Solving Challenges of Wine Distributors

 

Challenges of Wine Distribution (Extended)

Dynavistics understands that wine distribution is challenging and that you have unique needs for a software solution. Encompassing Microsoft Dynamics GP, Dynavistics created a solution to your wine-specific distribution challenges, including:

  • Purchasing and inventory forecasting
  • Inventory management
  • Sales order entry
  • The pick and pack ship cycle
  • Vehicle load planning
  • Government regulations and taxes
  • Stock under bond
  • Lot and batch rotation
  • Demand forecasting based on previous year vintage purchase history
  • Reserved inventory for limited availability vintages or supply
  • Promotional offers and customer-specific pricing
  • Unit of measure flexibility
In this video, we cover some of these challenges in greater detail by providing screenshots and further explanations of each function, including:
  • Duty-paid and under-bond sites
  • Lot and batch numbers
  • Vintages
  • Limited availability
  • Customer-specific/quantity-break/aggregate pricing
  • Catalog-based sales/telesales
  • Beyond base unit of measure/split packs
The wrong wine distribution software makes simple tasks challenging; at Dynavistics, we offer a complete beverage, spirit, and wine distribution software solution for Microsoft Dynamics GP to help you conquer those challenges and grow profitably. Our core beverage, spirit, and wine distribution software provides everything you need to manage:
  • Purchasing
  • Inventory
  • Sales orders
  • Vehicle loading

With the premium solution, you also get delivery and accounts receivable management functionality, giving you an end-to-end technology solution and a significant competitive advantage in the wine industry.

Video Transcript

Challenges of Wine Distribution (Extended)

Hi, and thank you for joining me.  Today's video is about how Dynavistics, partnered with Microsoft Dynamics GP, helps to solve some of the challenges of wine distribution.  In previous videos, we covered these challenges at a high level, but this time we'd like to look at them in a little bit more detail.

An obvious issue of working with alcohol is government regulation and taxation.  Vendors need to know that they can correctly accrue the relevant level of alcohol duty while also:

  • Leaving the stock under-bond until required by a customer
  • And also being able to sell the same item, both, duty-paid to an end customer and at the under-bond price for delivery to another bonded warehouse.

Typically, duty-paid and under-bond would be treated as two separate sites in an inventory system, but the Dynavistics solution allows you to link bond and duty-paid sites so that your sales order department can easily see the total inventory available when taking customer orders.

Wine shipments from suppliers come with a lot or batch number, often referred to as rotation.  Each rotation has its own reference number with a series of dates such as “Use By”, “Best By”, and sometimes “Not Before”.  The challenge for the distributor is ensuring that the stock is issued to the customers in the date order based on the dates of each rotation.  A record is made of which customer received which rotation and, in the event of a product recall, the wholesaler can identify which supplier the batch came from and which customers received the stock from that batch.  Wine is perishable and you need an inventory system that can track detailed lot information and wine rotations to avoid literally pouring wine and profits down the drain.

For fine wines, each year brings a new vintage that might require a new inventory number that will supersede the previous year's vintage.  Although it's a new product, it's reasonable to assume that it will be purchased by the same customers in similar quantities.  The inventory forecasting and buying function in your wine management software needs to:

  • Be aware of the past demand to accurately stock up for new vintage
  • Allow you to link the products so the new product can inherit some or all of the demand history from the previous vintage
  • Ensure from day one your buyer will have sufficient information to make a sensible decision about the purchase order quantity

In this example, the 2016 inherits 90% of the 2015 vintages.

For some wines, availability from the supplier is restricted, which means the wine distributor will need to ration or reserve supply among customers.  Some customers will ask the distributor to reserve a set quantity, which the customers will then draw down over time with firm orders.  As a distributor, your inventory management system needs to:

  • Keep tabs on whether the customer is on track and drawing down his reserved quantity
  • Allow reassignment if the customer is failing to live up to his promise
  • And you can redistribute the reserve quantities to other customers with a more reliable demand

This screen shows which customers have reserves, how much they've taken, and how much is outstanding.

Wine merchants operate in a competitive industry and they need an innovative pricing policy to maintain their competitive edge.  This isn't just reflected in promotional offers and customer specific pricing, but also in other pricing mechanisms such as quantity break pricing and aggregate pricing.  

In some circumstances, the distributor may supply the entire customer’s wine list.  This wine list is the customer’s shopping list.  In a specific ordering section, the customer will wish to place his order in this sequence, referencing his own number or code without having to cross-reference it to the distributor’s code.  This makes it easier for the customer to place his order and improves on customer service.

Wine merchants also require tele-sales sales ordering systems that allow the salesperson to search for wines using criteria that aren't part of the description.  For example, it could be price band, country of origin, or grape variety.  A customer might be looking for a French wine, in the 10 to 15 range, preferably a pino grape.  You must be able to assign the attributes to inventory codes to improve the inventory searching and reduce the risk of losing sales.   

Most wines come in cases of 6 bottles; however, the distributors are more than happy to sell by the bottle.  But what if the customer wants one case and four bottles?  An inventory picking note listing the quantity of 1.6666 cases would be confusing for the picker and probably the customer, too.  In that situation, it would be better to present the documentation as one fourth.

Dynavistics offers a complete beverage, spirit, and wine distribution software solution from Microsoft Dynamics GP to help you conquer these challenges and grow profitability.  Our core beverage, spirit, and wine distribution software provides everything you'll need to manage purchasing, inventory, sales order, and vehicle loading.  The premium solution also includes delivery and accounts receivable management functionality, giving you and your business the end-to-end technology solution and significant competitive advantage in the wine industry.

Thank you so much for watching and have a great day!

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