Tuesday 25th Oct 2016 - Logistics Manager

Big shake-up

Brewers Scottish Courage and Carlsberg-Tetley are already doing it, and others are set to follow. What is causing such a stir? Pooling. According to mobile asset management company TrenStar UK, all the breweries in the UK are accepting pooling “as a damn good idea”.

TrenStar UK senior vice president and general manager Stuart Facey says: “If your Bass arrives in a Scottish Courage container or a Carlsberg-Tetley container or a Guinness container do you really care? No, as long as the right beer comes out of the right pump, the customer [the drinker] doesn’t see it.”

The introduction of pooling looks set to be a major shake-up in the way breweries handle their supply chains. More importantly, the savings that can be achieved are, says Facey, “ginormous”. He says a brewer can save millions of pounds a year. “If there’s a delivery to a local pub once a week, and maybe three deliveries from three different brewers, how inefficient can you get when there could perhaps be one distribution centre where you store all the various models of makes of beer and you have one trip a week to deliver three beers. That makes so much sense and is blatantly obvious.”

According to Facey, pooling is changing the supply chain. “It’s being much more efficient as the barrel itself is not very exciting. It’s very useful, and very necessary and functional, but it doesn’t add any value to the product.”

TrenStar, part of South African company Trencor, provides a tracking and management service to companies whereby it buys the assets, in this case the barrels, adds radio frequency identification (RFID) technology so that it knows the history of each barrel in the supply chain. The company can also provide the data to the brewer as well. TrenStar then just charges the client on a per use per fill basis.

TrenStar owns some three million kegs in 25 different variations and is totally responsible for ensuring their operation in the supply chain.

Paying £40 for an empty beer barrel may sound reasonably inexpensive but multiply that by 1.9 million times and suddenly it is a different ball game. Once the barrel is full (each can take 88 pints), it becomes even more valuable. So if a brewer has about 500,000 barrels floating around at any one time that is a lot of money. Until recently, if barrels were lost, damaged, at the wrong process stage, still dirty, or at the wrong location, a brewer would just buy more.

Then there is the added problem of the “unofficial supply chain”. Facey explains: “If a barrel was dropped off at pub A and picked up at pub B 40 miles away, the question is why? It may be a legitimate problem, but if several hundred a month are being dropped at pub A and picked up elsewhere, something is not right. That’s costing the brewers a lot of money.”

The pooling concept and use of RFID technology can save brewers a considerable amount of money. Losing track of barrels can cost a major brewer £6-10M annually.

Scottish Courage, for instance, has about 1.9 million barrels at its disposal while Carlsberg-Tetley has around 1.1 million.

TrenStar buys the barrels from brewers. Facey explains: “From a salesman’s perspective, it’s an odd thing that we do? I’m giving money to the customer, which is unusual. But that’s what we do. We own the containers. When the customer wants to have those containers available at their production line, fit for use as and when needed by the client, it’s up to us to make that happen. We will ensure there are 30,000 barrels a day at a customer’s production line if that is what’s needed.”

Facey says there are a huge number of non-productive containers because brewers brew beer, and are not container management people. This means a substantial portion of the millions of barrels in circulation are never actually used, but act as a safety margin. “They can’t afford to run out of barrels. We believe we can do it better than they can, and we take the headache away. They want to brew beer and get market share in terms of beer, not barrels. You or I don’t care what the barrel looks like, or what colour it is, just as long as the beer tastes OK.”

The RFID tagging means TrenStar can measure each barrel using a reader at the end of the production line to say another full barrel has

emerged and must be added to the bill for that week. The system also

enables further monitoring in order to optimise and understand what is

happening with a company’s assets so that certain key points in the

supply chain can be measured – deliveries, collections and when a barrel

has been returned for cleaning and maintenance. Facey says: “Certain

key points in the process are measured, i.e. we zap them, we get a read-

out that this is barrel No. XYZ, it was still two weeks’ ago at 2.30pm on

Thursday and was then shipped out from the brewery at a certain time

and delivered by draymen to so and so two and a half days

later. It was there for two weeks being emptied by the client

and picked up four days later and it has gone back to the yard

for cleaning and maintenance. So you start having a picture

of what’s happening with your assets.”

Also, with neutral looking barrels TrenStar needs to know what is

inside them. Facey says: “You can’t open them and have a smell so the

tag’s quite critical to let you know what’s inside, when was it filled,

what type of beer is in there. So there’s a reason for tagging all the

barrels as further down the line it becomes quite critical. If I asked for

a pint of Carlsberg and got a pint of Carling, it wouldn’t be the end of

the world but if you were in the food industry and it’s supposed to be a nut-based or a non nut-based product and you get it wrong – putting a nut-based product in a non-nut based yogurt – then you have a problem, a legal problem potentially and a health problem.”

Historically, barrels have featured barcodes which, says Facey, are great. But barrels stand out in the rain, get knocked about or get lost. “Also, RFID is very important in terms of collecting information. It adds value to your container because you know what has happened to it. This information is invaluable to us and to the client. And from a barcode, you just can’t get the same stuff. We write to the tag, so the tag knows what it is where as barcoding is just read-only.”

TrenStar plans to use the same concept in other suitable industries. Food containers have exactly the same problem, says Facey. The concept can also be used to deliver parts to vehicle manufacturers’ production lines – TrenStar is already providing brakes to manufacturers in South Africa.

Another area of the supply chain that TrenStar

is looking at is running distribution centres for

customers. Facey says the idea is still at the

discussion stage but “the intention is that we will start to run distribution

centres as TrenStar and do it for customers because we’re independent.

We have no emotions about Carlsberg beer or Scottish Courage beer as a

company. Individually perhaps we do but as a company we don’t.”

l As Logistics Manager went to press, TrenStar was expecting to announce deal with a major UK brewer. That and its existing business would mean it had about 60% of the UK market. n