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Tipplers is a thriving wine shipper and is owned and managed by Sid Tippler. The company’s head office is in Bournequay and regional offices are strategically located across southern England.
Wine is imported from all over the world and sold to a wide range of customers: hotels; restaurants; free houses; off-licenses; supermarkets and so on. Tipplers also supply beers and spirits as part of their complete service to the trade, but wine is their prime concern.
Imported wine is subject to clearance through H.M. Customs & Excise. Either wine is duty paid, in which case it is dispatched directly to Tipplers’ warehouses, or it is held “in bond” at Tipplers’ own Bonded Warehouses with duty still to be paid. Wine is sometimes held at the suppliers in the country of origin.
Tipplers main warehouse is in Bournequay, but they have regional offices and warehouses in three other southern locations, Falquay, Portsbridge and Hampton-on-Sea. Customers wishing to deal with Tipplers do so through the regional offices and may buy on account or C.O.D. Account terms are offered only to customers satisfying certain criteria.
The company consists of three divisions: Customer Services; Stock Management; and Accounts.
The Customer Services Division
Tipplers customer service division are proud of their long tradition of quality service. They offer telesales, an experienced field sales force, regular and reliable deliveries to customers at mutually agreed times, an emergency delivery service, wine-list production, including design, printing and pricing, even advice on content should the customer require it.
To provide this they employ their own drivers, a knowledgeable sales staff and they keep a database of wine information that is personally maintained by a fully qualified Master of Wine. Sid believes that the quality and commitment of his staff is Tipplers greatest asset.
The Customer Services Division is responsible for Sales, Deliveries and Professional Services.
The Sales Department
The Sales Department is responsible for maintaining regular contact with the customer via their field sales personnel and telesales operation. They also maintain sales records, and compile monthly sales reports and forecasts for presentation to the Sales Director at Central Office in Bournequay.
Upon receipt, existing customers’ orders are checked by credit control to ensure that their credit limit will not be exceeded. Customers exceeding their credit limit will be offered cash-with-order facilities until balances are reduced to acceptable levels.
New customers have to provide bank and trade references before credit facilities can be offered. Meanwhile orders can be accepted on a cash-with-order basis. All orders are checked for product and price accuracy prior to the above credit checks.
Customers whose accounts are more than 30 days overdue are refused further facilities. If the account still remains unpaid after 60 days the customer’s details are sent to an external credit collection agency that pay the debt less a service charge and proceed to recover the debt plus an interest charge from the customer.
Acceptable orders are then passed to the Warehouse where a picking list is raised. The Sales Department are advised of any shortages or other inability to complete an order. The customer is advised and offered an alternative.
An advice note is sent to the customer indicating the date and time of delivery. Customers are invited to phone should this time be inconvenient. Deliveries are always changed to suit customers? needs. Stock records are updated to show products and quantities shipped.
A shipping document is passed from the Warehouse to Transport to enable them to plan daily delivery routes. At the same time information is passed to Accounts who raise a Customer Invoice.
Goods dispatched are also accompanied by a delivery note. On delivery the goods are inspected by the customer for breakages, shortages and errors. These are indicated on the delivery note copy which is signed and returned to the sales department.
A credit note is raised if necessary and the Monthly Statement of Account ultimately adjusted. Any returns due to errors are returned to stock, and this is recorded in the stock records. Faulty stock, such as corked wine etc., is returned to head office for analysis.
The stock held at regional warehouses is based on past experience of customer requirements. Stock levels are maintained by referring to the re-order level. This triggers a stock re-order request either to:-
(i) the central warehouse that holds duty paid stock
(ii) their own Bonded Warehouse where stock is held with duty still to be paid
(iii) Negotiants in the country of origin of a particular wine. (Negotiants are local specialist suppliers. For example the Negotiant in Burgundy will be a specialist supplier of Burgundy wines.)
On receipt of stock records are updated. It should be noted that stock deliveries are made direct, but all paperwork is handled by the central office in Bournequay.
