Molson Coors CEE’s Predictive Insights for Sub-Tier Visibility

Franziska Nothofer: 

Hello everyone. Good morning. Good afternoon. Thank you for joining us today from around the globe for the webinar Data Success: Molson Coors Central and Eastern Europe’s Predictive Insights for Sub-Tier Visibility, hosted by Everstream Analytics. All attendee lines are currently on mute, but if you have any questions throughout the webinar, please just drop them into the questions box and we will get to as many as we can towards the end of this session. The webinar is also being recorded and we will send you a copy afterwards. 

My name is Franziska Nothofer and today I’m joined by our two presenters, Melissa Bracken, who is a principal consultant here at Everstream Analytics and Momcilo Orlandic, who is a senior procurement leader, at beverage leader Molson Coors Central and Eastern Europe. Both of them will be guiding us through the presentation today. And without further ado, I’ll hand it over to you, Melissa, to get started. 

Oh, you’re on mute, Melissa. 

Melissa Bracken: 

Thanks, Franzi. Good morning, good afternoon everyone. Let’s just jump right in and spend a moment going over these critical supply chain management insights you see here. First, you can see less than half of companies have sufficient visibility into their tier one suppliers performance. This highlights a significant blind spot because they’re lacking oversight to successfully manage and optimize their supplier relationships. Without this, companies are essentially flying blind, unable to effectively monitor the performance of their most immediate and often most critical suppliers. And as you know, this can lead to inefficiencies, quality issues, and missed opportunities for improvement. 

Now consider the financial implications of this gap. Average cost of a supply chain disruption to a company is a staggering 1.5 million a day. This isn’t just a minor inconvenience. Disruptions can occur for various reasons like natural disasters, political instability, or unforeseen logistical challenges. Without proper visibility, organizations are ill-equipped to anticipate and mitigate these. So the takeaway here seems pretty clear. Improving supply chain visibility isn’t just beneficial, it’s essential. Adequate visibility allows organizations to proactively manage their supply chains, identify potential issues before they escalate and implement timely solutions, which in turn can significantly reduce the risk of these costly disruptions. Next slide, Franzi, please. 

So why is sub-tier visibility so critical in all this? First, the harder it is to obtain a material, the more important it becomes to know exactly who your suppliers are and where potential bottlenecks could occur. Identifying single source suppliers is particularly crucial since any disruption in their operations can have a severe impact on your supply chain. Visibility allows you to develop contingency plans and identify alternative sources before a crisis hits. Next, consider the criticality of certain materials to your business. It’s vital to know the suppliers of irreplaceable materials in your best-selling, most visible or most profitable products. These materials often have no substitutes making their availability crucial to your operations. So understanding your sub-tier suppliers for these and the challenges they might be facing helps ensure that these components are always available and protects your core products from disruptions. Now, higher-priced materials significantly impact the cost of goods sold and overall profitability for you. 

So by monitoring your sub-tiers, you can manage costs more effectively, negotiate better terms, and identify opportunities for cost savings. This is particularly important in industries where material costs are large portion of your overall expenses. Now lastly, consider brand risk associated with your supply chain. There’s increasing scrutiny on how products are sourced, particularly around sustainability risks such as child labor, forced labor, and high carbon emissions. Sub-tier visibility allows you to ensure your entire supply chain adheres to ethical and sustainable practices. This not only helps you avoid potential legal issues, but also protects your brand reputation. So you can see why we at Everstream think sub-tier visibility is not just a nice-to-have. It’s a necessity. And by investing in technologies and strategies that provide deeper insights, ensure supply chain, you can build a more resilient, efficient and responsible operation. So now I’ll now quickly go through some of these tools and strategies in the next slide. Please, Franzi. 

So what can help you uncover and strengthen your end-to-end network? To start, the sort of automated multi-tier mapping Everstream uses is a game changer. This technology allows us to identify and map your sub-tier suppliers and gives you a comprehensive view of your entire supply chain so you can uncover relationships and dependencies that were previously hidden. This end-to-end visibility can be seen on one of our platforms maps here on the slide where you have the supplier and there’s sub-tiers mapped out and you can see the direction of material flows and whether incidents are affecting each of those facilities, which are the numbers and colors you see on the screen. We can go into those later in the demo. Knowing your sub-tiers means you can also identify events affecting them from natural disasters and political instability also to supplier bankruptcies or operational issues of ports. 

So you can then implement mitigation strategies before the disruptions impact your larger operations and move from a reactive to a proactive approach. Another significant benefit is being able to uncover supplier risk indicators. These signals can span across various categories such as these shown here. By continuously monitoring them, you can identify potential risks early and take action to address them, to ensure your supply chain aligns with your company values as well as regulatory requirements. Accuracy of all these insights is really enhanced when you combine AI with human validation. Of course, AI can process vast amounts of data quickly and identify patterns that might be missed by human analysis alone, but human expertise is still crucial for interpreting results. And our data science team does exactly this to provide you with a high level of sub-tier accuracy and reliability. So now let’s explore some real world examples from Molson Coors that demonstrate the impact that tools like the Everstream platform can have on your business. So over to you, Momo. 

