Latitude Wines Scales Logistics with a Custom ERP System
The California-based wine import and export company developed a Mendix-based ERP system to digitize supply chain processes and improve customer service.
If you turn over a bottle of Merlot in your local US-based grocery store, you might see a label that reads ‘Imported by: Latitude Wines, LLC.’ This bottle likely crossed many borders and passed rigorous requirements to reach that shelf, as the alcohol and logistics industries are highly complex in their own right. Navigating both industries requires a deep level of domain expertise, so global distributors looking to move wine and spirits to the United States turn to organizations like Latitude Wines.
Latitude Wines is a logistics company that imports roughly 1.5 million bottles to the United States each year working with over 200 suppliers. They provide tools for their customers to manage their wine distribution network and financial transactions – all with the goal of “connecting wine and spirit logistics to the digital age.”
“What we’re really trying to do is to digitize as much of our supply chain as possible,” said Latitude Wines’ founder, Philip Burkhart. As a small business looking to achieve enterprise-level disruption in their industry, Latitude Wines adopted the Mendix platform and enlisted Brook Trout Partners to develop a custom ERP solution which would improve their efficiency and transparency as they grew.
Combatting Paper Processes and Siloed Systems
Burkhart and his founding team saw an opportunity to streamline the alcohol logistics market back in 2004. “There are oceans and oceans of wine in the world,” said Burkhart, “But it’s very difficult to move around because it’s regulated – it’s a controlled substance.”
Retailers have a need to move and purchase wine, particularly in the instance that they are building their own private labels, but going through the standard wholesale channels can be rigid and limiting. Latitude Wines was founded to offer retailers an alternate way to purchase from global suppliers in smaller quantities and with greater variety.
In their early years, Latitude Wines experienced startup growing pains. “Everything we did was on spreadsheets, from purchase orders to tracking shipments,” Burkhart said. “We weren’t even using Google, just Microsoft. We used stacks of paper, but that’s how we got our start.” The business itself was filling a gap in the market, and thriving as a result, but the technology behind it couldn’t keep up.
“We couldn’t continue to do paper. We’d never scale our company if we didn’t apply technology to it. We wanted to figure out how to automate what we needed,” he added.
Burkhart leveraged TrackVia, a small workflow automation platform, for a short period and quickly outgrew the solution. The team looked at other commercial off-the-shelf (COTS) solutions, but the double-edged sword of disrupting a category meant that these options could never quite meet the unique process requirements within Latitude. Building a custom platform was their best path forward, but doing so with traditional development would be a massive investment for a company Latitude’s size – and a much greater risk if it didn’t work.
In 2019, Latitude Wines began investigating the potential for low-code to digitize their back office and customer-facing logistics processes. This would enable them to:
- Deliver enterprise-grade software with a lean IT team
- Respond quickly to business or industry changes and outpace competitors
- Retain control of their IT landscape and reduce dependency on third-party providers
Latitude evaluated two leaders in the space, Mendix and OutSystems, ultimately deciding on Mendix due to its predictable pricing model and the partnership throughout the sales process. “I saw it as a multi-year platform investment,” explained Burkhart. “And talking to references who were using Mendix helped a lot.”
Latitude Wines began development of their custom ERP solution, VinPort, in 2019. To accelerate their delivery, they enlisted the support of a US-based expert implementation partner, Brook Trout Partners, to stabilize the system and deliver on a series of enhancements to support new business requirements in the coming years.
Delivering Supply Chain Transparency
Today, VinPort is an end-to-end logistics solution used by Latitude Wines’ employees, suppliers, and customers. The solution centralizes key activities in the supply chain such as creating a purchase order, building a container of wine, and tracking the progress of a shipment. Through integrations with customer, supplier, and third-party systems, VinPort offers users a transparent view into details such as pricing and order progress from start to finish.
One of those key people is Mike Kumpf, CEO of Brook Trout Partners, who has been developing solutions in Mendix since 2008 and is one of the world’s few Mendix MVPs. Kumpf’s deep knowledge of what’s possible in Mendix has helped the Latitude Wines team deliver a more stable and scalable version of VinPort since 2020.
“We use integrations to get orders from the customers which saves time on data entry for Latitude’s team,” said Kumpf. “The orders team is automatically notified of a new order and can then initiate the purchase with the supplier also using VinPort, which will either automatically generate an email or a notification to the supplier’s system depending on what they use.”
“[Customers] can see where the container is once it’s been built and ordered, and when it will arrive,” added Burkhart. “That’s important for retailers because, when the supply chain is as volatile as it is, they may have a marketing program to sell Rosé in the summertime, so they need to make sure it will arrive at the right time for the campaign and distribution.”
