Consumers love alcohol and other beverages in events, parties, and social gatherings. However, the clients are often not concerned about the efforts that go into producing, shipping, and transporting the product from one place to another. They just want their favorite drink on time! As a drinks business owner or supply chain manager, it is your job to foresee and deal with any kinks in the supply chain that could impair your ability to deliver your clients’ favorite drinks in time. It is actually one of the key elements of a successful drinks business. Here is a comprehensive guide to supply chain management in the drinks business:
Key differences between operations and supply chain management
Not too long ago, most businesses assigned the responsibilities of operations and supply chain management to the same person. However, the current business landscape has revealed a stark difference between the two departments. Operations is merely concerned with converting raw material into a finished product. On the other hand, supply chain management entails sourcing the appropriate raw materials, facilitating their transportation, and ensuring the final product is distributed efficiently.
Why alcohol is a unique product in supply chain management
First and foremost, alcoholic beverages are governed by a strict three-tier distribution system. Remember that each state has varying rules and regulations that could force you to obtain several alcohol transportation permits. The combination of liquid and glass bottles makes spirits and alcohol a delicate and expensive commodity to transport. To make it even more challenging, alcohol also requires a particular temperature-controlled environment during packaging and shipping to maintain its quality. This is why you need a dedicated spirits logistics provider with the know-how of every state’s specific regulation. You can find a 3PL logistics partner well-equipped to handle fragile products with a higher standard of cautious care.
Categories of supply chains
At their core, supply chains link various organizations together. There are two main types of supply chains, namely physical flows and information flows. The former deals with the production of beverages, spirits logistics, and storage. On the other hand, the latter involves behind-the-scenes monitoring control, communication, and planning to ensure the organizations can coordinate product movement from one point to another without any hiccups. Information flow also deals with long-term planning and the formation of lasting relationships.
Challenges in supply chain management of alcohol
The following is a list of issues that have made the production, transportation, and distribution of alcoholic beverages costly for the parties involved.
- High shipping costs
- Insufficient storage space in warehouses
- Delays that cause commodities to expire or get damaged
- Congestion at the ports
- Unexpected changes and disruptions that increase costs
- Greed among carriers
How to overcome the issues in the industry
Unfortunately, you cannot afford to wait for these challenges to resolve themselves. It would be wise to take proactive action and overcome the challenges above in the following ways.
- Plan for increased costs.
- Adjust lead times to accommodate any delays.
- Use air freight to keep the chain moving.
- Search for a better route.
- Get insurance coverage.
- Advocate for carriers to regulate their prices.
Frankly, supply chain management in the drinks business is not easy! Keep in mind that alcohol transport requires a higher level of specialization. Yet it is the core in providing value to your clients to create or maintain a competitive edge in the market. You can work with a third-party wines and spirits provider to help minimize the hurdles and expedite your deliveries.