Oliver Winery Information Systems Research Project

Term Paper for Organizational Informatics at Indiana University instructed by Dr. Younei Soe.

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Jongwon Lee | Deanna Hedges | Rebecca Haussin
Indiana University

Abstract

Oliver Winery is located just north of Bloomington, IN, and has become one of the largest wineries east of the Mississippi River (Hurt, 2019). This scale of operation would benefit from the implementation of information systems. An interview conducted with one of the managers at Oliver in the Tasting Room led to the discovery of some cultural, management, and technology problems that exist at Oliver. This paper examines the identified problems with an Information Technology (IT) and Management Information Systems (MIS) approach and provides solutions that Oliver Winery can implement in the Tasting Room to optimize operations.  

Introduction

Oliver Winery was founded in 1972 by Mauer Law Professor William Oliver in Bloomington, IN. Since then, Oliver has grown tremendously to be the largest winery East of the Mississippi River. The majority of Oliver’s sales are sweet wines that are sold wholesale to 38 different states. The physical winery location sells a much wider selection of wines, including their Flight Series, Creekbend Series, and Pilot Projects. The Creekbend Series is of note because these wines are made from fruit grown in Indiana at Oliver’s own vineyard. This vineyard is about 4 miles away from the winery and has about 54 acres of grapes planted, including varietals such as Chambourcin, Catawba, Vignoles, Traminette, and more. By selling these wines exclusively at the Oliver Tasting Room, the organization can better control the small amount of wine they are able to produce and provide a unique and special experience for visitors. The Tasting Room acts as both the public face of the winery and proving ground to help gauge interest in new wines.

Oliver Winery is focused primarily on creating high-quality wines with high-quality fruit. Their winemaking philosophy is focused on the quality of the fruit and maintaining the taste of the fruit throughout the winemaking process. They also follow four core values: respect people, expect quality, think differently, and get stuff done. One goal the company has been reaching is to expand from a regional staple to a national household name. The Tasting Room, the focus of our project, is more oriented towards customer experience and satisfaction. The Tasting Room is a place where customers can discover new wines, spend time with friends and family, and grow a relationship with Oliver Winery which will contribute to increasing the brand value and promote sales in various routes.

We chose to research the Oliver Tasting Room for this project because one of our group members, Deanna Hedges, is an employee in the Tasting Room at Oliver and has knowledge and access to the organizational processes at this business. She especially has expertise in using WorkJam, a Human Resources Information System (HSIS) that we analyzed for this project.  We were also compelled by the IT utilized by the winery and the interesting business structure that is somewhat split between Tasting Room sales, e-commerce, and wholesale. Since we have greater access and knowledge of the Tasting Room, we focus on that area of the organization for this project.

Research Questions

Based on preliminary research on the company and its structure, we developed three research questions to help guide the future investigation. Our research questions are as follows. 

Investigating the usage and impact of the WorkJam app will give us a greater insight into Oliver’s management and culture. We will be examining how Oliver utilizes information systems in their supply chain and where opportunities for implementation exist. Lastly, we will look into what other IT Oliver is utilizing for management and sales optimization and potentially find out what Oliver should invest in and implement to solve Oliver’s current problems.

Methods

To evaluate the MIS used by Oliver Tasting Room, we took a multifaceted approach. We did surface-level research to develop potential research questions, heavily relying on Deanna’s experience with the organization. Then, we deepened our understanding of the organization’s operations, problems, and technology use by interviewing Ben Smith, the Tasting Room Sales Manager. The results of this interview can be found in the appendix. After the interview, we finalized our research questions and conducted a literature review, using information from both our textbook and outside sources. Finally, we synthesized the research to create this analysis and formulate recommendations to improve Oliver Tasting Room’s applications of IT. 

Problems

From the interviews and personal work experience from Oliver Tasting Room, we were able to diagnose problems the company has. Oliver Tasting Room currently has management, cultural, management, and technology problems. The management problems will be addressed in the first research question about organizational culture. WorkJam has been a great tool to improve the relationships between management and the part-time employees, but the functionalities are limited which leads to poor interoperability between different departments. The problem identified from the interview regarding the supply chain is that there is little information available to assist in identifying areas that can be optimized. They also have inventory management problems for the products that are not handled with Commerce7, such as cheese, silverware, and souvenirs. Finally, their choice of constructing wine tasting and sales management is not data-driven. 

