By Annette Scherf, SAP
What does a Screwdriver, a Bloody Mary and Sex on the Beach have in common? All three are iconic cocktails that contain vodka as a main ingredient. Iconic appeal is also the ambition of Russian Alcohol Siberian Group (ASG), one of the world’s leading vodka manufacturers—and a primary reason why the company started a digital transformation process.
The Recipe to Becoming Russia’s Largest Distillery
Alcohol Siberian Group is a Moscow based spirits manufacturer that produces vodkas, liquors, and bitters. According to ASG, its vodka brand Five Lakes is “the world’s best-selling Russian vodka and has been the leading vodka brand in Russia every year since 2013”. The 2020 Drinks International Annual Vodka Sales rating ranks Five Lakes the 7th vodka brand worldwide well above all the other vodkas from Russia.
All spirits are produced at two distilleries, one in Omsk, Siberia, was established in 1993, and has become one of the largest distilleries in the country. The second distillery was established in 2016 in an ecologically clean area on the banks of the Ruza River west of Moscow. The company also runs its own logistic center in the Moscow region.
Alcohol Siberian Group started as a small vodka manufacturer on the Siberian spirits market and developed rapidly to one of the largest spirits manufacturers in Russia. This was achieved by expanding its product portfolio into additional market segments, in various price ranges and importing further brands of whiskey and gin.
And if this wasn’t enough, in 2017 ASG set itself an ambitious 5-year growth plan that included:
- Increasing production and sales while keeping products at a high quality
- Streamlining cost effectiveness while ensuring the best possible customer experience
Fermenting an IT strategy
While the company’s business was reaching for the stars, its IT system landscape had reached its limits and hindered the company’s aggressive growth goals.
The company’s leaders knew that market leadership could only be achieved by agile responses to the fast-changing market conditions and new customer requirements.
But, ASG couldn’t effectively meet those requirements and was facing a typical scenario many fast-growing companies see: the existing system landscape consisted of a set of various tools, autonomous systems, inconsistent business processes and silos of master data. Legacy tools for planning, production, delivery, and sales had reached their limits.
Distilling a digital transformation to keeping up with the pace of success
The next step was obvious – the company required a digital transformation. Using agile methodologies, Alcohol Siberian Group implemented and has gone live with SAP Integrated Business Planning solutions, such as Response and Supply Planning, SAP Extended Warehouse Management, and SAP S/4HANA Cloud. These solutions operate as key enablers to drive the company’s digital transformation.
“Technologies are the foundation for our fast-growing business,” said Elena Tyabutova, CEO of ASG. “The unified IT platform immensely helps us to enhance decision-making process and increase our efficiency.”
ASG digitalized its end-to-end business processes whilst transitioning to data-driven decision-making. The company standardized and automated workflows, logistics, order processing, supplier engagement, data management, and internal controls. With unified processes and a simplified organizational structure, the company enhanced employee productivity using analytics to steer operational processes and risk management. The outcomes were extraordinary. The company now has:
- Comprehensive transparency and connectivity of business processes through one unified system landscape with a common user experience across the organization’s seven legal entities
- Visibility of product sales by channels, distributors, networks, and retail locations through daily monitoring
- Optimal inventory levels thanks to a streamlined workflow connecting production and procurement plans with the finished goods
- The ability to execute scenario-planning activities
- Standardized and transparent reporting with simultaneous period-end closing thanks to streamlined management, finance accounting, and tax reporting
- Real-time reporting framework to comply with legal requirements for transactions pertaining to alcohol production, tracking, and labelling
The result of this initial digital transformation phase is a rock-solid unified IT platform that ensures high efficiency throughout the Supply Chain and serves as a robust basis for ASG’s further technological journey.
“The implementation of world-class technology innovations from SAP gives us a robust digital backbone to support our strategic goal of becoming the best alcohol business in Russia,” said Lyudmila Morozova, COO at ASG.
To a happy ending story or as the Russians say Nastrovje!