Pokka May 2020

POKKA Pte. Ltd.

How POKKA is transforming its total beverage production and distribution across the value chain

IN ASSOCIATION WITH

DIGITAL REPORT 2020

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POKKA: transforming the total beverage production and distribution value chain

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P O K K A P T E . LT D .

POKKA is focused on upgrading its production lines and leveraging the power of data to improve supplier relationships and distribution

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he Japanese conglomerate POKKA Pte Ltd in Singapore, whose ultimate parent is Sapporo Holdings, manufactures,

markets and distributes POKKA to all markets internationally, except Japan. In addition, POKKA in Singapore also distributes a range of brands 04

including Sapporo beer, Evian, Volvic, Badoit, Red Bull, Bundaberg and others in the Singapore market. Sapporo Holdings in Japan has three divisions covering alcoholic beverages, a Japan-focused property arm and a food and beverage group, where POKKA sits.

POKKA is one of the Japanese giant’s most successful brands in the Asia Pacific region, where it is a market leader for healthy drinks choices with no preservatives in Singapore. POKKA is also one of the only manufacturers that offers real brewed RTD beverages in the coffee and tea category.

Our brand has won Asia’s Influential Brand Awards for the last two consecutive years as Asia’s best non-carbonated beverage. POKKA operates three manufacturing plants in Asia, one in Singapore and two in Malaysia.

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P O K K A P T E . LT D .

“ The board backed us to be more flexible and got behind the process of upgrading old and inefficient production lines” — Rex Macaskill, Group Chief Supply Chain Officer, POKKA 06

Rex Macaskill, Group Chief Supply Chain Officer, explains that, as well as manufacturing, POKKA handles its own distribution across Singapore via its warehouse network, with deliveries to the modern trade, general trade, coffee shops, schools and more.

“Where our competitors might outsource to 3PLs, we have our own local distribution networks which makes our business more complicated from a logistics perspective,” he adds.

Macaskill’s role encompasses the entirety of POKKA’s supply chain; making reference to his previous job title – Director & Head of Supply Chain, Manufacturing, R&D, Procurement and Distribution – he jokes, “I have to wear many hats. When something goes wrong, I’m the first person they call.”

TRANSFORMING PRODUCTION Macaskill joined the company in the winter of 2018, at the beginning of a period of transformation after a tough couple of years. Following an up-swing in 2019, he recognises several factors that have contributed. “The board backed us to be more flexible and got behind the process of upgrading old

There’s Always a Pokka CLICK TO WATCH

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0:30

07 and inefficient production lines,” he

small runs to test the market and play

explains. “At the moment we run on

the niche game. As exporters we might

minimum order quantity which, for

be required to supply a niche product

example, might mean the line needs to

to Dubai and a different version for

produce 5,000 cartons at a time. The

Cyprus. Our new production line will

new lines will allow half that, which

help us become more flexible in a cost-

will make for a more agile process.”

effective way.”

Macaskill makes the important distinction that POKKA is not a marketing

DRINKING IN THE DATA

company based on huge volume, like

Macaskill explains that when he arrived

Coca-Cola, but has a focus on product

at POKKA the company was working

development and trying to innovate

in silos; being reactive rather than

to bring something new to the market.

proactive. “I went back to ‘back-to-

“In doing so, we don’t make massive

basic principles’ with how we were

production runs,” he adds. “We’ll do

working,” he says. “We needed greater w w w.po k ka . com . s g

LHT Holdings Limited (Singapore) Telephone:(65) 62697890 Websites www.lht.com.sg www.ippcpallet.com www.ecrpallet.com

“ We needed greater transparency with data across the whole value chain so our people could see the consequences of their actions or non-actions” — Rex Macaskill, Group Chief Supply Chain Officer, POKKA

to make accurate forecasts. This col-

laboration contributed to POKKA’s renewed success in 2019.

transparency with data across the

CHANGE MANAGEMENT

whole value chain so our people could

The move away from pen and paper,

see the consequences of their actions

and manual stock taking, to the

or non-actions.” From that perspective,

introduction of excel templates has

Macaskill notes that the application

improved efficiency at POKKA. With

of technology was less about having

many people having been at the com-

the latest shiny things and more about

pany for 10-20 years, training was key

taking existing data and making it

to a smooth transition to new ways

available to multiple teams.

of working and educating staff in the

“We created shared drives so, for

importance of accurate stock checks.

