Wine Business Data Models

Entity-Relationship modelling is a simple but powerful diagramatic technique that may be used to describe the data environment of a wine business. Business processes, policies, procedures, and even regulatory requirements may be captured in these logical models as long as one is able to identify all the data entities and their logical relationships. Entity-Relationship modelling is useful to business managers in many different ways as enumerated below:

• Insight
  First, these diagrams may be used to gain insight into the decision matrix of the firm at each level and the information needs of key managers in all phases of wine production from the vineyard to the marketing department.
• Basis of Design
  Second, the diagrams also serve as a “basis of design” for wine business information systems. Information systems based on these models are more likely to support the information needs of the firm. The match between information needs and information system design increases the chances that the information system will support decision-making by providing the kind of reports needed by managers and required by regulators.
• Basis of Comparison
  Third, the model serves as a basis for requesting and comparing vendor designs when the firm outsources the design of the winery information system. All vendors receive a consistent set of specifications and are their bid may be compared on the same basis.
• Accounting and Control
  The model may be implemented as an accounting system for costing and auditing, and ultimately to generate the information set for constructing BATF and financial reports.

A BULK WINE DATA MODEL

To demonstrate the method and its application, we present a bulk wine model for a generic winery which has been put together as a synthesis of the wineries I visited in the North Coast appellation of Calfornia during the data-gathering phase of this research. During this phase of the project I was able to interview approximately fifty key players in the industry including vineyard managers, winemakers, winery MIS personnel, winery marketing and finance personnel, wine industry accountants, Federal regulators, and educators. The generic winery and its information environment was designed with their assistance. The wine business may be thought to exist in three distinct but inter-related sub-systems that may be described as the “fruit” phase, the “bulk wine” phase, and the “case goods” phase. These sub-systems may be described as follows:

SUBSYSTEMS OF THE WINERY MODEL

• Fruit System
  The fruit system deals with the grapes prior to crush. Agriculture, harvest, acquisition, sale, pricing, grape contracts, and forecasts of demand of each varietal are the key areas of managerial decision making in this phase. Linkages with other phases are due to demand forecasts, winery tankage and barellage capacity, harvest and crush scheduling, long term contracts, vineyard designated labelling, and product pricing and positioning. The primary decision makers are vineyard managers, winemakers, contract managers, and marketing managers.
• Bulk Wine System
  The bulk wine system deals with a liquid or slurry phase after crush and before bottling and paying federal alcohol taxes. Once alcohol is produced during fermentation the product becomes a controlled and regulated commodity. Liquid product storage, transfers, losses, quality, chemical state, purchases, sales, and inventory accounting are some of the areas of managerial concern. The winery may simultaneously buy and sell bulk wine in addition to the better understood business of case goods sales. Most of the productin activity of the winery is concerned with the bulk wine phase which ends with the production of a liquid product blend. It is the “blend” that is bottled as product and once bottled the product changes from “blends” to “case goods”.
• Case Goods System
  Bottle-aging is the only concern of the winemaker in the case-goods phase. Once the winemaker “releases” a product a new decision matrix is activated. Regulation, taxes, storage, transfers, sales, marketing, exports, customer relations, distributor accounts, promototions, and financial accounting are important managerial activity in the case goods phase of the wine business. Sales tracking produces demand data and new forecasts that provide backward linkages to the fruit phase for contract and varietal decisions that must be based on 5-year snd 10-year sales forecasts.

ELEMENTAL PARTS OF THE RELATIONAL DATABASE

To construct the data model we further divide each of the three phases of the wine business into “elemental” parts. Each of the elemental parts is then “constructed” by identifying the entities and their relationships. The data model of each phase is produced by synthesizing the models of the elemental parts. Finally, the model of the wine business is completed by identifying the relationships that form the linkages between the three phases. The modelling process is presented as a series of Power Point slides. The slides are presented below in sequence.

With thanks to the experts in the industry who took time out to help me with this project and to some very bright students during the semester who contributed by actively participating in the project.

RELATIONAL DATABASE DIAGRAMS