Theories, Concepts, and Applications

Research Question 1

The first research question is evaluating WorkJam, so the concept we studied for this question is organizational culture. We chose this concept because we thought that WorkJam likely affects organizational culture due to the social media and messaging aspects of the technology. In our textbook, “Managing Information Systems”, organizational culture is defined as a “set of assumptions about what products the organization should produce, how it should produce them, where, and for whom”  (Laudon and Laudon, 2021). In short, organizational culture is a collection of assumptions about how the organization works. WorkJam is specifically focused on frontline workers and has expanded recently to meet the needs of the pandemic. For reference, some other companies that use WorkJam to manage frontline employees include Shell, Verizon, and Target (Sawers, 2020). The implementation of WorkJam dramatically changes the way many human resources functions were done, so it is a great subject to evaluate culture within Oliver Winery.
 

Research Question 2 

The second research question focuses on evaluating the supply chain of Oliver Winery from winemaking, retail, and wholesale perspective. The concepts applied to this research question are supply chain management systems and e-commerce models. In the textbook ‘Management Information Systems’ both concepts are categorized under Key System Applications for the Digital Age in Chapters 9 and 10 respectively. The three strategies that were examined for supply chain management systems are just-in-time, bullwhip effect, and the pull-base model. The first strategy is characterized by a producer having the “perfect information about exactly how many units of products customers wanted, when they wanted them, and when they could be produced this could be implemented” (Laudon and Laudon, 2021). The second strategy that was examined for Oliver Winery is defined as “information about the demand for a product gets distorted as it passes from one entity to the next across the supply chain” (Laudon and Laudon, 2021). The final strategy, the pull-base model, for supply chain management systems has replaced earlier approaches in the application and is characterized to show how “demand-driven or build-to-order model, actual customer orders or purchases trigger events in the supply chain” (Laudon and Laudon, 2021). When looking at e-commerce models for Oliver Winery the concept that was applied from Chapter 10 of Management Information Systems is disintermediation. This concept is defined as the “removal of organizations or business process layers responsible for intermediary steps in a value chain” (Laudon and Laudon, 2021).

Research Question 3

Oliver Tasting Room’s inventory management problems can be solved with Computer Vision (CV) warehouse management. CV is a technology in which a program views and extracts information from real-world images and performs image processing and pattern recognition. (Laudon and Laudon, 2021) The paper by Gregory et al. explains the up-to-date, efficient process of automatic inventory management using label images. Manual inventory management can be inaccurate and costly, becoming more expensive as the inventory scale becomes larger (Gregory et al., 2021). Since the Oliver Tasting Room makes a vast amount of sales and continually runs out of inventory, they should enlarge their scale of production. Therefore, the inventory scale will grow and CV-based warehouse management will be effective as the business grows. Furthermore, since the CV is becoming more accurate, efficient, and practical, it is wise to invest in this as early as possible.

The concept of Knowledge Management Value Chain can be applied to solve Oliver Tasting Room’s data management problems. The knowledge management value chain consists of four steps: acquisition, storage, dissemination, and application (Laudon and Laudon, 2021). Since Oliver Tasting Room is at the early stage of knowledge management, it is recommended that they follow this concept for a better outcome.

Analysis

Research Question 1

WorkJam contains many functions, including surveys, quizzes, training, achievement badges, announcement channels, direct and group messaging, scheduling, and shift swapping capabilities. The announcement channels act similarly to a Facebook wall. Different employees have different levels of access to each channel. For example, as a Tasting Room Staff member, Deanna can view the “Hospitality” and “Events” channels, but cannot post within them. She can, however, post in the “We are Oliver Winery” channel, which is a social channel mostly used for things like posting pictures of the staff costumes on Halloween, winery-wide HR announcements, and pictures of sunrises at the vineyard. Employees can communicate with each other either publicly through these channels or privately through direct messaging.

