Plymouth Gin
Englands's oldest gin distillery
Company Overview
£4.3 million turnover, 13 per cent annual revenue growth and a planned increase in production of 700 per cent - all with just twelve full-time employees. It sounds impossible but that’s the reality at Plymouth Gin, a company which has a history going back 200 years before the Pilgrim Fathers set sail from Plymouth harbour.
The Plymouth Gin Blackfriars distillery (the building was a monastery in the early 1400s) is based in the heart of Plymouth’s Barbican district, the oldest part of the town and now a thriving tourist centre. It is believed the Pilgrim Fathers spent their last night in England there in 1620 before making the short walk down to the
harbour to board the Mayflower. As well as producing gin, the site boasts a fabulous visitor centre offering tours of the distillery, a cafébar and a shop selling Plymouth Gin merchandise.
After several years in the doldrums, Plymouth Gin was acquired in 1996 by four entrepreneurial private investors who injected new life into the business. In 2000, a 25 per cent share in the business went to the V&S Group (owners of the Absolut Vodka brand), the prelude to a complete takeover by the Scandinavians in December 2005. The V&S Group, wholly-owned by the Swedish state, is one of the world’s 10 largest spirits companies. It has operations in 12 countries
and approximately 2,200 employees and annual revenues around £700 million. With its superior sales and marketing muscle, the V&S Group is opening up new markets for Plymouth Gin brand, with the United States providing the biggest opportunity for growth.
Distilling the Right Information
Plymouth Gin is a premium gin and has its own ‘appellation contrôlée’ which means the spirit can only be distilled in Plymouth. The distillery was operating well under capacity so an eightfold increase in production is still possible without increasing the number of staff - the distillery employs fewer than 20 people - including the bar and shop staff.
However, with the anticipated increase in demand driving output, the distillery had to upgrade its accounting, production and stock control systems. Prior to V&S acquiring an interest in the company, Plymouth Gin was using Sage line 50 for accounts, while stocks were managed on an Excel spread sheet, with despatches and invoices created in Word; goods received and stock replenishment were managed manually. After an eight-month evaluation process, the distillery implemented a new enterprise resource planning (ERP) and accounting system from Access Supply Chain.
Sue Hawley, Financial Controller, takes up the story,“Our manual systems were adequate when we were distilling once a month but producing a potential million physical cases means we would have to distil twice a day and we needed an MRP system that would work to our forecasts and dictate what stocks we needed to buy, as opposed to relying on human judgement.”
Production at Plymouth is driven by demand from the company’s national distribution centres and supplier orders are placed directly from the MRP system, which also provides Sue with reports to check the value of stocks for accounting purposes. The Access system creates invoices automatically and reduces the stock down.
Whilst the gin has to be distilled in Plymouth, it is bottled in Essex and shipped direct to the distributor. The bottling plant (itself a user of the Access system) feeds batch numbers and lot numbers back into the distillery’s Access system, so traceability is assured - each bottle is assigned a corresponding batch number and date on the label.
Unlike whisky or wine, gin doesn’t have to be aged and can be distilled inside a week. With short lead times (three weeks on average), fixed-length production runs and the ability to increase capacity without increasing staff, many of the benefits from the system are focused on ensuring Stock Keeping Unit (SKU) profitability - as well as its flagship product, the company produces a ‘Navy strength’ gin (57 per cent alcohol by volume (ABV)), sloe gin, damson liqueur and fruit cup.
The distillery buys much of its stock - ingredients and packaging - on an annual basis, so accurate forecasts are crucial to secure volume discounts. It adds orange and lemon peel, orris root, cardamom, angelica and coriander (as well as juniper berries) to the grain spirit and all of these ‘botanicals’ can be stored long term. ‘Dry stocks’ (bottles, cases and labels etc), are purchased by the distillery but held at the bottling plant. Sue comments,“There is very little waste in the distilling process but if there is a 20 per cent increase in the price of cardboard, that’s passed on to us by the manufacturer and we have to account for it. You have to make commercial decisions based on accurate data and accurate forecasts, so you must have complete confidence in the MRP output. The Access system allows us to look at the waste by individual SKU rather than production as a whole, so it’s a much more accurate picture.”
Building Confidence
Because there was no legacy data to import, the Access system was able to go live for the start of the company’s financial year in January.The system was implemented following a 10-step implementation plan and its principle users were trained at the Access Supply Chain training centre. Sue says there were challenges to start with because many of the staff had never worked with a computer before - previously there were only stand-alone PCs at the distillery - and for a while after go-live, the company kept its manual processes, running alongside the Access system. “It was a bit frustrating because it felt like we were implementing the system on top of doing our day job, but it was important everybody was confident in using it. It was important for them to picture how the system was replicating the manual processes, rather than just believing what the computer threw out.” Confidence built as individuals became more aware of their own, new IT skills and Sue says everything has now become much more second nature. “Now we’re really starting to use the system the way it was meant to be used; we’re getting the reports from it we need and it has given people their time back - that’s important as the business grows because it allows them to focus on productive tasks rather than admin.
Personally, it’s saved me a day a month because I don’t feel I have to interrogate the figures as much as I used to - even if the figures don’t look right, you can find the problem right away because the detail is there. The Access system still allows people to exercise their skill and judgement but they know the data they’re working with is accurate.”
Plymouth Gin is now developing use of the Access system to provide internal traceability for Customs and Excise - mandatory for the collection of the duty. Movements of the grain spirit around the distillery are currently recorded via a manual system but Sue is keen to automate the process. “If we are to get 100 per cent from the system we will have to tackle that, it will save us a lot of admin time as the business grows.”
Key Benefits
- MRP system that works to Plymouth Gin’s
forecasts and dictates stock requirements - Supplier orders placed directly from MRP system
- Invoices created and stock adjusted automatically
- Accurate forecasts enable sound commercial
decisions and volume discounts
