1. Golden Valley Operations – Supply Chain Model MillerCoors Company
University of Colorado Presentation
Jack Buffington
March 31, 2009

2. About MillerCoors…
New MillerCoors operations is a 8 brewery network across the U.S.
Coors has 2 breweries, including the world’s largest brewery in Golden, Colorado.
Miller has 6 breweries, including its home brewery in Milwaukee, Wisconsin
Significant cost savings ($500mm) a year through network optimization of its breweries and brand families, plus non Supply Chain related savings. Combined company revenue of $6.6 billion.

3. Problem of the Past: Golden Brewery Design – Our Supply Chain Design (the “V” Curve, but not really…)
Golden Brewery’s “V” Curve
“V” Curve is intended to be a strategic supply chain design for Coors
Goal is for Brewing & Logistics to have some capacity than Packaging (thus a “V”)
Supply Chain wasn’t in a “V” format, so capacity was lost/costs were higher.
Supply Chain Issue: Transform Supply Chain to fix “V” Curve
Brewing Process
(22mm bbl’s a year)
Logistics Process
(15mm bbl’s a year)
Packaging Process
(20mm bbl’s a year)

4. Step #1: Enterprise Resource Process (ERP) Project (“Cornerstone”)
Planning Process
Demand Planning
Sales & Operations Planning
Use of APO (SAP’s tool)
Order Management
Over 500 distributor orders
Order this week, ship next
Web-based order system
ERP System
SAP
Planning & Execution tools
Some specialty tools included
End to end connectivity
Plant Scheduling Process
Build Packaging Line Schedule
Sales & Operations Planning
Use of APO (SAP’s tool)
Move to Execution Week
Load Building Process
TMS to Orders
Match Plant Schedule, Orders, and TMS
Send Planned Loads to Distributors
Order Fulfillment

5. Step #2: Process Rationalization
Process Mapping – “As-Is”
Formal process mapping tool to establish current state “People/Process/Technology”
Different levels of process mapping (high level to detailed levels)
Logical data flows for systems & tie to process maps
Process Mapping – “To-Be”
Conclusion: We have lost capacity and higher costs (we need to do something)
“How should it look?”
Brewing capacity “is what it is”
Packaging capacity can improve, but Logistics is the issue
Conclusion of Process Mapping: we must do something about Logistics

6. Step #3: Golden Valley Logistics Strategy
Scope of Golden Valley Logistics
Goal of Golden Valley Logistics (enable Packaging to achieve capacity – not being done)
Two warehouses (Plant Warehouse & Distribution Center run by Third Party)
Truck Operation (on property moves = to 30 trucks full time, 24 hours a day)
Rail Operations (on property moves = 3 full time locomotives on property, 24 hrs a day)
Transload Operations (managing shipping materials, kegs, pallets, etc.)
Maintenance & Field Operations
Strategic Focus
Improve capacity of Golden Valley thru Logistics (increase logistics capacity)
Reduce Logistics cost
Develop capacity and cost solutions given process/technology requirements
Question: Can we do both at the same time?

7. Step #4: Warehouse Automation & Outsourcing
Needed something to break the chain: happens through Warehouse Automation
Semi-automation of Distribution Center to “break the chain”
Automation enabled in DC: Cost/Capacity improvements possible.
Third Party Logistics (3PL) Strategy
Replace 3PL for Distribution Center: costs decrease 225% and capacity increases by 50%.
Outsource truck operations: cost and capacity improve by over 50%
Outsource rail operations: cost and capacity improve by 25%
Moral of the story: Productivity (cost & capacity) is enabled by
process improvements, not by technology alone.

8. Golden Brewery Design – The “V” Curve of the present..
Golden Brewery’s “V” Curve
“Packaging is at the bottom of the “V” curve, as designed.
Throughput capacity increased by 20% across supply chain.
Increased allowed for sales improvements at Coors in 2007 & 2008
Additional capacity possible, as necessary
Logistics Process
(25mm bbl’s a year)
Brewing Process
(22mm bbl’s a year)
Packaging Process
(20mm bbl’s a year)

9. What’s Next for Golden Brewery?
What Must Change: Right-Sizing Brewery
Plan isn’t for Golden to be the “world’s largest brewery” in the future.
Golden is now one of eight breweries versus “the brewery” of the company.
Need to look at fixed cost and variable cost assets very differently.
What Can’t Change: Worker-Management Relationship
Golden Brewery has longstanding relationship between workers and management.
Changes to operation must be done with employees, not to them.
How is this possible?
Concept of “change” and “stability” (change can’t be continuous)
Engage workforce in changes (harder process, but valuable if strong workforce)

10. What it takes to be a leader in Supply Chain/Logistics
My view: SC Leaders must seek to drive top line as well as bottom line growth.
Coors Brewing
Costco
Dell Computer
Many others: SC is a strategic advantage
Need to understand “system thinking”
Understand the entire supply chain, not just your area
Understand “Cost/Service/Quality/Safety”, and not just one
Understand “People/Process/Technology”, and not just one
Strategy to Execution Leaders
Ability to “influence “C” level leadership at a company.
Ability to influence and lead line workers (shop floor workers)

11. What it takes to get there…
The importance of influence:
Leadership is more about influence than power
Great leaders can relate to anyone
Influence and networking go “hand in hand”
Influence is a part of life
The importance of preparation:
“The battle is won before it is fought”
Brought knowledge across many areas (for general management)
Influence and preparation go hand in hand
Start as soon as possible
Tough economy = lots of competition
You can’t start early enough on your career