WorkJam is also the tool employees use to submit their availability and call for time off, managers use it to build the schedules, and employees use it to view their schedules. One of the most important features of WorkJam is that managers cannot schedule an employee to work during a time that they are unavailable. Manager mistakes have declined with the implementation of WorkJam and the control individual employees have over their schedules has increased. Staff is also able to release a shift into the open shift pool to give the shift to another staff member. This has simplified the process of switching shifts. 

Our first research question was, “How do the multiple functions of the WorkJam app contribute to and impact the culture and operations of Oliver Winery?” Our interviewee, Tasting Room Sales Manager Ben Smith, was the perfect person to ask this question because he helped implement WorkJam and uses most of its functions daily to manage the employees in the Tasting Room. Prior to interviewing Dr. Smith, we expected that the channel function would be the most impactful on organizational culture since it is the most social and similar to social media. However, Dr. Smith assured us that the scheduling capabilities were the most transformational to the organizational culture. 

Before WorkJam, each employee would email their availability to the managers, a manager would spend a great deal of time sorting through emails and building a schedule in Microsoft Excel. Then, they would print the Excel sheet and post it in the Tasting Room. If there were any shift swapping agreed upon over email, someone would have to use a white-out and a pen to make the changes on the schedule sheet. With this system, it was easy for managers to make mistakes, schedule people for times they had called off, and schedule people too much or too little. If any mistakes were made, staff would be upset at the managers and organizational culture would suffer. The assumption was that if they emailed and called off for a certain day, then they would not be scheduled on that day. Culture declined when these assumptions were not met. With WorkJam, these assumptions are strengthened by the programming of the app that prevents manager mistakes and simplifies the scheduling process.

Research Question 2

The wine industry by law is required to operate as a three-tier system with the respective tiers being (1) the winery, (2) the distributor, and (3) retailers. In this system, the firms that exist in tier 2 hold more power over those in tier 1 and 3 because they choose which products from tier 1 are sold by tier 3. Due to the power dynamics, there have been more technologies implemented in tier 2 to optimize the logistics, which is why tier 1 becoming involved with forecasting market trends can increase their potential profits as they expand their own understanding of their data.

The first concept outlined for application is just-in-time which could assist Oliver Winery in their supply chain by providing information on the available inventory. Currently, as noted in the interview with Dr. Smith, the sales at Oliver are not dependent on optimization of the supply chain but rather on availability as they do not have a system for processing this information. If Oliver was able to implement a system for understanding the supply and demand of customers as applied to the supply chain for inventory in the Tasting Room, they could optimize this area and subsequently increase their profit.

The second concept examines how at various points in the supply chain there can be differences in demand, which can cause issues with the stockpile of inventory that is held at Oliver. Inaccurate information can cause minor fluctuations in demand for a certain product, which is amplified as one moves further back in the supply chain. This can have cascading effects. This issue in the supply chain can be tamed by reducing uncertainties about demand and supply when all members of the supply chain have accurate and up-to-date information. Through the interview with Dr. Smith, the issues that are identified as the bullwhip effect are an issue that Oliver faces in their supply chain for the Tasting Room. A different approach for utilizing an information system for the supply chain should be taken to rectify this issue at Oliver.

The third concept looks at how transactions produce and deliver only what customers have ordered to move up the supply chain from retailers to distributors to manufacturers and eventually to suppliers. In this model, only products that are needed to fulfill these orders move back down the supply chain to the retailer. Producers use only the actual order demand information to drive their production schedules and the procurement of components. Oliver could use this type of information system in conjunction with the collected customer data to influence their supply in inventory and optimize their supply chain.

The final concept of disintermediation allows Oliver to reduce the number of steps in the supply chain that they are from the customer which can be done through e-commerce. As noted, throughout the ongoing COVID-19 pandemic there has been an increase in wine sales through the Oliver website. Dr. Smith noted in the interview that wine sales are a complex process due to the differing legal requirements for alcohol sales in the many states in which Oliver operates. The continued ability for Oliver to sell directly to the consumer is an opportunity for Oliver to increase their retail sales, which optimizes their supply chain through a variety of tools that have already been noted, such as streamlining inventory in the Tasting Room. Our literature review conducted on wine supply chains focused on traceability throughout the supply chain and on innovative solutions for expansion. In the first paper by Mario G. C. A. Cimino and Francesco Marcelloni, it is emphasized that there is an increasing demand for transparency throughout the wine supply chain. The literature proposes an information system that would store information about products and processes throughout the entire supply chain, from grape growers at the beginning to retailers at the end. The technologies that are proposed in the first paper to address this would be a combination of radiofrequency ID (RDIF) and electronic product code (EPC), which would provide an increased understanding of the movement of products throughout the Oliver supply chain. The internet of things (IoT) has been proposed for use in the supply chain, which would further give producers an understanding of their supply chain. The implementation of these three different types of information systems in the wine industry would be characterized by varying levels of technological competence, economic resources, and human skills. However, Oliver seems to be more than capable in each category of implementing these information systems in different areas of their supply chain.

