases, was burdened with out-of-stocks, says Bonnet. From an operational perspective, Pernod needed to streamline its decision making process to balance inventory across all locations. Essentially, a software package could help reach the company's pre-determined goal of having a global inventory equal to 40 percent of the previous year's level, and reduce the incidence of stock outages.
From a business perspective, "a good reason for selecting a software package was to help us define and put in place a new organization with new rules and responsibilities," says Bonnet, who is also knowledgeable in the logistics side of business. "If you don't have a tool to help your users adapt to a business process change, then you aren't helping them to tackle their new jobs."
Language Stalls Success
Under the recommendation of Groupe Pernod-Ricard, Pernod SA chose Logility Voyager Solutions to help simplify the overall supply chain planning process.
Typically, Logility Voyager Demand Planning calculates the forecast of standard items and communicates the forecast to Logility Voyager Inventory Planning and Replenishment Planning. Then Inventory Planning and Replenishment Planning calculate safety stock for the distribution centers and depots, determine reorder points and establish distribution of orders between Pernod SA locations.
However, there was one major roadblock on Pernod SA and Logility's joined path toward supply chain excellence. Both Logility's tool screens and consultants communicated in English, while not most, but all of Pernod SA users speak and understand only French.
To overcome language and cultural barriers, Logility and Pernod SA brought in translators. "Logility was quite responsive with providing us with a first level of translation," says Bonnet. "We lost some time and energy to language and cultural issues, but everyone involved had the will to overcome the barriers, and Demand Planning and Inventory Planning and Replenishment Planning are alive here today," he continues.
Changing Business Practices
Once Pernod SA had Demand Planning and Inventory Planning and Replenishment Planning up and running in French, the company selected Logility Voyager Manufacturing Planning to help meet goals for centralized production planning and to better synchronize supply with specific market demand.
The adoption of Manufacturing Planning was a Pernod SA-only decision. Whereas this new tool differs from the other solutions in that it cannot help reduce inventory, Pernod SA chose it with the same business objective in mind: It's all about changing the organization, the way people are working and the plants' relationships with logistics.
"We had a strange way of working before. Logistics would request a specified amount of product to be produced at a specified place and date," says Bonnet. "Normally, the plant should produce the requested products a few days in advance to deliver the needed product on time."
Before Manufacturing Planning, however, plants would take it upon themselves to determine whether or not they would fulfill the logistics department's demands. With Logility in place, once plants communicate restraints, there is no reason for them to not fulfill the tool's results.
The Future of Production
Logility Voyager Manufacturing Planning is not up and running yet, but an effective design and prototype were developed in just four months, and go-live is expected this month.
"Logility Voyager Manufacturing Planning will enable us to use our global, demand-based forecasts to create optimal production plans for each plant, and then distribute the plans to each facility for execution," says Bonnet. The key here being that plants will actually produce what is expected.