HEINEKEN: Balancing local agility and global synergy in supply chain planning

“The Global Planning department at HEINEKEN is involved in developing and rolling out what we call capabilities”, says Blaas. “A capability is a package that includes not just a tool, but also a process, an organizational structure, and so on. For example, we call the completion of supply planning a ‘capability’. HEINEKEN is a fairly decentralized organization, where we often have to roll out such capabilities country by country. I work on the capability side, so my team of 18 people develops, designs, and provides the expertise for the roll-out.” Blaas has been in this role for a year, but has been with HEINEKEN since his university days. The main organizational units within the company operate at country level; these operating companies (‘op-cos’ for short) operate close to the market. Each op-co has its own profit and loss account, and its own management team responsible for supply chain and commerce. “This makes us agile and able to respond quickly, but some things are better viewed across national borders.”

To this end, as Blaas explains, SPOTLight was launched: “With SPOTLight, we want to take a step forward in scenario thinking in our supply chain in Europe. Through the tool, we have introduced a structured process based on a clear definition of how we view opportunities, risks, and scenarios. In this process, an operating company no longer only submits an S&OP volume plan to the region, but also a documented set of risks and opportunities. The region can make selections and thus define scenarios; these scenarios can then be used in the regional planning tool (HUBble) to determine the impact on the supply chain.”

In Europe, with many breweries with overlapping capabilities, it would be nice to benefit from the synergy of the large network, says Blaas, although HEINEKEN is not optimally organized for this. The regional team in Europe launched a large-scale transformation program to future-proof the supply chain. “Within that program, our team has taken on three essential tasks. Over the past two years, Blaas’ team and employees from ORTEC have focused on these three goals:

1. To create visibility and insights on regional level by leveraging the planning models that exist at the op-co level (HUBble)
2. To coordinate the S&OP process (SPOTLight)
3. To perform the tactical planning of packaging materials (SAM).”

For the planning of packaging materials, Blaas and his team had already been looking for a solution at the op-co level. “In digital, we distinguish between three strategic options:

1. The first involves doing something in an ERP system. This is only a good option if the ERP system supports a process without requiring additional functionality to be added – this is called a clean core, but we want to do that as little as possible.
2. The second option is to do something on a platform, a product you can buy almost off the shelf, with the downside that you don’t gain a competitive advantage.
3. The third option is to choose a digital product solution. Regarding material planning, we had already gone through these options. We knew it couldn’t be done in our core ERP system, and we couldn’t find a platform in the market that included both supplier collaboration and managing packaging changes for marketing campaigns. So, it had to be a digital product. That’s how we ended up with ORTEC.”

The project started in December 2021. By April 2022, there was already a digital product. “During this project, it became clear that our solution could also support one of Europe’s ambitions: synergy in the centralization of planning tasks. The project was then more or less adopted by the transformation program. The project for SAM was progressing well, so when we had to select partners for the other two solutions that we envisioned for our part in the European transformation we decided to shortlist ORTEC/AIMMS next to our existing suppliers, even though we hadn’t used them for planning software in operations before, only for network design and strategic issues.”

A clear distinguishing factor for choosing ORTEC, Blaas explains, was speed as well as specific expertise. “We have people who are planning experts, not developers. That’s why we need ORTEC. But ORTEC also helps to turn your ideas into a good problem definition. And there’s a lot of supply chain knowledge. We have that on our side too, but we have less knowledge of structuring data and how to best visualize data and outcomes. You try to guide users of the tool through decisions, and that includes visualization. Visualization was less of a topic for SAM because it is used by specialized material planners who prefer to work in tables. But you also want the supply planning tool HUBble to be presentable to management. It needs to be understandable.”

Supply chain planning is higher on the agenda with the MT, he notes. “The whole discussion about S&OP and its relationship with financial planning plays a role. The market is more volatile; it is harder to predict what countries will sell next year. Especially within the European region, planning is getting even more attention. Due to shorter distances and the open market, there is much more interaction possible between our operations, and it is even clearer that you should not plan as separate islands but as a supply chain. These tools are intended to help make better, and faster decisions. Planning is also partly an enabler to sail closer to the wind. If we look at capacity in Europe, we can do the same with fewer assets. All of this is partly related to sustainability: it is complicated to decarbonize a brewing operation, so we need to focus our investments.”

The people from ORTEC are truly part of the HEINEKEN team, Blaas explains. “Some have been here for over two years; they have moved from one project to another, like a sort of exchange between the three different applications. We are also happy about that. We have a triangle – global function-region-the ORTEC component – that is balanced in most of our developments. For SAM, we recently spent a day with the whole team at ORTEC, to reflect and look ahead. So yes, it feels like one team. I always find it enjoyable when developers think along with users. We also had the good fortune of having some key users who think along with the developers. When that comes together, things can move quickly.”

That took some getting used to at the beginning, he says. “The teamwork went well, but the collaboration between our IT organization, the function, and ORTEC sometimes had some bumps. We’ve gotten much better at it now.” The team primarily delivers customization: “We try to gain an advantage that other companies potentially already have, based on their organizational set-up and IT infrastructure. We still have different ERP systems and planning tools, but want the benefits as if that were not the case. Other companies often first roll out one ERP system and then a planning system on top of that. Such companies are further along in standardization of processes, systems, and data. They often have two layers in the planning system, a regional and a national solver for supply plans. We try to achieve the advantages of that without yet having the basic infrastructure for it. So HEINEKEN is really a unique case.”

When reflecting on the collaboration between HEINEKEN and ORTEC, Sven Oosterhuis, Industry Lead Manufacturing at ORTEC Data Science & Consulting, shares the same experience: What stood out to me was the shared commitment to achieve the same goal. We all felt like we were part of the same team. This created a strong collaborative culture where we tackled challenges together. In the beginning we had to figure out everyone's roles, but eventually, everyone became fully engaged in the project and we were able to move quickly."

"The project provides HEINEKEN with greater oversight and control over their international planning processes," says Sven Oosterhuis, Industry Lead Manufacturing at ORTEC Data Science & Consulting. "Previously, decisions were often made on a country-by-country basis, with limited cross-border communication. With our tool, they can now view available capacity in other countries at the click of a button and take immediate action, leading to a much more efficient use of their production facilities. Moreover, the centralized visibility has established the tool as a foundation for centralized planning, allowing HEINEKEN to build a rich S&OP toolset and respond more flexibly to shifts in demand and supply."

The customization is quite well under control so far. As Jasper Blaas reflects: “In terms of material planning, we are now halfway there. Even outside Europe, major subsidiaries are showing interest in SAM. The S&OP-SPOTlight tool is live in Europe. The countries are so enthusiastic about the central tool that we are going to ensure they can use it themselves per country. That will become a tool that can be used in the local S&OP process. We help the op-cos with that, and we get better data that way. Optimization above op-co level is also live in Europe. We did this in two phases: first visualization, and second optimization. We are now at the point where we will continue with a small project team on HUBble: let’s use it for half a year first. With HUBble, the challenge was not only to standardize the master data but also the transactional data, such as stock levels. These kinds of details often differ between our multiple global planning solutions, and additionally we have countries that still use local, non-standardized planning tools. So it’s quite an achievement that it works now.”

More highlights from the past period: “SPOTlight is lean and was developed super quickly, and we clearly see it adding value in visibility not only of our demand plans but also all risks and opportunities associated with those plans on a regional level. And I am very proud that we got internal approval to do material planning as a custom product two years ago; by now we have ten countries live on the solution. We have set up something great there.”