The second paper by R. Spadoni, M. Nanetti, A. Bondanese, and S. Rivaroli evaluated during the literature review examines how economic expansion throughout the country has opened new pathways for commerce which in turn has produced significant technological innovations that can be applied to the wine industry. A few of these innovations are IoT, Big Data Analytics, and Blockchain, which all play a role in the logistics of the wine supply chain. The paper defines each of these different innovations as sensors connecting machines and devices for remote communication and control that have a focus on performance and efficiency, giant informational databases, cleaned up in a usable form that has a focus on insight, and a decentralized digital ledger for recording unalterable transactions which look at the tracking, transparency, and security, respectively. These innovations can empower the wine supply chain with solutions that enable wine traceability throughout the distribution and commercialization phases, which will give Oliver a better grasp on the control of operations. The implementation of these could be critical for the growth of Oliver in the long term.

Research Question 3

We have conducted an interview focusing on the application of IT for Oliver Tasting Room with manager Ben Smith. Although Dr. Smith was not in charge of wholesale distribution at Oliver, we still asked, “How does Oliver wholesale determine which wine would sell better in certain states?”. Dr. Smith replied, “Oliver wholesale uses Nielsen Data which provides sales statistics by each sales location to make data-driven decisions.” However, Oliver Tasting Room does not use Nielson data. Instead, it uses limited features of Commerce7 for visitors, inventory management, and e-commerce functions rather than data-driven sales decisions. 

According to the interview, Oliver Tasting Room’s sales management decisions were not made by actively utilizing data-driven sales management methods. Rather, Oliver Tasting Room more heavily promotes wines that have enough stock on the shelf so that they can maintain stocks of wines that are running low. This was an unexpected outcome since Oliver Tasting Room had implemented various IT services, such as Workjam and Commerce7.

Customers' behavior has changed and their expectations have grown. In addition, sales professionals' reliance on data has grown and traditional human relationship-based sales strategies are declining. “For instance, a LinkedIn survey found 56% of sales professionals using data to target accounts, and a 54% increase in those using sales intelligence tools since 2018” (Sharan, 2021). The Covid-19 pandemic also hastened the shift towards more data-driven sales management since it enlarged the sales target and sales scale. Thus, it has become difficult to build personal relationships with representatives.

We also asked, “What other current IT does Oliver use and what is its purpose?”. Dr. Smith said, “Oliver Tasting Room is using geofencing.” Geofencing is a virtual perimeter for a real-world geographic area and Oliver Tasting Room mainly uses it to collect area codes from visitors’ mobile devices. However, it is not actively being used to contribute to management decisions.

Furthermore, “What IT would you invest in as a Tasting Room manager?” was the last question of the technology part of the interview. According to Dr. Smith, “Oliver Tasting Room currently has no technology to keep track of the inventory of non-wine staples since Commerce7 only manages wine inventory.” Thus, Dr. Smith wants to invest in a technology that can manage the inventory of non-wine staples to save time and to prevent running out of the staples. Currently, Commerce7 does not provide this feature, although numerous other IT services can do so.

Discussion

Research Question 1

Our results for research question one is that WorkJam both improves workplace culture and simplifies the scheduling and communication operations of the Tasting Room. While the implementation of WorkJam has been successful in the Tasting Room, it has not yet been implemented in other departments. Part of this is that WorkJam does not have document collaboration or video conferencing capabilities. Other departments need those features, while the Tasting Room staff are fine without them. Without WorkJam, they mainly use Microsoft Teams to collaborate and communicate. 

