Materials handling and real-time tracking at Dewar’s

A new inventory management system allows whisky maker John Dewar & Sons to track the location of casks used in blending its prize-winning scotch.

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John Dewar & Sons, Ltd., Glasgow, Scotland

Product: Blended whisky
Warehouse network: 23 warehouses, to be built over five years
Storage capacity: 1.3 million casks total, stored 72,000 casks alcohol per DC
Employees: 3 materials handlers per warehouse group

Time moves slowly in the whisky business. Alcohol distilled today may age for years in casks before a master blender at Dewar & Sons turns it into smooth, Scotch whisky.

Still, when it’s time to make Dewar’s award-winning blends, whisky blenders need the casks required for a recipe to be quickly and efficiently retrieved. 

That was a challenge for Dewar, which stores more than 1.3 million casks of whisky in its network of warehouses, as well as the warehouses of other whisky makers in Scotland.

“We were using a paper-based approach that was not the most efficient method of stock management,” says John McKee, Dewar’s MIS manager. What’s more, strict health and safety requirements come into play when storing and handling a product that can be easily ignited like alcohol.

In 2006, Dewar began a project to update its cask management system (Motorola), and introduce a total of 23 warehouses, each storing 72,000 casks, in an intrinsically safe (ATEX – zone 1) environment.

As part of that project, Dewar also moved from storing casks in racks to storing them on the floor, six casks to a pallet. The warehouse is split in to bays with each bay 11 pallets deep and 7 pallets high.

The result, says McKee, is that Dewar is the first whisky maker in Scotland to go real-time for cask/pallet management.

“While we’re just getting up and running on the system,” says McKee, “we’ll now know where every cask is in the system. We’ll save money searching for the casks we need. What’s more, information is held in the system for everyone to view rather than relying on a single individual remembering details of movements in the distant past.”

Finally, because the systems will be consistent from one warehouse to the next, any operator trained in one facility can go to work in any other facility.

A tradition of whisky making
Part of the Bacardi Group, the Dewar’s brand of whisky was established in 1846. The company opened its Aberfeldy Distillery in 1898. Today, Dewar’s portfolio includes the premium blends of Dewar’s 12 and 18 and Signature, as well as Aberfeldy Single Malt. 

Like other blenders of Scotch, Dewar stored not only its casks, but casks for other whisky makers as well. “Up to 40 different whiskies can be used to produce a unique blend,” says McKee. “So, each year we organize a contract with other whisky companies to trade whisky ‘makes’. That’s common in our industry.”

While Dewar’s whisky improves with age, its method for managing its casks had not. Even though Dewar maintains a computerized record of every cask, the make of whisky in that cask, and what year the whisky was put in the cask, storage and retrieval was still done with a paper-based system. Over the years, controlling the whisky stocks had become too big and too complex to do that effectively.

The old paper-based system also meant that information could easily be lost over the years. “We were relying on someone remembering the exact location of a whisky stored several years in the past,” says McKee. “You can spend a lot of time searching when you’re trying to find a particular whisky for a blend.”

In 2007, Dewar bought land in Glasgow to build 23 new warehouses over a period of five or six years. There were several reasons behind that decision.

• For one, a large percentage of Dewar’s casks were stored by other companies on their premises. “We had to pay rent on that,” McKee says. “We wanted to build our own facilities to bring that all in house.”

• For another, the existing facilities did not meet new, stricter safety guidelines for a facility storing a product that could easily ignite with a spark.

• Finally, Dewar, like its competitors, stored casks in specially-designed racks. That system meant that every cask was visible to operators, but it also was an inefficient use of space. “It was an expensive way to store, especially for product that doesn’t move very often,” says McKee.

Designing new DCs
Building new facilities created the opportunity for Dewar to create more efficient storage and information handling systems.

“Technology has moved on since the warehouses were originally built so we wanted to put in a state-of-the-art system that would save us time in identifying casks,” says McKee. “Along with this came the challenge of finding products that would survive in such a harsh environment, while also complying with various health and safety requirements.”

To meet European ATmosphere EXplosives (ATEX) requirements, Dewar needed to create a cable-free environment to ensure that no sparks could ignite the whisky.

The solution chosen includes 12 wireless access points installed in ATEX1 approved enclosures. The ATEX1 Antenna solved the RF and Environmental issues, while 2 wireless switches in the computer communications room manage the network, allowing additional capacity as more warehouses are built. The wireless switch contains state-of-the-art security measures, including smart intrusion detection and protection against denial of service attacks, so the IT team at Dewar’s can be sure that the network is always safe from intruders.

Dewar also outfitted operators with rugged, mobile computers that would enable a cable-free environment in the warehouses and allow employees the freedom to move around the warehouse to check cask information, while still having access to the same information that would be available if they were sitting in the office.

“A few years ago, a wireless system in the whisky industry was unheard of and didn’t seem feasible,” says McKee.  “The system allows our staff to pull up a 3D layout of the warehouse at the touch of button so they can pinpoint the exact location of a cask in seconds.  In addition, the new solution links back to our core ERP system, meaning that all employees have real-time access to the information they need.”

Unique storage and handling
In addition to implementing a new IT system, Dewar also created new storage patterns and processes. Instead of storing casks in racks, the whisky maker now stores casks on pallets to maximize storage space. Six casks are loaded onto a pallet; pallets are then stored in bays. Each bay is 11 pallets deep and 7 pallets high.

This, however, presented a potential problem for the wireless connectivity as wet wood, liquid and little airspace would absorb the signal. “That’s one of the reasons we went with a bar coded solution rather than RFID,” says McKee. “We didn’t think we could get a signal in that dense a storage environment.”

Instead, every pallet and cask includes a bar code in a standard format. “The bar code is encoded with who owns it, what year it was filled, plus some of the characteristics of the whisky,” says McKee.
By scanning the bar codes whenever a pallet is stored or moved, the system is updated in real-time. Dewar now knows where every cask is located, and can capture details of all movements to meet Customs and Excise requirements. 

At the moment, McKee adds, the system doesn’t tell the operator where to store pallets. “The next step is to build that type of logic into the system,” McKee says.

Still, McKee says that while only three warehouses are up and running, Dewar is already seeing benefits and new potential uses for the system. “Now it’s in place, we are so impressed with the way it is working and the time it is saving us, we are looking to roll it out to another three newly-built warehouses.  In addition, we are also implementing the system to control all stock material movements (bottles, caps, etc.) on our main ERP system covering receipting, production and dispatch.”

System Suppliers
System Integrator: RealTime DC Ltd
Wireless Infrastructure and bar code scanning hardware: Motorola

This article previously appeared in the March 2008 issue of Modern Materials Handling

About the Author

Bob Trebilcock
Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.

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