Case Study: LCB Vinotheque

Vinotheque is a warehousing solution located in Burton upon Trent. Its 7,000 clients – both fine wine merchants and private collectors – are based in over 70 different countries worldwide and collectively store over half a million cases at the facility. It is the responsibility of Vinotheque to receive, store, move and ship these high-value wines safely and efficiently as they move in, around and out of the warehouse.

”Liv-ex is an excellent enhancement to the services we currently offer, and a function requested by 98% of our private customers as an aid to assist them in monitoring their fine wine investment
Jane RenwickDirector, LCB

Before LWIN – The problem with wine names

Time-consuming processes, risk of error

Inside the warehouse, stock arrives, sometimes changes ownership, and finally leaves after being sold or dispatched to its owners. At each of these stages, information passes between people and systems. Ensuring that this happens accurately and efficiently is essential in ensuring that operations run smoothly. Mistakes and uncertainty can, at best, be time-consuming and disruptive. At worst, they can be extremely expensive.

Fine wines have, historically, been referred to inconsistently across the supply chain. Producers and traders have prioritised, abbreviated or contracted different parts of wine names depending on what they feel is most important – or what makes the most sense to them. The same bottle might reasonably be described as “Grange” or “Penfolds Grange”.

People are often able to understand these wine names, though the inconsistency carries risk of error and miscommunication. It is impossible for computers to understand when names are keyed in differently. As a result there is no way to automatically transfer the information between systems.

Because of this, wine names needed to be manually re-keyed each time a case changed ownership. Although there are no records of the exact amount of times that the wine name would be keyed, one study conducted at London Metropolitan University suggested that wine names are re-keyed sixteen times on average as they move through the supply chain. Many of these re-keys happen when wines are within the warehousing system. It can be a tedious and time-consuming process – and every time the name is re-keyed, there is a risk that it is entered incorrectly.

Challenges with reporting

An additional side-effect of the inconsistent naming was the difficulty in calculating the total quantities of each wine held by clients. Because a computer system interprets “Château Montrose” and “Montrose” as two different wines, a stock summary might have shown 12 cases of one and six of the other. Without a common language, a computer is unable to tell a customer that he or she really owns 18 cases of the same wine.

An opportunity for improved customer service

Towards the beginning of 2015, a customer survey revealed that 98% of Vinotheque customers were interested in seeing the current market values for wines they have in storage.

This discovery coincided with an upgrade of Vinotheque’s warehouse stock management system, Ontech Vision.

The Solution - LWIN

With wines being transported and traded from around the world, Liv-ex had previously experienced the same problems as Vinotheque. Its solution, the Liv-ex Wine Identification Number (LWIN), aims to standardise wine names in such a way that information can be transferred between different computer systems automatically. It is freely available under OpenData licence terms.

By identifying each wine with a unique number, it is possible to ensure that all parts of the supply chain – and all systems – are speaking the same language.

How Vinotheque implemented LWIN

The introduction of LWIN was initiated by Vinotheque and brought about by a collaboration between the Vinotheque team, developers at Ontech Vision and Liv-ex.

The stock held in Vinotheque – a long list of wine names – was first matched to LWINs by Liv-ex. Ontech developers were able to incorporate these into their Vision warehousing software, and Vinotheque developed new processes for handling and monitoring stock going forward.

With LWINs inside their new system, it was also possible for Vinotheque to connect with Liv-ex to find the current Market Prices of the stock that they hold. With this, it became possible to add valuations to customer inventories.

”The wine descriptions on our customers’ inventories are now completely consistent – it looks far more professional
Jane RenwickDirector, LCB

The Results

Improved internal efficiency

After introducing LWIN to its systems, the team at LCB Vinotheque reported a significant increase in internal efficiency. It removed the need to rekey wine names as information passed between different systems – because the pieces of software were all speaking the same language.

The consistency in the wine names also had a number of additional benefits. With “Château Montrose” and “Montrose” now being counted as the same product, it became easier for the customer to identify the exact amount of each wine owned by them; no more instances of the same wine appearing on the same report twice with different names.

This benefit extended to customer invoices. A list of LWINs on a customer invoice would be unhelpful – but each LWIN is also associated with a standardised wine name that can be displayed on inventories.

“The wine descriptions on our customers’ inventories are now completely consistent – it looks far more professional”, says Jane Renwick.

Better communications with suppliers

Several of Vinotheque’s suppliers – fine wine merchants – had already adopted LWIN into their systems. With the new system in place, these merchants were able to connect directly to Vinotheque and share information on the movement of stock without needing to re-key wine names at different stages.

Happy customers with custom valuations

With LWIN in its database, Vinotheque is now able to connect directly to Liv-ex to produce valuation reports on the wines in its storage system.

This benefit is important to their private collector customers. Thanks to receiving valuations from Liv-ex – an independent source – they are now better informed about the value of their wines, and are better placed to make buying and selling decisions. As Sales Director, David Hogg explains: “This offers transparency to our customers.”

The ability to produce valuations is also beneficial internally. Hogg adds: “Not only does valuation support our customers but enables us to produce accurate up-to-date valuations of the stock we are storing”.