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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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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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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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