example, people could view their

“Change is the biggest bottleneck,”

production and market plans. It was

confirms Macaskill. “We can’t be in

important to improve the visibility of

a situation where we run out of stock

data and actions. For instance, we

and lose money for the company, or

could have items in stock but not know

end up in a situation where we have

how long they had been sitting in the

too much stock. Overstocking puts

warehouse. Now, we’re producing

stress on warehouse space which hits

weekly reports and not relying on men-

costs. I’ve been coaching our teams

tal calculations.” This overview helps

so they can understand the financial

POKKA’s plants decide what they

impact of one department on another,

need to produce next and enables

see the chain effect and appreciate

sales teams to focus on what’s selling

why it’s so important to become more w w w.po k ka . com . s g

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CO MPAN Y FACT S

• Combined storage space of 420,000 square feet • Pallet Capacity of 30,000 • POKKA has a truck f leet of more than 50 vehicles • International business across 40 countries • POKKA canned coffee was the first product to be made in Singapore in 1977

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P O K K A P T E . LT D .

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accurate in what they do.” Going

rather than simply accepting annual

forwards, Macaskill says this will be

price increases. “We don’t need the

further supported by the re-imple-

best technology to achieve these

mentation of POKKA’s ERP system

gains,” he reasons. “It’s about get-

and adding technology systems such

ting back to basics, because supplier

as WMS and TMS to further auto-

management is so important.

mate and improve efficiency across

Communicating with them about

the value chain.

the latest trends can help us understand what’s happening in

COLLABORATION BREWS INNOVATION

Thailand, Indonesia and beyond.

Macaskill applied the same approach

We’re going to start working more

to the procurement of packaging and

on these collaborative projects

raw materials to ensure POKKA was

when we set up our innovation

getting the best deal from suppliers,

team at POKKA, which will include

suppliers joining our brainstorming

1) Find the Money: Understanding

sessions because they come with new

current spend with a data driven

ideas for raw materials and concepts

approach to find untapped savings.

2) Get the Money: Tightly controlled

for future products.”

This back to basics approach

strategic sourcing projects with

lies at the heart of Macaskill’s view

clear accountability and targets.

on the modern, rapidly evolving

3) Keep the Money: The right infra-

procurement function. In such an

structure and processes need

environment, he believes that work-

to be put in place so savings

ing with stakeholders on the four key

stay “saved”.

elements of procurement transformation are essential.

4) Optimise: Tax optimisation to sustain the realised savings

E XE CU T I VE PRO FI LE

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Rex Macaskill With a career spanning 20 years in manufacturing, distribution, supply chain and strategy consultancy, Rex brings an impressive array of cross-functional talent and experience to the Group. His background in engineering, operations, business administration, strategy and finance combines state-of-the-art knowledge across the full spectrum on the business process from starting new businesses, to building growth markets and turning around loss-making concerns.

Before joining the Group, Rex served as Director of South East Asia Consulting arm with PricewaterhouseCoopers South East Asia Consulting and Strategy, where he was involved in providing consultancy in various areas including supply chain, strategy, corporate and digital transformation.

Having lived and worked in eight countries, Rex is firmly in touch with the global and regional nuances that drive good business from US to Vietnam, and beyond. w w w.po k ka . com . s g

P O K K A P T E . LT D .

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He explains that the role of procure-

“We’re working with partners like

ment is now viewed as a vital function

Tetra Pak on trial runs with new

that is essential for supporting busi-

product development,” Macaskill

ness goals. As such, the procurement

continues. “We have a good rela-

function has shifted from one centred

tionship and use their machines at

around just purchasing to strategic

our factory in Malaysia where we’ve

procurement, which encompasses the

addressed quality issues. The big

management of end-to-end supply

topic is sustainability; we’re looking

chains, proactively managing key cat-

at solutions to reduce plastic straws

egories, using automation and e-tools,

in our Tetra Pak products and offer

and procurement professionals acting

a paper alternative but at the moment

as highly skilled relationship managers.

the issue is cost.”

