With over half a billion euros in spend to manage across markets in three regions, executing a winning sourcing strategy for Carlsberg Logistics is no mean feat – particularly during times of supply constraints, ‘black swan’ events, and relentless volatility.
In a recent webinar, Carlsberg’s Group Senior Category Manager for Logistics, Koteswara Rao Malipeddi (Koti), spoke about the unique challenges the company has faced in the past few years and how they have leveraged technology including sourcing optimization to overcome many of these obstacles.
Read on for three takeaways from the webinar Brewing Up Success: Carlsberg Logistics Share Sourcing Best Practices or watch it free and on-demand here.
Hops and Hurdles: Carlberg Faced Challenges Head On
Koti explained how external challenges from the broader economy and road transportation markets, as well as internal challenges such as two iterations of organizational structure changes, had impacted Carlsberg.
“COVID caused disruptions in both demand and supply in 2020, then in 2021, there were inflationary pressures and capacity constraints from suppliers,” he said. “In 2022, the EU mobility package, the conflict in Ukraine, and oil price increases led to a spike in costs, creating further challenges for Carlsberg.”
Koti explained that the previous sourcing strategy was specific to each market or country, and the procurement process was inconsistent with the usage of different tools and methodologies.
However, Carlsberg quickly realized the need for improvement to remain competitive amid such volatility and worked towards creating a best-in-class, standard sourcing methodology for sourcing road transportation requirements.
Finding (Probably) The Best Solution for Sourcing Success
Despite the challenges, Carlsberg Logistics’ sourcing strategy has been successful in the past few years. A significant part of this success is attributed to digital transformation, which has been a crucial aspect of their strategy change.
Koti emphasizes that running consolidated tenders in a standardized methodology is not possible without a strong backbone of digital solutions. He explained that the internal challenges they faced provided the perfect opportunity to introduce a tool like Keelvar, explaining to leadership how the tool would pay for itself by generating benefits such as more powerful scenario analysis, saving costs, and time. This made it easier to convince the stakeholders to invest in Keelvar, he noted.
With sourcing tools like Keelvar’s Sourcing Optimizer in tow, Carlsberg was able to better integrate data analysis, visualizations, and market intelligence into their sourcing processes.
Using modern technology – as opposed to the manual processes and spreadsheets they had prior – has enabled Carlsberg to rationalize their supplier base and create a common language across different regions that has helped suppliers and internal teams know what to expect and how things are set up.
Koti explained that the decision-making process is more consistent, and the teams are equipped with the necessary tools and information to make informed decisions. This standardization has also helped reduce the cycle time for getting leadership approvals, which in turn has enabled the team to react faster to changes in the market.
“I think we have been successful in taking this to such a level. We now have standard elements that can be followed for road transportation events, making it much more efficient for the team, and for leadership.”
Brewing Up The Future
Koti’s team is now exploring new areas for improvement, including the inclusion of sustainability dimensions such as Scope 3 emissions within Sourcing Optimizer. This is a crucial step for Carlsberg, as sustainability is becoming an increasingly important factor in their procurement decisions.
Carlsberg Logistics is also exploring the possibility of using Keelvar’s Autonomous Sourcing bots to enable the team to achieve even greater operational efficiency and standardization in their sourcing events while also reducing the workload.
“We are evaluating if we can use the bots on top of Sourcing Optimizer for smaller one-off events that are repeatable in nature."
“That automation is another element that we are looking into at the moment,” added Koti.
Watch the full webinar Brewing Up Success: Carlsberg Logistics Share Sourcing Best Practices on-demand here.