Momcilo Orlandic: 

Thank you, Melissa. And I think it’s so appropriate that we are finding ourselves together with other participants to discuss how cutting edge technology today nowadays can help us in building this visibility in multi-tier landscape and how we can extract that visibility in bringing more of the value to the organization. But if we go back 20 years ago at the beginning of 21st century, I remember how that VUCA expression was kind of very abstract. And now when we look back from this distance just four years ago, I think volatilities, uncertainties, complexities, they are all there from the COVID times, lockdowns, regulating the border crossings, the flow of the goods, of the people. And then in the last two years, the war of the soil in Europe causing that inflation leviathan and happening to impact so many supply chains. So to build the visibility, what’s happening in your supply chain I believe now becomes more and more of the necessity for any global organizations. 

And if we flip to the next slide actually, so it’s good to build the visibility but then what about the value? We already mentioned and Melissa mentioned how we extract the value from the visibility and it’s a journey, it doesn’t happen over the night. And normally everything starts with the mapping your supply chain, discovering and putting on the map all those tier one locations and then putting the artificial intelligence and the engine works its own to discover those tier two and tier three and tier four locations. And then you go into the next stage, you enable the user adoption, you want to see the users really, really getting those alerts, what is affecting your supply chain and what you can do with those alerts. And then as you move between adoption and mapping of the supply chain, you’ll find yourself in the next phase which is more about the risk management. 

Then you realize that all of the sudden it’s not just what you used to think, it’s just one thing happening at the time and affecting your supply chain. But then you realize there is a lot of things coming together which might disrupt you from the sub-tier level perspective. Because remember we all know our tier one suppliers because we get the invoices from them but then they’re also connected with other legal enterprises. And to eliminate that parts of the supply chain can really give you critical information in time that something is happening which carries disruptional potential and it needs to be addressed rather sooner than later. Because normally in multi-tier supply chains, everyone got the goods on stock for 30 days. So if you look into tier four until tier one, there is 120 days actually of the timeline which until you realize that something happened. 

And to have that visibility into the sub-tier levels and realizing something is happening rather now in this moment than after two or three months can give you a really advantage how you secure the flow of goods, how you address the supply assurance. And this is how the risk management organization and processes are starting to shape in any of the organization. Now look in some of your organizations you might want to address this in a central way. In other organization it can be done in a more decentralized way to the number of the user. But this is something which is very characteristic I suppose for any organization. But in terms of adoption of the technology and extracting the value from the sub-tier visibility, it is also a learning curve. It is also a learning curve. And on the journey you realize how many things you might want to change in terms of how the users are interacting, how the customers workflow look like and how that piece of information goes from a lot into the action. 

And then you come into this value realization and the tracking phase where you are able actually to extract the value on the back of the early visibility on the back of the early signals that you can benefit. And then you can really attach a certain number that you can monetize and to see hey, we managed to avoid disruption on this specific point and if this happened, if this tracked us, this would be the results. And I believe in the cases we are going to dive a little bit later, it is all about the anecdotical examples and this seems to be quite appropriate value trackers, but they can be also very plain mathematical ones. And once when this kind of the basics are done, the platform is established and then through the user adoption you move into the phase of the value realization and tracking, then you are setting yourself for something which comes with the productivity improvements and of course the cost avoided and other opportunities availed specifically when you realize then you have that you’re single sourced on some of the potential supply lines. 

So now this is a little bit about the theory, how this might work in any organization from the supply chain risk management perspective. But now let’s give a look into the real world of examples which happened actually. And if we flip into the next slide, we go into the world of logistics. So we all remember, and I think most of you at least have had an opportunity to read about this logistics disruptions which happened on the back of the affects which have been performed in the Red Sea inducing between seven and 10 days of an average of delays. You remember a few years ago when this Suez blockage has happened, how that massively impacted all transatlantic shipments in terms of the oversea cargo transport. And when you put all this into the prospect for any container transport which goes through overseas, any kind of disruption produce impact almost immediately. 

And that means there will be delays in the cargo shipments and that means also a very high port utilization. Imagine that from the back of the backlogs and the delays you all of a sudden get a very big number of the shipment containers and the boats reaching their final destinations on the ports. And this is what happened. We have seen some very high port utilization on the European port, we have been using to get our goods delivered through the overseas and then we started monitoring these developments and alerts. We have been very interested, our logistic guys have been very interested to check would this can potentially represent for us? Can this cause any kind of delay or any other kind of disruption? And what we have seen at a certain point of time there was a very high number of the containers arriving at once and the land pool water started claiming increased demarrage costs. 

