Assignment:
Every time a six-pack moves off the shelf, Anheuser-Busch's top-secret nationwide data network, BudNet, knows. BudNet is Anheuser-Busch's secret weapon and one of the reasons that Anheuser's share (by volume) of the $74.4 billion U.S. beer market inched up to 50.1 percent from 48.9 percent in a single year. Dereck Gurden, a sales representative for Sierra Beverage, one of about 700 U.S. distributors that work for Anheuser-Busch, manages an 800-square-mile territory in California's Central Valley. His customers include 7-Eleven, Buy N Save, and dozens of liquor marts and restaurants. When Gurden enters one of his customers' stores he already knows what products are selling, which campaigns are successful, and what needs to be done to help the customer's business. When entering a store, Gurden checks his handheld PC, which displays vital store information.
"First I'll scroll through and check the accounts receivable, make sure everything's current," he says. "Then it'll show me an inventory screen with a four-week history. I can get past sales, package placements-facts and numbers on how much of the sales they did when they had a display in a certain location." Gurden also walks around the store and inputs competitor information into his PC relating to product displays, pricing strategies, and promotions.
HOW BUDNET WORKS Information is entered into BudNet nightly from several thousand beer distributors and sales representatives. The information allows Anheuser-Busch managers to constantly adjust production and fine-tune marketing campaigns. The system works as follows:
1. Sales representatives collect new orders and track competitors' marketing efforts on PDAs and laptops.
2. Distributors compile the information and transmit it daily to Anheuser corporate headquarters.
3. Anheuser brand managers analyze the information and make decisions for distributors.
4. Distributors log on to BudNet to get the latest intelligence.
5. Sales representatives rearrange displays and rotate stock based on the recommendations. Anheuser-Busch uses BudNet's information to constantly change marketing strategies, to design promotions to suit the ethnic makeup of its markets, and as early warning radar that detects where rivals might have an edge. "If Anheuser-Busch loses shelf space in a store in Clarksville, Tennessee, they know it right away," says Joe Thompson, president of Independent Beverage Group, a research and consulting firm.
"They're better at this game than anyone, even Coca-Cola." According to dozens of analysts, beer-industry veterans, and distributor executives, Anheuser has made a deadly accurate science out of determining what beer lovers are buying, as well as when, where, and why. The last time you bought a six-pack of Bud Light at the corner store, Anheuser servers most likely recorded what you paid, when that beer was brewed, whether you purchased it warm or chilled, and whether you could have gotten a better deal down the street. BudNet has not just added efficiency into the beer supply chain; it is changing the dynamics of the industry.
Questions
1. How can an SCM system help a distributor such as Anheuser-Busch make its supply chain more effective and efficient?
2. SCM is experiencing explosive growth. Explain why this statement is true using BudNet as an example.
3. Evaluate BudNet's effect on each of the five factors that are driving SCM success.
4. List and describe the components of a typical supply chain along with its ability to help Budweiser make effective decisions.