Craft Beer Industry: Brewing an Intelligent Enterprise

Craft Beer Industry and the Intelligent Enterprise

Image: A pilsner brewed by InsideSAP's Jesse Hopwood

The craft beer industry in Australia is set to reach USD 241.8 million by 2025, growing at a CAGR of 5.30% over the forecast period according to Goldstein Research, a young business consulting and market research firm in the US. The Australia craft beer market growth can be attributed to several factors such as the growing number of breweries, rising consumption of alcoholic drinks, increasing per capita consumer spending, developments in flavors and packaging.

The craft beer industry is revolutionizing into an intelligent enterprise as shown in the near-perfect replica of a craft beer brewery at the recent SAPPHIRE NOW and ASUG Annual Conference. Accounting for over 24 % of the $114 billion U.S. beer market, it is not surprising that the industry is gaining much traction for digital innovation.

In a Forbes article written by Susan Galer, she shared her conversation with Ralf Lehmann, Senior Director, Solution Marketing at SAP, on the innovation and trends in the competitive beer industry.

According to Lehmann, breweries need to differentiate and innovate in response to changing consumer tastes and to be able to compete in a fiercely competitive beer industry. He said:

 “Combining experience X-data with operational O-data provides a holistic view to make informed product improvements, run more efficiently, and create greater value for customers.”

The Intelligent Craft Beer Brewery

Galer shared her tour experience at the recent SAPPHIRE NOW and ASUG Annual Conference with Lehmann where a near-perfect replica of a craft beer brewery was presented. The on-site display was created to represent any company’s Industry 4.0 digital supply chain. The mock-up showcased bright dashboards, busy robots (small and large), and gleaming industrial machinery to show how intelligence integrates product planning and design, assembly, shipping and delivery, maintenance and updates.

Lehmann explained that today, companies are moving from mass production to mass customization. He detailed:

 “Like manufacturers in every industry, beer breweries need connected data to anticipate what customers want to drink so they can quickly adapt recipes for production and delivery. They also need to work closely with startups and partners, bringing technologies like eye tracking, gesture control, and robotics into daily operations.”

The Intelligent Valve

The on-site display highlighted the intelligent valve that was connected to a huge, bubbling, multi-colored water tank, in which each color represents flavor options for craft beer. The valve can mix new ingredients and recipe variations as fast as changing consumer taste trends. It can even go by target population or geography. All these and more were identified using the data from SAP S/4HANA.

“We’re collecting and sending IoT-based data that customers can use for maintenance and repair,” Lehmann shared. “In addition, blockchain technology allows customers to manage quality control for recipes. Customers can prove production compliance with geographical and other regulations and ingredient standards.”

SAP Solutions in Play

SAP Digital Manufacturing Cloud, SAP Intelligent Product Design and SAP Integrated Product Design provide data that are essential in the evolution of product design. As an example, real-time information about evolving consumer drinking habits and brewery operations are made available by leveraging SAP solutions.

The SAP Executive described:

“With a tightly integrated value chain, companies can manufacture and deliver the right products to the right customers at the right time. They can reduce the amount of working capital required to manage inventory, serving customers faster by speeding up the time it takes to source and turn raw materials into targeted finished products, in this case, craft beer.”  

Automated Workflow

The author Galer detailed how an automated workflow has seamlessly integrated the process of getting sales orders to product assembly. It involved AGVs (autonomous guided vehicles) picking components in the warehouse for product assembly at designated workstations. A dashboard brought customer order information to the shop floor, giving production operators a comprehensive view of brewery operations, down to assembly line details. Analyzing data from SAP Digital Manufacturing Insights, a separate screen provided executive decision-makers with a higher-level view of manufacturing operations connected to company strategies and KPIs.

“On the shop floor, it’s much easier to assign and reassign people based on customer orders and unplanned events like employee absences or machine breakdowns. If one production line goes down or components run out, you can quickly shift people and machines to where they can keep production going,” Lehmann explained.

For operators, he said that this allows visibility at every step, avoiding mistakes, increasing traceability and process control. Robotics and digital twins provide real-time information, resulting in speed and efficiency.

Lehmann said that the onsite display had the highest attendee traffic of any show floor exhibit on day one of the conference, a proof that digital supply chains are getting its much-needed attention not only in the craft beer industry but also across other industries.

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