And these are not small costs. Demarrage costs we claim could be quite severe and significant. The good thing is that if your land forward there is your tier one supplies, the ports are usually the tier two supplies. So you have the visibility in ports, you can see what’s happening around those ports, what are the kind of the disruptions which are presenting, which are being affected, which are being inflicted on those ports. So once when we got this piece of information that there is a rising cost in demarrage, we said to ourselves and logistic guys said, “Hey, we need to go a little bit back, so let’s track back these alerts and in incidents this system which are associated with port utilization through the platform. And then let’s put it into the comparison comparison in SLA we got with the land pool water.” What we discovered was on the back of all those data we received through the platform, this clearly indicated that supplier have not been prioritizing our loads because delaying the pickup to the port conjections and the strikes and this really helped us that we can fend off this increased demarrage cost. 

And that’s not the small amount we are talking about, the triple digit expressed in kilo euros. So this is in terms of world of the logistic and if we flip to the next slide, we go from the world of disrupted logistics into the world of the trade regulations. And this actually gives also highlights importance of the sub-tier visibility. Because we already mentioned some of the trade regulations which have been changing in the pace in the last several years and we have been monitoring our sub-tier network and we have been able to see that there is an increased number of alerts about the trade regulation change. And the sanctions have been applied by European Union and by United States affecting some of the commonly used commodities. So we went into the sub-tier networks just to make sure that some of these commodities would not be the particular subject of interest or could cause any of the disruption. 

And there was an interesting finding that we discovered one trade relationship which originated specifically for this commodity of interest which would be flowing into our supply chain potentially and which was the subject of the sanction. So what we did immediately is that we highlighted this potential business risk for heightened awareness within our organization. We start talking with our compliance team as well, then we start talking with [inaudible 00:18:49] stream as well to check this confidence score that are we talking about the trade relationship which is relatively still fresh, it’s still in place or could be the historical ones. And then we contacted the tier one suppliers that we can raise our concerns. 

We got hopefully assurance from their end and we resolved this concern about this specific trade line. But imagine that that trade line for example is very much active and it flows into your tier one supplier, then you really want to get these things very much straight, you want to get official statement, then these goods will not flow into your supply chain either as a semi-finished goods or packaging container. Because some of the fines in some of the countries which are regulating the matter can be six digit fines and all other repercussions which would come with such a findings. 

So this is the use case from the trade regulations and if we flip into the next slide, we move into the world of the natural disasters. And this is a really interesting one because in May we started getting a lot of alerts about the flash floods in Germany and then all of a sudden we saw in the several of the last there is one specific supplier for which we know from our sub-tier network it supplies tier one supplier. So we went again into the sub-tier findings. We went into the sub-tier network. We a little bit adjusted criteria just to check who else suppliers is potentially this sub-supplier coming and we discover it that this sub-supplier is actually supplying five of our tier one suppliers. Now imagine if this sub-tier supplier is exposed to the floods and we went into the proactive risk scoring to check that score and it was pretty much high. 

We really had concerns that if this sub-supplier is affected and the production is stopped and those trade lines are cut between the sub-tier supplier and our tier ones that might create disruption. We collaborated with the tier one suppliers to discuss potential mitigation plans. They have been all in contact with the sub-tier suppliers and we received the assurance from tier one suppliers that there are sufficient stock levels for this particular commodity and that our production and our quantities and our volumes are not at risk. So on the back of the sub-tier visibility we have been able to approach tier one supplier and to request priority for our supply lines. So if there is a real risk and your tier one supplier is affected, that means our tier two, please prioritize our supply lines because we are giving you this information before potentially even you knew. And by this I’m going to conclude on the use cases and over to you, Melissa. 

Melissa Bracken: 

Thanks, Momo. Let me share. Okay, hold on. Okay, just to give a quick demo before we go into Q&As, I wanted to start or show you from Momo’s example of trade regulations and uncovering the dangerous sub-tiers related to that, how you might do that in our application. Let’s go over here to incidents. First of all from our supply chain view, you have several entities you can use to filter the information. For this example we’ll go to incidents. You can see here we categorize each incident. I just want to show you quickly overall here how you would see legal and regulatory and trade restriction type categories, right? So if you wanted to look at the sub-tiers, we have filters and I’m going to go to a save view up here which has the filter you can see of discovered facilities, making sure that we’re filtering for any incidents that are affecting sub-tiers. So going back to this, these are the incidents that if we scroll over, have a lot of discovered facilities that are being affected. In this example, I’m going to look at a flood, which is… Let’s search for it. 