Through our research, we discovered that WorkJam has a new feature that could help Oliver expand the use of WorkJam to other departments and incorporate the systems that they already use. WorkJam Everywhere is a new generation of the WorkJam Workplace that was released in July 2021 and has the capacity to be interoperable with Microsoft Teams (“WorkJam”). This tool can be accessed directly from the Teams platform. We suggest that Oliver investigate the functions of WorkJam Everywhere. It could be an effective way to combine the functionality of WorkJam with the document sharing, collaboration, and video conferencing functionality of Microsoft Teams.

Research Question 2

As the Tasting Room has similar operations to tier 2 entities. implementing technologies such as automated storage and retrieval systems (AR/RS) to simplify the handling of inventory may be beneficial for operations. The Tasting Room could use forecasting tools to set production schedules that allow for multiple-year planning to assist in the management of inventory, which could change the supply and demand required out of the supply chain. For Oliver to continue to be competitive in the wine industry, they need to have moving targets for their supply chain to meet the changes in customer demand that have been exacerbated by the Covid-19 pandemic.

Although the vineyard (Creekbend) that is in Bloomington, IN is a small-scale operation, it is also an opportunity for the implementation of information systems that could help increase the yield of the crop. This would allow Oliver to increase the number of cases produced at the vineyard, which doubles as their identity. The information systems that would be beneficial for implementation in the vineyard are primarily IoT sensors to gather information on weather patterns, sun exposure, pH, rainfall, nitrogen levels, soil conditions, humidity, and wind direction/speed, which all have impacts on the crop. Oliver can take this data and merge it with historical data from previous growing seasons to make real-time decisions, quick adjustments, and identify long-term trends to optimize yield.

The wholesale wine distribution at Oliver was an area that our interview was not able to provide the most information on due to the differing areas of sale, but based on a review of the literature recommendations for this area, any recommendations would be focused on utilizing blockchain technology. This provides secure, transparent, and verifiable transactions throughout the supply chain. The incorporation of blockchain at Oliver for wholesale could reduce the risk of default, contract breach, product damage, and human error due to an increase in the information from this decentralized digital ledger. If Oliver can create stronger data integrity, this could lead to the robust analysis of the supply chain, thereby increasing accuracy and reducing any redundancies. 

For the retail trade component of the supply chain, in this context means the Tasting Room, our recommendation for information systems is to implement predictive AI. This technology will provide personalized recommendations for customers based on the information that Oliver has stored from previous purchases, which can further optimize the supply chain by showing which products should be stocked in higher quantities. This would create a better experience in the Tasting Room as it can improve both the wine tasting experience and the sale of wine based on data analytics, leading to a greater profit.

As Oliver has recently been bought by an investor group, the types of information systems that are implemented should consider what choices are beneficial from an investor standpoint. The wine industry is fraught with issues of fraud and counterfeit that can occur at various stages throughout the winemaking and selling process (Tacconelli, 2020). Due to these issues, investors need reliable and trustworthy information on the varietal of the grape, the vineyard origin, storage conditions, production process, packaging, transportation, and ownership. The implementation of blockchain technology through smart contracts can ensure authenticity through a detailed and verifiable ownership chain. The ability to use blockchain to verify this information throughout the supply chain will benefit Oliver, as having trustworthy, readily available information will be important to be able to present to the board of directors and investor groups in the future.

Research Question 3

The Oliver Tasting Room has two major technology problems: (1) lacking a way to manage non-wine staples, and (2) lacking data-driven decision-making technologies and processes. Information concepts and technologies such as Knowledge Management Value Chain, Computer Vision, geofencing, IT services such as Nielsen Data, and Commerce7 will be able to resolve those problems.

Applying Computer Vision (CV) to manage inventory efficiently will be a wise decision for Oliver Tasting Room. Automating inventory management of products that are not major sales items will save labor costs. It will also reduce the chance of running out of staples and disappointing customers by not being able to provide them with what they were expecting, such as a certain cheese or jam that goes with their favorite wine. Considering one of the Oliver Tasting Room’s goals is to enhance Oliver’s brand value, customer satisfaction is a crucial part. Having efficient and flawless inventory management is certainly a comparative advantage that the Oliver Tasting Room should have among other wineries and wine brands. Moreover, once Oliver Tasting Room is familiar with CV inventory management, they can apply it to their wine inventory and save the budget that would go to Commerce7 for wine inventory management.