All goods shipped are accompanied by a shipping document which shows only the quantity of each item.
A similar document showing quantity of each item, its cost price and the amount of duty paid is issued from central office. A copy of both documents is signed and returned to central office.
Professional Services Department
The Professional Services Department provide the following:
(i) Help for hotel and restaurant customers in choosing which wines they should keep in their cellars to complement the food offered; design, layout and printing of wine lists and the provision of “house wine” labels.
(ii) General advice on which products to stock is offered to all customers.
(iii) For hotels, restaurants and public houses, Tipplers can install and maintain computer controlled beer, wine & spirits dispensing equipment.
(iv) In house and off-site training for all customers’ bar and sales staff.
All enquiries for professional services are channelled through the Sales Department who complete an enquiry form (see Exhibit ‘A’). The form is passed to the appropriate sales representative who follows up the enquiry to obtain more details from the customer. When full details of the customer?s requirements have been obtained the representative meets with the relevant experts to discuss a suitable course of action. Information is sought from the customer, stock and equipment records as necessary. The same sales representative always deals with the same customer.
For the purposes of this exercise the Cellar Advisory Service section will be used.
Cellar Advisory Service
This unit provides the services outlined in (i) and (ii) above. Of particular importance here are the cellar records. These are in two parts:
1. A full description of all wines stocked by Tipplers.
2. A record of all stock movements and stock levels for each wine.
When considering customers’ requirements the wine experts are seeking to harmonise as closely as possible the wine to the food offered on the customer’s menu. It is important therefore that they have information about a wine’s style and characteristics, e.g. dry, medium, light or heavy body, light or fully flavoured, fruit, etc.
Often customers may require wines from particular countries, or more precisely, a specific region of production, e.g., France is a wine producing country and has many regions such as Bordeaux, Loire, Burgundy, etc. The year of production, the vintage, is also important and so of course is the colour of the wine.
When a decision is reached and the customer has agreed to the wines suggested, the sales representative responsible for the customer completes a Customer Special Stock card, Exhibit ‘D’. This contains brief details of the wines provided.
A copy of this document is kept in the sales department for reference when a customer wishes to re-order. The price charged for the wine is negotiated with the customer.
Currently all records are paper based, consequently much time is spent searching for the required information. There have been a number of occasions recently when records have been found to be out of date. This has been of some embarrassment to Tipplers, who pride themselves on the quality of their service. More seriously, such incidents can be a source of annoyance to the customer.
The main problem is the maintenance of wine stock records which require the completion of two forms: a bin card, kept with the wine in the cellars, and a Cellar Control Record located with the stock controller.
Examples of these forms are shown in Exhibits ‘B’ and ‘C’ respectively. It is important that the bin card and cellar record contain compatible and up to date information. The bin card is updated each time an item of stock is issued from the cellars and at the end of each day this information is transferred to the Cellar Control Record.
Purchases to replenish stocks are dealt with in the same way. Clearly there during a large part of the day the information on the Cellar Control Record is incorrect and this information is used to check availability when processing customers? orders.
General
Management regard the functions of the Professional Services Department as a key feature of the business and one that gives Tipplers an advantage over its competitors. They take a serious view of the problems described and are very keen to find a remedy.
Sid, however, is very keen to implement a company wide IS in order to help the business become more responsive to customers needs and competitor activity. However the cost of this is likely to be far in excess of available funds.
Although Sid feels that he has full control over accounts, in reality the Finance Director controls the purse strings and is able to subtly persuade Sid in these matters.
The most pressing problem is ensuring that Sales have up-to-date information on wine stocks in order to avoid the highly embarrassing promises on deliveries that cannot be met.
The Sales Manager is the champion for this system and, although the Finance Director is not too keen on spending money, particularly on information systems, it is likely that he can be persuaded to fund the smaller system.
The IS Manager is rather uninterested in anything that will upset the status quo!
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