There are many ways a brewery can choose to manage operations. As easy as it may seem to brew great beer and get it in the hands of a consumer, the business side of managing operations is complicated. Brewery manufacturing alone is complicated when you’re working with limited fermenter capacities and raw ingredients, while trying to meet demands and make sure you have enough cash available at the end of the month to continue what you love doing.
17-tab Excel spreadsheets, bookkeeping software, whiteboards and notepads seemed to be the only options not too long ago. Even with these makeshift tools, there are still underlying problems with managing inventory, understanding costs and margins, while making sure you have the right amount of raw ingredients to keep fermenters full. To top it all off, you also have to make sure you are reporting to the TTB what you are doing. Although crafting great quality beer was your primary objective, crafting the operational tools was probably the last thing on your mind.
Breweries look to software solutions to find tools that can help solve the typical problems associated with the growth of a maturing brewery. These problems may appear to be specific but they all stem from the larger underlying problem called a “decentralized business environment”.
The Problems of a “Decentralized Brewery”
Inaccurate Inventory: Inaccurate inventory levels are one of the most common problems we hear about in the craft brewery industry. This is a huge problem for breweries because of the short comings of most bookkeeping software when it comes to handling beer manufacturing. Related Pages: Tracking Beer Inventory from Start to Finish
When you produce beer in batches that are always different, it’s really hard to handle that with “assemblies” in common bookkeeping software because you never get the same result every time.
These “assemblies” would work extremely well if you were assembling widgets in which you use a nut, a bolt and a metal plate every single time. However, beer batches are ALWAYS different because of the many varying factors like the yeast generation, alpha acids color of the grain and even the weather. You are manufacturing beer. It’s the somewhat intangible thing called “craft” that goes into every brew that causes varying results every time. The artform of unique, hand-crafted beer is a double edge sword in that the artform is hard to account for when your inventory levels are constantly shifting.
Breweries end up having to manage this outside of their bookkeeping software in spreadsheets, pen and paper or cheap web applications. This is the challenge of trying to keep your inventory accurate and up to date. Related Articles: “How to Manage Beer Recipes using Brewery Software”
Inadequate Accounting: You can bet that the same frustrations on the inventory side are driving your accounting person crazy. Tracking inventory in bookkeeping software also makes accounting for it all very challenging. You purchase raw ingredients at different prices, consume them in different quantities and produce beer with different yields. As if things weren’t already complicated enough, your costs are also different for each style of beer, each pack type of finished beer and each batch of beer. The effort it takes to try and keep track of all costs would require a staff of accountants. For this reason most breweries simply don’t do it or just guestimate their costs at the end of the month with complex spreadsheets and simple assumptions. Related articles: “QuickBooks for Breweries:Good or Bad?”
Poor Planning: Nobody knows how to plan for your brewery better than you and your team. Yet, there still seems to be an overwhelming need for better planning. This is caused by the lack of readily available information to help production planners do a better job planning. You could be making the best decisions, but if the information you use to make those decisions aren’t accurate, those decisions are only as good as the information you use to make them.
Lacking real-time inventory quantities, demand for orders or expected deliveries of raw materials can really put a wrench in your planning abilities. Even if you have that magical 17-tab spreadsheet to take that information into consideration, you still have to manually update that information every time you begin planning. There’s also the risk that the numbers you’re manually inputting may not be accurate in the first place.
The Solution: “Centralizing” Your Brewery
OrchestratedBEER solves these problems by providing a centralized solution for all of the different functions of a brewery. Your controller, sales manager, brewer, production planner and anyone else at your brewery can all interact in the same centralized solution to gain access to information that was previously kept in what’s known as “information silos”. These information silos are fragmented tools or stored data like bookkeeping software, spreadsheets, web tools, pen and paper, whiteboards and those secret recipes and processes in your or your brewer’s head.
So why does OrchestratedBEER solve these problems?
Information Transparency: Information becomes transparent and accessible to all of the different brewery departments when you bring it into a centralized solution. Your production planner can see what they need to produce or order based off of the demands created by sales orders or sales forecasts entered in by the sales manager. The brewer can see what production is prioritized for them based off of the schedule the production planner has created. Sales managers can see when they can promise beer to distributors and customers based off of when they are planned to be packaged. Your controller can see when they can expect to receive payment based off of the expected delivery dates of future orders. Information transparency eliminates the frequent hunts for Joe brewer for “that one document”, or constant emails and text messages to find out when the IPA will be ready to sell. OrchestratedBEER allows everyone to get the information they need at every level or even receive alerts when certain things occur. Related: “A Centralized System for Running a Brewery“
Process Automation: Processes become automated when every function of your business is using the same application to conduct activities. As purchase orders are received, inventory is automatically made available. As production occurs, raw ingredients automatically decrement and finished goods automatically increment. As finished beer is packaged, inventory is made available to fulfill orders. As deliveries are invoiced, the customer account balance is recognized until payment is received. There is no need for dual entry or keeping information up-to date. OrchestratedBEER does it all for you behind the scenes. Related: “How the Automated Production Process Works”
Automated Accounting: All the purchasing, production and sales occur in the same centralized solution which is built on a robust accounting platform. These means all accounting transactions are automatically created in the system to reflect the operational processes that occurs in real-time. As raw ingredients are consumed in production, a journal entry is automatically created to move the value of those raw ingredients from your raw materials account in your chart of accounts and into a WIP account. As finished beer is produced, a journal entry is automatically created to reflect the value of your finished beer on your balance sheet. A journal entry is created to book the production variance for each production process if there was a difference between what your recipes expected you to use and produce and what was actually used and produced. Related: “Brewery Accounting Simplified: How it Works”
You can run a balance sheet at any time during the day to see how and where your money is sitting on your brewery floor. Run production variance reports to see how production efficiencies or inefficiencies are affecting your bottom line. Track the cost of your beer by style and pack type so that you know what your real margins are for each sale. There is no need for an accounting staff or complicated spreadsheets to calculate costs. OrchestratedBEER does that automatically for you.
There are always alternatives to any product. OrchestratedBEER is the only real solution to your problems, not because it is has a fancy user interface and iPad apps to help you do your job better, but because it also addresses the underlying problems that a majority of craft breweries face every day. These problems originate from a lack of a centralized solution for all to interact.
When looking at alternatives make sure that you understand your problems. Understand the root of your problems and ask yourself if it will solve these problems. You can continue to invest in tools to try to make your problems easier to deal with but until you’ve solved these problems by addressing the underlying root of the problem, you will not have a solution. Don’t end up investing in tools to continue dealing with the same problems. Invest in a solution so that you can eliminate the problem.
OrchestratedBEER is the only solution that addresses the underlying problems and provides centralized functionality to extend to all functions of your brewery. Our staff of 20 dedicated individuals is committed to solving your problems. We all speak craft beer. You are not just relying on one person that may not be around tomorrow to support you, or even a small marketing group at a large software company just trying to get a piece of the pie. With OrchestratedBEER, you are part of a community with a private user group forum of peers who have the same goals and face some of the same challenges.
Don’t just take our word for it – talk to our 130+ brewery customers and 600+ daily software users to hear why they chose OrchestratedBEER.