Craft Distilling Company Streamlines Operations and Increases Success in Several Areas

Company Profile

Heritage Distilling Co. (HDC) began as an idea in the minds of Justin and Jennifer Stiefel while sipping whiskey with friends around a campfire in 2011. Today, Heritage is the largest independently owned craft distillery in the Pacific Northwest and has been the most awarded craft distillery in North America by the American Distilling Institute for the past nine years. HDC has five visually intoxicating tasting rooms featuring unique customer experience programs, including Cask Club®. Its wildly popular portfolio of whiskeys, vodkas, gins, and rums is made with as many local ingredients as possible. HDC also has a reputation for giving back to the community's philanthropic service.

Situation

Heritage Distilling Co. was an existing client of Impact Washington – NIST MEP and our resource partner, Kocer Consulting and Engineering. During early discussions, we realized both companies had good relationships with Heritage Distilling Company and understood the next steps they needed to take to support their continued growth. It made sense to partner and pursue a second-round grant funding using Washington's Job Skills Program (“JSP”), a wage match program.

Impact Washington first worked with HDC during COVID, when the company had temporarily shifted gears to produce hand sanitizer to support the needs of local medical clinics, hospitals, and first responders. 

There were four significant goals to tackle by utilizing the Job Skills Program grant managed by Impact Washington and delivered through Kocer Consulting and Engineering consultants.

The primary goals were:

• To improve production planning and machine/employee utilization.
• To assist with developing a standardized franchise model for new locations through its Tribal Beverage Network
• To streamline operations. Heritage needed to employ its ERP software better. ERP (Enterprise Resource Planning) is a software system that helps you run the entire business more effectively and has specific modules for increased functionality of the manufacturing processes.
• Evaluation and improve HDC's supply chain and raw materials processes.

Solution

Impact Washington identified pain points, gaps, and improvement opportunities as the process began. The engagement involved gathering information across every facet of the company to baseline the areas and systems put in place to review and test to determine problems.

Impact Washington’s work with HDC included hosting multiple courses simultaneously, centering on increasing the staff's ability to evaluate, quantify and carry out strategic improvements in all aspects of the business. There were training groups for office staff, sales, production, executives, shipping, and distribution staff.

Training HDC’s staff to utilize the company's MRP Module was a massive win. MRP is a production planning and inventory control system. The company can now audit inventory and project supply, calculate materials needed as orders are received, and employees can check the system and use the tools to project those needs. Before the training, staff manually studied all those details, sometimes daily. Their current system needed more efficiency, which led to problems.

Data accuracy, and improvement in the allocation of capital and inventory, are improving. As part of getting the MRP module working, the engagement provided an opportunity to audit and clean up 100% of the planning and item master system data. Dozens of obsolete items were removed, and safety stock calculations were set for all items.

Another success realized has been better visibility of long lead-time buys and items to be manufactured. “At a high level, we anticipate they could save about 30 hours per week across warehouse and production supervisor and management roles," the report states. Before Impact Washington's support with MRP utilization, the Heritage Distilling Company Inc staff used manual reports and tools to check their work in parallel with data entry in the E, leading to errors and significant time wasted. In early 2023, HDC expects to realize its hourly savings fully.

Results

• Increased sales: $7 million
• Jobs retained: 75
• Retained sales: $16 million.
• Cost savings: $700,000
• New processes: $500,000
• Plant equipment: $7 million
• Workforce learning: $700,000

In addition to the positive numbers, HDC enjoys improved teamwork and a clear team vision. The improvements help reduce lost sales, and production changeovers, improve efficiency, and cut waste with previous overbuys and expired inventory.