Anheuser-Busch Case Study

Anheuser-Busch Inc.

Anheuser-Busch (A-B) is the world’s largest brewer of beer with 14 breweries with 12 in the United States and two overseas. A-B sells beer in more than 80 countries. A-B’s operations and resources are focused on adding to life’s enjoyment not only through beer, but also through theme park entertainment and packaging. A-B’s subsidiaries include one of the largest United States manufacturers of aluminum beverage containers and one of the largest theme park operators in the United States. As a result of so many entities, A-B has an inventory system that suits the company quite well while benefiting other sub- organizations.

A-B’s distributors ship beer directly to the selling outlets. The wholesaler’s sales rep is responsible for determining the quantity of beer shipped to each retail location. A-B wanted a system that would enable them to more accurately determine the “order quantity” for each outlet that would minimize inventory while maintaining in-stock conditions at retail. (August Busch) This accurate order would increase sales and customer satisfaction through increased in-stock conditions. Additionally, retail customers would benefit from decreases in inventory. The heart of the solution to improving in-stock conditions and minimizing inventories lies in the ability to accurately forecast demand for A-B products at retail. A-B is able to obtain point-of-sale cash register scan data from leading retailers across the United States. From this information, it has been able to accumulate several years of historical consumer purchasing data. In addition, A-B has been aware of consumer purchasing causal factors that can be applied to historical purchasing behaviors to predict future purchasing behavior. While A-B had this valuable historical information, it could not be used effectively to forecasting demand. The impact of this inability to forecast has created higher cost in inventory on retailer premises as well as generating out-of-stock conditions at retailer. (Sellers, Patricia)

A-B wished to take advantage of state-of-the-art computer and communications technology by modeling retail outlet