Heineken HOPS - Operational Planning System

explanatory Essay
1219 words
1219 words

Heineken HOPS (Operational Planning System)

Case Analysis


This case describes how Heineken USA's in order to gain market share, it needed to achieve a better responsive to the market demand utilizing an internet-based system called HOPS (Heineken Operational Planning System) to allow the parent company to produce the beer closer to the time when they need to deliver it, so the customer receives a fresher product. The implantation of this new system enables Heineken USA to achieve 50% reduction in the lead-time from order to delivery and 10% increase in sales, part of the major success was the good use of IS, which can dramatically improve customer relationships and cut costs.


Heineken N. V. was founded in 1592 in Amsterdam. The Netherlands Nowadays Heineken N. V. is currently the world's second largest brewer, trailing only U.S. based Anheuser-Busch. It leads the European market with a 60% market share and it is the second imported beer in the United States, following Grupo Modelo's Corona beer, since 1998. Fierce competition from the imported segment contributed to the decline in Heineken sales and as a result of it, Heineken N. V. bought back the distribution rights and established a wholly owned subsidiary in White Plains, N.Y.; in order to achieve a new market push in the United States (Roberts, 1999).

Heineken operations are run from the New York headquarters, where data center plays an important role because it is responsible for running the day to-day operations of the U.S. business. The supply chain from Heineken starts with the brewed and bottled in The Netherlands and later on is shipped via sea to various demand points in the U.S., after distributors place orders and the shipment leaves the closest demand point and is quickly trucked to the distributor. Finally, distributors then deliver the beer to its final destination at restaurants, bars and stores. (see Exhibit 1 for Beer Supply Chain).

In this case, Heineken long lead-time from order to delivery prohibits the company from being flexible and adapting quickly to market demand fluctuation. Therefore the implementation of an innovative Internet system called HOPS, would improve its supply chain performance by reducing the lead-time from order to delivery. In 1996, distributors and sales representatives had to plan out orders three months ahead of delivery, it was daunting task for them to predict the factors that would affect the product sales such as weather, special promotions, and local demand fluctuations in advance.

In this essay, the author

  • Explains how heineken usa achieved 50% reduction in the lead-time from order to delivery and 10% increase in sales through an internet-based system called hops.
  • Explains that the lead-time on order delivery was cut from 10 to 12 weeks to an average of 4 to 6 weeks.
  • Explains that inventory was reduced from 45 to 30 days and sales have soared over the years.
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