Trenstar: Making the Keg Connection
RFID tags help pubs stay stocked with popular brews.
Forget the old adage, “it’s what’s inside that counts.” What’s outside can be crucial, especially when it’s a keg, pallet, roll cage or other container used to transport materials or goods.
“For a lot of supply chains, those containers become the critical piece of the puzzle,” says David Adams, senior vice president of corporate strategy at TrenStar, an Englewood, Colo.-based firm that uses technology and logistics expertise to manage containers.
Fitted with the right technology, containers provide data on the material inside—where it has been, where it’s headed and how it has been handled. Efficiently managing a large fleet of mobile assets is a tough job, Adams says. And because those assets are expensive, loss and theft drain company profits. So do maintenance programs that kick in only after something breaks. After all, “if a seal malfunctions on an 800-gallon container of yogurt, that’s a pretty big failure,”he says.
The U.K.’s two largest purveyors of beer, Scottish Courage Breweries (ScottCo) and Carlsberg-Tetley Brewing Company, have sold their keg fleets to TrenStar in order to streamline their supply chains. TrenStar also helps manage containers for companies such as Ford, Toyota, Kraft Foods, and Goodyear. In addition, its technology helps manage medical equipment and air cargo containers.
TrenStar addresses the container challenge in several ways. It offers mobile asset management, including container manufacturing and maintenance. Customers can lease containers from TrenStar or they can have the company take over the logistics, including transportation and storage, for their private container fleets.
TrenStar also provides a tracking system based on radio frequency identification (RFID) technology and web-enabled software. Companies use this to manage their own containers, or TrenStar uses it to manage them for clients.
Growth Through Mergers
TrenStar inherited these competencies through the merger of three firms. Trencore Solutions, a South African company, managed mobile assets, and developed the web-enabled container management software that TrenStar employs today. MicroStar specialized in owning, leasing, and tracking fleets of beer kegs and other specialized containers in the United States. Those two firms joined forces in 2001 to form TrenStar. Later that year, the new company acquired KTP Ltd., a systems integrator in the U.K. that specialized in bar-coding and RFID technologies.
In the United States, TrenStar’s MicroStar subsidiary owns a quarter of a million kegs, which it leases to about 100 small brewers. It has not yet attached RFID tags to kegs here, but that could change if major American brewers follow the lead of ScottCo and Carlsberg-Tetley.
TrenStar is implementing tags, readers, and software in the U.K. to more tightly control the distribution cycle that sends kegs full of beer to pubs and the empties back to brewers. Eventually, it will combine the separate breweries’ containers in a single pool, making it easier to get the right keg to the right place at the right time.
ScottCo Starts Early
Keg tracking at ScottCo actually predates the relationship with TrenStar. In 1998, ScottCo implemented a pilot tracking system, equipping 400,000 kegs with read/write RFID tags. It installed readers at three filling lines to record when and where each keg was filled, and with what product. It also gave handheld readers to drivers, who captured data about deliveries to and pickups from about 4,000 customers.
In 2000, ScottCo started tagging the rest of its 1.6 million containers, installing readers at its other filling lines and giving scanning equipment to the rest of its 2,000 delivery drivers. The brewer developed the technology in conjunction with Saco Systems, a systems integrator based in South Africa.
As head of logistics development at ScottCo, Graham Miller was in charge of this project from the start. In 2002, when ScottCo sold its keg fleet, Miller joined TrenStar’s Brewers Logistics International Ltd. division as vice president of global accounts.
ScottCo first installed the RFID tags as part of a drive by U.K. brewers to institute a $30 (US) deposit on each keg. The aim was to reduce theft and loss. The tracking system would document that the kegs were delivered and picked up, and it would help catch people who tried to claim deposits on stolen kegs, Miller says.
Pub owners, it turned out, hated the idea of deposits; U.K. brewers still haven’t put them in place. But because the tracking technology pinpointed where and when kegs were disappearing from the distribution network, it still helped ScottCo reduce its four-percent loss rate to two percent.
By giving ScottCo a better view of its supply chain on a keg-by-keg basis, the system helped the company forecast demand for kegs, Miller says. It also kept track of when kegs received routine maintenance, so the company could schedule those services before problems occurred. By recording when kegs were filled, it helped ensure that the brewer delivered only fresh beer. And it helped identify pub operators who were buying ScottCo’s beer through unapproved channels.
That benefit is also important to corporations that own pubs. In the U.K., many publicans lease their facilities from companies that own of hundreds of pubs. Under this agreement, a pub operator may purchase beverages only from the pub owner.
But some publicans are tempted to seek lower prices through alternative distribution channels, says Simon Ranner, director of logistics at Punch Pubs Company.
Recording where each keg is delivered and retrieved, the container tracking system highlights discrepancies. “If we see product brought into one location, then we take it out of another one, we can see that it has been ‘secondary wholesaled,'” he says.
ScottCo decided to outsource its keg operation to take advantage of Trenstar’s more advanced, web-enabled management software, Miller says. Also, as ScottCo focused on marketing several new beer brands it had just acquired, it made good business sense to let someone else manage the keg fleet and tracking technology.
ScottCo will not have to swap out its tags or readers when making the transition to the new software; the existing hardware is compatible with the technology TrenStar uses, Miller says.
TrenStar’s software will give ScottCo more complete information about its kegs by allowing users to drill through deeper and deeper levels of linked data. For instance, Miller says, by tracking when kegs were filled and when they were delivered, the system might reveal that out of 60,000 kegs delivered from one depot in a week, 16 of them contained beer that was too old to sell. In the past, warehouse managers had no way to locate those out-of-date kegs to replace them with fresher product.
“Now the linked TrenStar system shows the identification numbers of the kegs and which pubs the kegs were in.”
Optimizing for Demand Planning
Beyond tracking kegs, a new optimization engine from TrenStar, due later this year, will help brewers deploy them more efficiently. Today, the typical company returns each of its containers to the same location every time. “Even if this spot has three months’ worth of inventory, even if 10 miles away there’s another spot that’s dying for assets, the container goes back there,” Adams says.
The optimization engine will match manufacturing plans to the kegs that are currently available and the kegs that pubs will soon release, Adams says. “That becomes a demand planning tool for our customers, for the reverse supply chain.”
With better control over the flow of kegs into a brewery, “you can be quite confident that the empty containers will be there. The containers do not stay at the depots for long, because you wouldn’t move them back for safety stock,” Miller says.
The software should create even greater efficiencies once TrenStar forms one pool serving all its brewery clients through a single logistics network. In the U.K., the company has already started working toward that goal, Adams says.
Once the pool is established, “you get whatever keg happens to fit your filling head and happens to be the nearest available,” says Miller.
That should keep the kegs rolling and the beer flowing in pubs throughout the U.K. and, if TrenStar has its way, on the Continent and in North America as well.