“ A focus on Procurement basic principles has led to a significant improvement of margins” — Rex Macaskill, Group Chief Supply Chain Officer, POKKA any out of stock issues and not to mention unnecessary handling and transportation costs. We aim to rebuild our central warehouse into a multiplestory logistics hub by 2023. We’ll need to go through several phases to merge our warehouses for manufacturing and distribution together. We will implement a warehouse management system (WMS) and a transport

SUPPLY CHAIN GAIN

management system (TMS) to help

Macaskill is excited about POKKA’s

us run the whole operation efficiently

new partnership with a 3PL consult-

and cost effectively. We want to

ant. “This will help us to transform our

deploy data analytics to better under-

supply chain in terms of warehouse

stand the behaviour of the customer

and distribution management,” he

and the delivery process, so that we

says. “Currently we have five different

can bring in AI to predict when cus-

warehouses in Singapore to manage

tomers will order, as well as what

our packaging materials, raw materials

they will order.”

and finished goods. Our objective is to

Building on that new supply chain

have one warehouse as our distribu-

approach, POKKA plans to “convert”

tion centre which will help us avoid

delivery drivers into salespeople over w w w.po k ka . com . s g

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ESTD 1980

We’re passionate about our work. We exist to excellence the built environment, and to make the process enjoyable for everyone.

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1977

Year founded

420,000 sq. ft

Storage space with separate racking systems

2000+

Vending machines in Singapore

50+

Number of trucks in fleet

RECRUITMENT CHALLENGES Recruitment in Singapore represents a challenge for Macaskill and his team.

“Singaporeans don’t always like to do the lower-skilled jobs,” he says.

“However, the government is introducing new quotas on the number of foreign workers allowed. In 2019, for example, for the service sector, the figure stood at 40% of the workforce; this has reduced to 38% in 2020, although our understanding is that the government aims to reduce this to 35% in 2022. In manufacturing, the figure stands at 60%, which helps us.

However, changes will actually force companies like us to move towards more automation, therefore we will need to get higher skilled people who

the next three to five years. “Our

will be predominantly Singaporean or

truck drivers make deliveries to cof-

a Permanent Resident of Singapore

fee shops and other market outlets.

(Singapore PR). The challenge will be

We’re looking at a more automated

to upskill the native workforce to meet

system where predictive analytics will

the needs of digital transformation.”

help us load each truck with the deliveries outlets need, while the driver

PLANNING FOR SUCCESS

can check inventories on a mobile

POKKA’s factory in Malaysia is in a

device and take new orders on the

free industrial zone and is only allowed

spot. This way, the truck becomes

to export 20% of its products from

a mobile warehouse.”

Malaysia. Macaskill explains that he w w w.po k ka . com . s g

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P O K K A P T E . LT D .

has been working with the Malaysian government to avoid the payment of duty on that 20% so that the impact on margins is lessened and profitability is improved.

POKKA’s Group Chief Supply Chain Officer has also been looking at transportation modes to reduce costs. “I’ve been working with suppliers to provide us with double decker trucks which can load almost double the quantity of product – up from 22 pallets to 40 – which also brings cost savings from 18

a cost-per-unit perspective.” At the company’s main warehouse in Singapore, this approach is also being applied to forklift trucks. These are

much more cost effective for imported

being switched for a different model

raw materials in the free industrial

capable of a tighter turning circle

zone. For example, the company is

which allows the space to install

saving on core commodities like sugar

another row of racks in the warehouse.

this way. “A focus on Procurement

“This means that we can improve our

basic principles has led to a significant

warehouse utilisation (number of pal-

improvement of margins,” he confirms.

lets per square meter) with more than 20%, leading to significant cost savings,” explains Macaskill.

POKKA is also benefiting from new

2020 VISION: MOVING TOWARDS A CIRCULAR ECONOMY “How sustainable can we become

savings via procurement. Macaskill

while managing rising costs?” asks

is leveraging the distance between

Macaskill. It’s the biggest trend he’s

Singapore and Malaysia, which is

seeing in the industry and one that

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is at the forefront of POKKA’s plans.

but the government needs to lead

“It’s one of the reasons why we’re

because currently it’s too difficult to

replacing our existing production lines

collaborate with your competitors.”

for PET bottles,” he says. “We aim to

Macaskill urges the need for a uni-

reduce the PET bottle weight by over

fied approach as lasting progress

20%. That’s a massive reduction in

cannot be made by working in silos.

the use of virgin resin to make those

“We can learn a lot from Japan’s com-

PET bottles, as well as the cost of the

mitment to quality; we need to be more

PET bottle. We’re also working with

standardised in our approach and

the government to improve recycling;

deliver the quality our customers in

that’s a supply chain topic that needs

Singapore, and beyond, are willing

to be addressed on a national level.

to pay for.”

I believe if we can do this properly, we can create a circular economy, w w w.po k ka . com . s g

POKKA PTE. LTD. 39 QUALITY ROAD 618810 SINGAPORE

P0WERED BY

T + (65) 6395 9229

www.pokka.com.sg