We organised for Mike King to interview JF Hillebrand’s MD David Mawer. Please see the discussion below.

What sort of volumes is Hillebrand responsible for shipping each year?

We handled 268,000 containers in 2009 and this increased to more than 300,000 containers worldwide in 2010.

Do you move much by air?

Air freight is a relatively small sector and not commonly used for beverage logistics owing to cost. However, it does offer extremely fast transit times, allowing access to any wine market in the world in less than a week – vital for urgent orders, exhibition samples, and in helping to avoid stock-out situations.

How do you view the potential for further growth this year?

Tough economic conditions, more competition and higher fuel costs will be challenges faced by everyone involved in global transport, but we are confident our expertise in the wines and spirits market and the specialist services we offer will stand us in good stead. We are seeing growth in demand from Asia and the Middle East for wines from all over the world.

How has the beverage logistics market evolved over the past 10 years, in terms of the demands of retailers and consumers?

We launched Axis, our supply chain software, in 2000, which immediately offered a step change in the amount of information UK importers could access about their wine shipments. We are now rolling out Axis 2, which is accessible to all parties.

It monitors every aspect of the supply chain from vineyard to shelf as well as internal order management processes so it helps customers identify opportunities to improve performance and reduce costs. It offers on-line booking, an almost infinite variety of multiple search and report options, and automatic report scheduling.

Axis drills into the supply chain so customers can see an array of processes, including average order-to-ready times and early to late-delivery status. The system links directly, in real time, into our technology and holds two years of data for each customer. This gives a completely accurate assessment of their total supply chain performance, with fully customisable reports, filters and viewing screens.

Not only can customers filter and view their shipments by 145 categories – everything from country of origin, supplier, importer and type of wine to order reference, customs filing and delivery status – they can also export all data to Excel and create dedicated reports for themselves and their own customers.

How do you persuade beverage suppliers to produce to forecast, rather than order?

Recent research conducted across 71,000 consumers in 21 countries showed that customers have little patience for ‘out-of-stocks’. On average, 56% of customers faced with an out-of-stock convert to an absolute ‘lost sale’ with nearly a third deciding to buy elsewhere. Disturbing statistics no-one can deny, especially if you are the supplier of the out-of-stock product.

One solution is the tactic of holding high inventory levels to overcome this problem. But generally this process is uneconomical, even to the extent that the fix is more expensive than the problem. So it is obvious that the supply chain can play a crucial role in turning a company’s buying and marketing strategies into reality, in terms of the customer experience.

Through adoption of collaborative forecasting, planning and replenishment with all stakeholders within the supply chain, many benefits can be gained for all parties to ensure that only the right amounts of the right products are readily available in the right place at the right time to meet all customers’ demands.

Have you won any new contracts recently?

Waitrose, the food division of retailer John Lewis, has awarded us a three-year contract to manage all its wine and spirits imports into the UK. The decision to extend the use of our supply chain management solution to cover the entire business follows successful implementation across a selection of trade lanes over the past four years.

How does your VinLiner product work and what has been its impact on supply chains?

VinLiner is a multipurpose insulation system, made from an aluminium-coated, woven polyethylene fabric. It is placed in dry containers or over pallets and can reduce the effects that thermal shocks, potential contamination, odours and humidity infiltration may cause to sensitive cargo in transit. VinLiner’s ability to protect products will offer a low-risk solution to the amount of damaged/waste product.

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