Part of the flexibility offered by Latitude Wines that retailers are hard-pressed to find elsewhere is the ability to mix and match pallets of wine in their container shipment, similar to a ‘pick and pack’ case at the individual consumer level. This inevitably introduces more dependencies and complexity, which Latitude has been able to manage seamlessly within VinPort.
“Mendix allowed us to create a complex set of business rules around what the retailer can and can’t put into a shipment. Once they pick a certain supplier or type of wine, the system automatically limits what else they can add based on weight, or when the wine will be ready to ship,” said Burkhart. “If one type of wine will take six weeks to be ready to ship, that will slow the entire container down. We show them that information so that they can pull that one off and swap in something else if they’re working against a time constraint.”
Control While Clearing Customs
“A key and extensive integration point is with US Customs. When a shipment is a few days away from arriving at the port, a lot of filings need to take place with customs and border protection,” said Kumpf. The customs clearing process is one that most organizations like Latitude Wines would manage with spreadsheets.
“We have that data in our system and write the API to third-party software that clears Customs for us. That third-party system costs us about $400 a month. We used to pay $250,000 annually to a Customs broker to do that for us,” he added.
Additionally, the out-of-the-box security of developing VinPort in Mendix readily meets the requirements of third-parties who integrate with stringent government systems, while also reducing the need for security experts and resources on both the Latitude Wines and Brook Trout teams.
Adapting to New Business Needs
Working in an agile way while developing in Mendix has been critical for Latitude Wines to get new platform enhancements or ideas to market quickly. Brook Trout Partners and Latitude work in two-week sprints and have done so to deliver a series of new features in VinPort since 2020.
In one instance, Latitude wanted to expand their operations from focusing largely on their import business to partnering with an organization that would augment their services to include export capabilities. “We added onto the VinPort platform so that Latitude could work with this export company, and it benefited both organizations,” said Kumpf.
“Another feature we added in the recent past is the ability to work with a company that does bulk wine shipments. While much of the business is focused on the shipment of cases, Latitude established a new relationship with a customer that is ordering wine that comes in huge 20,000-liter tanks,” he added. This update to VinPort took Kumpf and his team just 4 weeks to deliver and was a key proof point in the adaptability of low-code solutions to support a new business opportunity.
During the pandemic, supply chain volatility made the cost of shipping incredibly unpredictable. In order to continue providing their customers with the most accurate information, Brook Trout built in a flexible pricing feature so that Latitude’s team could override average shipping costs and accurately reflect the current or future price point to avoid any surprises for customers down the line.
In another instance, Latitude was converted from Latitude Wines, Inc. to Latitude Wines LLC. Every alcoholic beverage imported to the US must be registered with the federal government using a Certificate of Label Approval (COLA) reflecting the accurate company name. Latitude had 12 months to reapply 10,000 labels for government approval. The original plan was to track the relabeling project with a spreadsheet, but Brook Trout created a Mendix workflow in VinPort that could be managed by an offshore employee instead. This put the project on track for completion in just 10 months, leaving time to spare.
Scaling Operations Through Automation
Adopting a low-code platform to build out a robust ERP system has empowered Latitude Wines to:
- Reduce their dependency on third-party providers and total cost of ownership thanks to the built-in security and flexibility of Mendix
- Increase productivity and efficiency for their employees
- Respond quickly to shifting customer needs and preempt their competitors in the market
“There are other companies that do things similar to what Latitude does, but to support the same volume they would probably need two to three times the amount of people on staff. Their Mendix-built platform is a big productivity engine,” said Kumpf.
For Kumpf and the Brook Trout team, that is the payoff of leveraging the enterprise-grade capabilities of Mendix for small businesses. “We can make that level of impact on their business,” he added.
In terms of what’s next for Latitude Wines, Brook Trout has a roadmap to continue adapting and accelerating repeatable business processes with the Mendix Workflow capability, which will help to get Latitude “even more productive than they are currently.” It’s not just Kumpf’s observation as a partner, but Burkhart also attests to the greatest benefit Mendix provides for a small business: the opportunity to scale out business operations without taking on the overhead of more staff.
“I can scale Mendix, and that’s really what allowed us to grow. We went from importing one container to importing 1,500 containers of wine, which is almost 20 million bottles of wine, and getting them across the United States through eight different ports. We started out with three people, and we ended up with thirteen,” said Burkhart. “We wouldn’t be able to do this without technology.”
Disrupting the alcohol industry was an ambitious undertaking, but it’s fair to say Burkhart and the Latitude Wines team have achieved tremendous results in just a few years. “If you really want to disrupt something and you’re not a technology company that can invest a whole lot in building software, Mendix is a great solution,” Burkhart explained. “That’s what we did. Mendix is an advantage for companies like ours that want to be at the forefront of emerging technology.”