ABOUT C&C GROUP
Ireland and UK-based C&C Group is a leading manufacturer, marketer and distributor of alcoholic drink brands, specialising in beers and ciders. Originating in Dublin, C&C has quickly become one of the UK’s largest drinks firms, with annual revenues of just under half a billion euros. The company’s flagship brand, Magners Cider, is sold around the world, reaching markets as far as New Zealand, Hong Kong, Canada and Japan.
In 2010, C&C completed a deal to buy the Gaymer Cider Company – which includes the Blackthorn, Olde English and Gaymers brands – from Constellation Brands. This followed the acquisition of the Tennent Caledonian Breweries business from AB InBev the previous year, and completed a major strategic expansion of C&C’s operation in the UK and internationally.
THE C&C GROUP CHALLENGE
Buying both the Gaymer Cider Company and Tennent Caledonian Breweries was a major coup for C&C Group, but it did leave the cider giant with a complex distribution operation badly in need of consolidation. Having previously managed the distribution of Magners products from one manufacturing centre – the Magners cider mill in Clonmell – C&C was suddenly faced with the challenge of managing three complex and disparate operations, each using varying systems, practices and procedures to get its products to market.
The main challenge facing C&C was the disparity between each business’ route to market. The three production centres are a significant distance from each other: Magners is produced in southern Republic of Ireland; Tennent’s in Scotland, near Glasgow; and Gaymers in Shepton Mallet, south of Bristol.
Geographical spread was not the only logistical challenge facing C&C. The three businesses essentially had a completely different route to market, with different wholesale distributors in different parts of the country and different companies getting the products from A to B. Customers for each business were also served by separate call centres and, most crucially, Gaymers, Tennent’s and Magners each used different warehousing systems, and therefore had different methods and programmes for tracking orders. Gordon Bell, Head of Supply Chain Services, explains:
“What we basically had was three businesses that, while similar in offering and target market, had completely different ways to get products out to customers. As soon as the acquisition was complete we knew that consolidation would be the number one priority, and decided to appoint a single UK logistics partner to help us to manage this challenging period of transition.”
THE DOWNTON SOLUTION
After the acquisition was complete, C&C began a thorough assessment process to identify potential logistics partners. Having previously worked for Constellation Brands and handled distribution for the Gaymers brand, Downton was chosen as the sole logistics partner for C&C in the UK. Working with C&C, Downton’s priority task was to find ways to consolidate the UK operation and create a single route to market for the three brands. The first step was to establish a focal point through which all distribution operations could be routed.
Using a warehouse facility in Avonmouth – inherited from the Gaymers business and housing around 350,000 sq ft of storage space – Downton and C&C set up a new hub for UK logistics: the National Distribution Centre (NDC). Whether coming from Clonmell, Bristol or Glasgow, all of C&C’s products would be stored at the NDC before being transported to its end location by Downton’s trucks. At the same time, the three call centres that initially served the three businesses were consolidated into a single call centre, which would handle enquiries for all three product ranges.
Bell says: “The problem with outsourcing logistics is that businesses often think they can ‘shop out’ their distribution operation to a third party then wash their hands of the whole thing – but that simply doesn’t work. It needs to be a team effort, where both parties are willing to give everything to make it work.
“Right from the off, Downton have been true team players – they worked closely with us to determine what our options were, identify a solution, then gave it their all to make it a success.”
GOING THE EXTRA MILE
Although the newly created NDC gave C&C’s logistics operation much needed structure, the issue remained that each of the three businesses used completely different warehouse management systems. At first, C&C investigated merging the new businesses onto the system already being used by the Magners side of the business. However it quickly became clear that there were simply too many elements to be incorporated, and the Magners legacy system did not have the capacity or the flexibility to merge with the other systems used by Gaymers and Tennent’s.
Working with Downton, C&C set up a project team, based at Avonmouth, which had the specific remit of finding a solution. Downton seconded three full time staff to the project team, who joined two directors and four IT experts from C&C, along with a small team of consultants from Deloitte. Recognising that the only solution would be to design a new, bespoke warehouse IT system for the UK operation, the project team began comprehensively mapping what existed in the three constituent businesses, what their systems lacked, and what the ideal solution would be able to do.
Together, Downton, C&C and Deloitte designed from scratch an entirely new warehouse management system for the entire UK business. They then set about finding a provider to deliver it. Having selected Colemans, an Irish IT firm, as the provider for the new system, C&C and Downton worked with their implementation team to deliver the project. A team from Colemans joined the project team in Avonmouth and, within six months, had created a new warehouse management system and implemented it across all sites in the UK.
As a direct result of the project, C&C has been able to reduce order-to-delivery times from three to two days. This has led to significant, long-term benefits in everything from increased order capacity to reduced labour costs. Crucially, the creation of the National Distribution Centre and consolidation of distribution pathways has also reduced the distance travelled by Downton’s delivery vehicles, providing significant savings on fuel costs and reducing the carbon footprint of both C&C and Downton.
Thanks to the bespoke IT system, C&C has also achieved remarkable space efficiencies at the NDC, on average utilising around 90% of available space – a figure which far exceeds that of most warehousing facilities. As a result, around 15,000 pallets worth of space has been freed up at the NDC.
Bell concludes: “Any acquisition programme brings with it operational challenges and this was certainly no exception. However, with Downton’s knowledge and expertise in distribution management alongside us, we were able to take a complex problem, solve it, and actually improve efficiencies across the business.