Next, Oliver Tasting Room should broaden the usage of geofencing. For instance, Oliver Tasting Room can incentivize customers to download their exclusive app with promotions and send push notifications to their device when the customers enter their geofence. Customers passing by will then visit Oliver Tasting Room to purchase wines and use their services.

Oliver Tasting Room should also communicate with the wholesale department and try to learn how they are utilizing Nielson data. It is recommended that they seek advice from the other part of the same organization because they will be open to telling business secrets and saving costs if purchasing the service from Nielson data.

Oliver Tasting Room should also exploit the many Commerce7 more aggressively. Commerce7 provides diverse features including Point of Sales, which is a personalized sales and marketing solution. The Oliver Tasting Room is currently mainly using the wine inventory management and e-commerce features but not the special ones, such as Point of Sales. This is partly because Oliver Tasting Room’s wine supply is not consistent and there are not many reasons for them to sell more wines. Thus, Oliver should solve the supply side problem and implement the Point of Sales feature to recommend the most appealing wines to specific customers. This competitive strategy will let Oliver Tasting Room improve its brand value and increase business size and revenue.

Lastly, Oliver Tasting Room can apply knowledge management value chain (acquisition, storage, dissemination, and application) when they invest in knowledge management. They can acquire knowledge through geofencing, Commerce7, and Computer Vision. For storing knowledge, the best approach is cloud computing. Cloud computing services such as Salesforce and Amazon Web Service (AWS) let businesses save costs and store knowledge securely and flexibly. Knowledge dissemination can be performed by developing social media or own applications on top of conventional ways such as emails and SMS. WorkJam performing as a platform for employee training and inner social network is the case that Oliver Tasting Room is already performing knowledge dissemination well. Knowledge application is the final step that will directly contribute to accomplishing the goals of the Oliver Tasting Room. For instance, they can use data stored in Commerce7 to recommend wines to customers to increase sales. Also, they can use customer data to find the right targets for promotions and advertisements.

Conclusion

The Oliver Tasting Room is actively using IT such as WorkJam, Commerce7, Nielsen Data, and geofencing to promote sales and enhance management. WorkJam impacts organizational culture by centralizing communication about scheduling, training, and social messaging. The Oliver Tasting Room has experienced massive growth, and incorporating additional IT into the supply chain can optimize its potential. Computer Vision warehouse management will be the key to solving the inventory management problem Oliver Tasting Room currently has. Data-driven IT solutions are the key comparative strategy that will grow the business into a more successful winery and brand.

Appendix

Ben Smith

Oliver Tasting Room Sales Manager - 2.5 years

Working at Oliver Tasting Room - 9 years

In charge of Oliver Tasting Room but not production and wholesale

Location: Oliver Winery, Original Tasting Room

Time: Monday, November 1 at 3:30 pm

Interview Questions

What is WorkJam?

What different things does Oliver use WorkJam for?

When did you first start using WorkJam? Why did you decide to use it?

How does WorkJam facilitate relationships between staff members? 

What do you use WorkJam for the most?

Are there any functions of the app that are not used very much?

What is the culture like at Oliver? How does WorkJam contribute to this?

Did the workplace culture change after implementing WorkJam?

​​Could you provide additional information on the Oliver supply chain?

When expanding their vineyards how do you use IoT to ensure you are picking ideal locations for quality produce?

Which technology in the supply chain has Oliver implemented in the past 10 years that you believe has improved your business the most?

How does Oliver wholesale determine which wine would sell better in certain states?

How does the Tasting room use statistics and IT to make management decisions?

What other current IT Oliver uses and what is its purpose?

What IT would you invest in as a Tasting Room manager?

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https://authena.io/wine-fraud-a-still-fashionable-and-profitable-practice. 

WorkJam unveils the next generation of its frontline digital workplace: WorkJam Everywhere. WorkJam. (2021, July 16). Retrieved November 14, 2021, from https://www.workjam.com/2021/07/workjam-everywhere/.