Handle with care

EFW has been launched to supply Dubai's hotels with fine wines. Handling these fragile and expensive goods requires a gentle touch and tight inventory control

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By  Neil Denslow Published  May 2, 2005

|~||~||~|Around 50 five star hotels are planned or under-construction in Dubai at present, all of which will be looking to entice guests with a range of first rate rooms and beachfront facilities. Fine dining options will also be a key feature, which is stimulating a demand for a wider and more high quality range of wines within the local market. Emirates Fine Wine (EFW) has been launched to fill this need, and its logistics management capabilities will play a vital role in ensuring that it can supply the wines required by hotels in both the quantity and quality required. “EFW was born out of the idea that the five star hotel market is growing… and becoming a lot more sophisticated and demanding both in regards to what products they wish to stock, and in terms of the quality of service when getting that stock into their storage facilities,” explains Alaisdair Lawson-Dick, the company’s general manager. The fine wine market is clearly a niche sector, but one that was being ill-served by the current players in the local market. “What I have gathered during meetings with five star properties is that the biggest challenges facing a wine & spirits company are the continuity of supplying stock and the supply of specific vintages,” he adds. “That is recognising each wine on its own, specifically by its vintage date.” To overcome these challenges, EFW has studied all aspects of its supply chain to ensure that it can provide a superior level of service. The most important decision in many ways was to set up EFW as a separate entity rather than as specialised division of MMI, which owns the company. This status has given the company a greater focus both in terms of sales and customer service, as well as enabling it to better handle its more focused inventory. For instance, the company can more easily track products by vintage using MMI’s existing stock control system, as it can manually create reference codes for each one. “We have decided that the last two digits of the reference code will relate directly to the vintage,” explains Lawson-Dick. “Codes ending in 01 will be from the 2001 vintage, and as and when we import new lines, we will manually update the vintage reference code in the computer system.” “It is easier for us to do than my colleagues at MMI, as we have less SKUs. We probably have a total of around 300 lines, while MMI have double that number, if not more,” he continues. The company sources its wines directly from the suppliers, which are spread around the world, and works with many of the most famous houses in the industry. However, it is not always able to secure large volumes, partly because of the very nature of the product, but also because of reluctance among some suppliers about shipping goods to the region. “Not all of them were immediately happy to let us have stock and to be their agents in Dubai, and we had to work quite hard to persuade one or two of the more famous wine producers, particularly in California and Southern France,” says Lawson-Dick. “I think we needed to persuade them, as they simply do not understand what is going on out here and the quality of the entrée market,” he continues. The quantity of goods that the company is able to source is a key factor in deciding how they will be shipped from the vineyard to Dubai. For smaller orders, such as a total of 15 cases in one year, then all of it will be delivered in one go. However, for larger orders, which can range up to 3000 bottles, the goods will be broken down into three or four smaller shipments. Whatever the quantity, the vast majority of the goods are shipped by sea, with only a fraction going by air. “In those cases, it is a question of getting the stock in at short notice, or it is a very high value [line] and we do not want to risk shipping it,” says Lawson-Dick. “We might be talking about three or four cases, but cases of US $800 or $1000 bottles.”||**|||~||~||~|For goods that go by sea, a key requirement is to ensure that the wine is not spoiled during their journey. This means working closely with the shipping company and forwarders to get the goods in the best position on the vessel. “We will ideally ship with our containers placed below the waterline, which allows the temperature to remain at an acceptable level for the wine… If we cannot get positions below the waterline, then we use reefers,” says Lawson-Dick. “Some of our producers also insist that we only ship their stocks during the winter months, so the majority of our annual stock is brought in between the months of October and May,” he adds. Another key element of the shipping process is the paperwork needed to get the goods through customs. This includes a range of legal documents related to the importation and liquor licensing regulations in the UAE, which require very detailed and precise product information, such as alcohol levels, numbers of cases, number of bottles per case and size of bottles. “We have people in our team who meticulously check the paperwork, and if any of it is not correct, then these people will contact the producers and insist they forward the right documentation, which then allows for the seamless transportation of the stock when it arrives,” says Lawson-Dick. “Of course, the danger is that the containers arrive — having not been exposed to any extreme temperatures at all [during the journey] — and then they are offloaded and left on the dockside in the open sunshine. They are only left there if the paperwork is not correct, however. If it is correct, then they come off the boat and go straight into our warehouse… We do not have any examples of the paperwork being wrong yet, and if it is, it will be made correct by this team,” he adds. While the company has the option to store some inventory in MMI’s warehouse in Jafza, in most cases it will be taken from the port straight to EFW’s facility in the Al Quoz area of Dubai. This means that the duty is paid on the day it arrives, which will then speed up services for the end customer. “[Hotels] want to have a high level of service, so we have put together a business model where the stock is held duty-paid, which means that it is then quickly available for delivery,” says Lawson-Dick. Al Quoz is one of the less glamorous parts of Dubai, but it is ideally located for serving the main areas for hotels in the city, such as Al Basra, Sheikh Zayed Road and Jumeirah. “Our vehicles will be able to make their deliveries and be back [at the warehouse] within a couple of hours. They can then be prepared to deliver expressly in the afternoon, if requested,” notes Lawson-Dick. The company’s facility is a modern 5000 m2 warehouse, which has been kitted out with air conditioning systems and insulated. EFW did have some problems finding an owner that would let their facility be used for storing liquor, but the company was able to overcome this eventually. “It was a challenge and sadly there were a couple of absolutely ideal properties that in the end were not available, and that caused us to be delayed,” comments Lawson-Dick. EFW’s main offices are also in the same facility, which Lawson-Dick sees as being doubly advantageous. On the one hand, this will allow much better communication between the sales team and the pickers and drivers, which should cut down on mistakes. It should also give the salesmen a much better feel for how the company is doing. “They can see with their own eyes the volumes of business that we are doing, which I think is quite effective,” he says. “In fact, this kind of office-above-storage facility is a model that is used to huge effect by wine businesses in the UK, where there maybe up to 1000 SKUs and picking the right wine for the right order is essential,” he adds. “The offices are also built to a high standard, and the facility is going to be something that we are happy to bring customers to,” Lawson-Dick continues. To cut down on picking mistakes, the company has also chosen warehousing and delivery staff that have a knowledge and interest in wines. EFW also sees these staff members as being future salesmen and managers in the making as well. “I have hired people to drive on the promise that they will only do it for a short time,” says Lawson-Dick. “And, as our business grows and our need for more account managers develops, the first people in line will be the people who have been working with us already, namely, our drivers and pickers. They have to have a genuine interest in the product to do this, and these guys do,” he adds.||**||

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