{"id":18552,"date":"2016-11-18T16:56:50","date_gmt":"2016-11-18T21:56:50","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/hacking-the-tom-beer-challenge\/"},"modified":"2016-11-18T16:56:50","modified_gmt":"2016-11-18T21:56:50","slug":"hacking-the-tom-beer-challenge","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/hacking-the-tom-beer-challenge\/","title":{"rendered":"Hacking the TOM Beer Challenge"},"content":{"rendered":"

\"taps-with-hand-background\"<\/a><\/em><\/strong><\/p>\n

\u201cImagine if HP guessed at what Best Buy needed to fill its shelves on any given month without talking to the company or looking at any hard data,\u201d<\/em><\/strong><\/p>\n

-Steve Hershberger,<\/em><\/strong> Chairman & CEO of SteadyServ Technologies.<\/strong><\/p>\n

\u00a0<\/strong><\/p>\n

While we are all well acquainted with the TOM Beer Challenge and the famous Bullwhip Effect, I bet that most of you did not know that this game was developed at MIT back in the early 1960\u2019s \u2013 shocking! Similarly, I also bet that most of you aren\u2019t aware of SteadyServ Technologies, the latest Internet of Things (IoT) startup attempting to solve this real-life problem.<\/p>\n

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Inefficiencies in the Beer Industry<\/u><\/strong><\/p>\n

\u201cOur inventory management systems are very lacking. In many instances, we don\u2019t know what we have, we don\u2019t know how much we sell, and we don\u2019t know when we sell it. We lose sales because our customers want what we don\u2019t have.\u201d<\/em><\/strong><\/p>\n

15 percent to 20 percent of every typical keg delivered to retailers ends up as waste. Considering that draft beer is by far the largest contributor to a bar’s margins and that a total of $23 billion worth of draft beer is sold each year at 340,000 locations in the U.S., a significant incentive exists to improve operational efficiencies.<\/p>\n

Studies have also demonstrated the importance of maintaining beer inventory in bars level – when a patron\u2019s beer choice is not available, they tend to drink 1\/3 less beer.<\/p>\n

If you were a bar manager, how would you know how much beer to order from your distributor? The current practice requires the bar manager to head to the refrigerator to count kegs. Since he is unable to see how much beer is left in each keg, he must lift each keg to see how full it is\u2014essentially making the ordering process a guessing game. In some instances, this back-breaking task of assessing inventory in order to place their orders takes a minimum of two and a half to two hours a week, per location. In practice, if the beer rep doesn\u2019t get the order in time, the rep will place it for them by guessing.<\/p>\n

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Introducing the SteadyServ iKeg<\/u><\/strong><\/p>\n

How does this IoT technology work?<\/p>\n

Kegs are first tagged with a radio-frequency identification tag that has information on the keg’s contents (brewery, type of beer, volume, age). Once the keg is delivered to a bar, it is placed on a special sensor which measures the keg\u2019s weight. As the beer gets depleted, real-time data is automatically aggregated and sent to the cloud where it is accessible to bar managers and distributors via the iKeg app interface. This technology takes the effort and guesswork out of assessing inventory, and by knowing exactly when a keg is going to run out, this eliminates the dual problem of unhappy customers and scrambling bartenders when a keg \u201ckicks\u201d. Customers pay $30 a month and up per location for access, plus about $4 a keg for the hardware.<\/p>\n

\"ikeg\"<\/a><\/p>\n

Click here<\/a> for a promotional video featuring the SteadyServ iKeg.<\/p>\n

In addition, when combined with sales data, anonymized competitor data, and consumer demographic data, this technology provides powerful analytics capabilities:<\/p>\n