Okay. This incident, we click into the details here we’re going to see which discovered facility or sub-tier is affected by this flooding in Minnesota. And you can see in our map we plot exactly where the flooding is affecting on the map. Now we click into the map and go to our tiered view. It gives you a really good visualization of how this sub-tier that’s being affected, which is a tier three is affecting your other tiers. You, also by clicking on the line, are able to see which materials and their HS codes in the case of the discovered facilities are being affected. 

Franziska Nothofer: 

Melissa? 

Melissa Bracken: 

Yes? 

Franziska Nothofer: 

Sorry to interrupt you briefly. We still see the facilities view on the screen instead of the map. 

Melissa Bracken: 

Ah. So it’s not updating as I click. I’m not sure. Sorry about that. 

Franziska Nothofer: 

No problem. 

Melissa Bracken: 

I’ll try to jump through it quickly. Sorry about that. So what I was saying- 

Franziska Nothofer: 

No, we can see it. Perfect, thank you. 

Melissa Bracken: 

Okay, great. So the incidents view, like I was saying, we scroll down here quickly since no one saw it. We have the different categories, right for legal and regulatory, which is what Momo was talking about. You can save the views. We have filters here and you can save views, your own views. And if we skip over to the impacted sub-tiers and scroll over, this is where we have a filter that shows any discovered facilities, only display incidents that are affecting facilities. So in the example I was going to show, I filtered this one and you can see on the map where it’s affecting. When we click details, again we’re in the incident and we can see which sub-tier was affected here. If we open the map, again, it shows that. We go into the tiered view, we can see the tier three that was affected and all the different tiers that it links over to. 

And like I was saying, whereas that was here that you can click on the line to see exactly what material is being affected by that sub-tier perhaps being affected so much that it’s not producing what you’re expecting. So you then could go up to your tier one and check with them, “Hey, is your sub-tier still giving you the materials you need or are there going to be delays?” That’s the sort of thing you can check on. Now, quickly hopping over to our other view here, which is our network graph is where you can also see a different view of the entire supply chain for this supplier and what Momo was talking about. For example, worrying if someone has a single supplier or everyone is affected for that supplier, all sub-tiers are affected. We can check quickly by going to the tier two on this map. When you go to the tier two, you’re going to see in fact they have a lot of sub-tiers and this one- 

Franziska Nothofer: 

I’m so sorry to interrupt, again, we still can’t see the map on the screen at the moment. What we can see is the network tiered view. 

Melissa Bracken: 

Apologies, it jumps tabs I think is what’s happening. Apologies. 

Franziska Nothofer: 

That’s all good. Perfect, here we go. 

Melissa Bracken: 

I’ll leave it with this because we want to wait time for questions. We have this network view where you can see here’s the tier three that was affected. You can search for the tier two to see that in fact it has all these different sub-tiers and when you click on a line it will show you which material is going between, but this is how you would check you have single sources or not. So I think we can move to questions so we can answer a couple. 

Franziska Nothofer: 

Perfect. Thank you for talking us through the demo, Melissa and thanks, Momo, for the insightful cases that you presented earlier. We meanwhile had a few questions coming through from our audience and the first question is around AI and proprietary data. So basically could we build our supply chain both with artificial intelligence and with data of sub-supplier locations that we already have? 

Melissa Bracken: 

Yes, absolutely. For the maps I was showing you for the sub-tiers, we will map anything. The more you know the better because the more we can put into our model that will then discover the further sub-tiers. For example, if you some of your tier twos, then it’ll make it even more accurate when we discover the tier threes. So yes, we can map zeros, of course, ones and any twos and possibly if you know any threes, we can map all of those in addition to the ones that are discovered with the AI. 

Franziska Nothofer: 

Brilliant, thank you. I’m conscious of time. We can cover one more question. How long does it take to generate sub-tier results? 

Melissa Bracken: 

Well, in general, Momo can give his answer, but we have sped things up a lot this year and we’re down to… We do our results in batches and we can get your first results within two to three weeks at this point into the application. 

Momcilo Orlandic: 

So this is quite an improvement. It’s supposed to be 10 weeks, but as the product is continuously improving, obviously there are improvements as this is a journey. 

Melissa Bracken: 

And it does, of course, vary with complexity, but as time is going on, we’re getting faster and faster. 

Franziska Nothofer: 

Amazing. Thank you both for answering the questions and for the great presentation and demo today. Thank you all for the great questions asked. Does anyone have anything else? Any pressing urgent questions, please pop them in the question box. We can get back to you after the webinar and answer those one-on-one. We’re now coming to the end of the day’s webinar. If you would like to get in touch with our team directly, please email [email protected]. Our team is more than happy to help and dive deeper into any topics we couldn’t get to today. You will also receive the recording of this webinar via email, so keep an eye out for that. And thank you to all attendees who joined us today and the special big thanks to both our presenters. Have a great day and a good weekend. And with that, we will end today’s session. Goodbye. 

Melissa Bracken: 

Bye. 

Momcilo Orlandic: 

Bye.