You’ve spent the better part of a year, and a lot of hard work, getting grapes from the vine to the bottle to produce it. It is a labour of love and the lifeblood of your winery. It is different every year in so many ways and uniquely your own – you can never just pick up the phone and order more of it from a supplier half-way around the world. It is your inventory.

Perhaps the most important aspect of any business and the key to success is the management and accounting for inventory. For a winery, the ability to track inventory starts well before the wine is in bottles and cases in the warehouse. Inventory tracking is integral to the winemaking process. There’s a huge amount of effort that goes into the initial stages of wine production – harvesting, destemming, crushing, sometimes pressing that gets you to that all important second fermentation stage with the juice in stainless steel tanks, oak barrels, and concrete eggs. It’s also at this stage that most wineries start to record the production as inventory, with each tank, barrel, and egg a distinct inventory location with a specific inventory value. Knowing where everything is and what it’s worth is essential, and a strong inventory management system plays a leading role. From this point forward as the wine moves through to bottling each step incurs costs and the value of our inventory increases – all tracked by an inventory management system.

Of course, bulk wine is only part of the inventory story. To produce a case of wine we need bottles, corks, screwcaps, capsules, muselets, labels, boxes and more, each of which adds cost to our finished product. Inventory management systems capture the costs of purchases and allocate them to the particular wine being produced ensuring that we know the true cost of a bottle of wine when it ships to the customer. Access to that costing information is critical in helping the winery business manager determine the price that the wine will be sold at and the profit.

A strong inventory management system provides complete visibility into our finished product, not just how much wine we produce and what it’s worth but also where that valuable inventory is. The system should support multiple locations so we can track what is in the winery warehouse, at the 3 rd party logistics warehouse, and with sales agents. It should also allow for tracking of virtual locations – where the stock can be allocated to LRS and hospitality clients. Beyond dollars and cases, inventory management systems help us maintain our commitments to our customers.

Another key feature of a robust inventory management system is integration with supply chain and distribution systems. Purchase orders, receipts, and invoices should seamlessly update our inventory for quantities and costs in the same way that sales orders, shipments relieve the quantity and cost giving us a true perpetual inventory. An integrated solution of supply chain, inventory management, and accounting eliminates duplicate entry, vastly improves data accuracy and provides real-time data visibility. All systems in perfect harmony is the goal – just like our wine.


Be sure to read “The 6 Must-have Features in a Winery’s ERP System”, too.

 

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Alan MacLennan is a wine enthusiast, collector, Senior Sales Manager with Caron Business Solutions and principal architect of Caron Winery Solutions powered by Sage. He has over 18 years of experience working with the winery industry.