'A barrel full of monkeys'

1. Define the problem. What are the key issues or concerns in the case? What factors reduce the capacity of the organization to achieve its objectives? Do not confuse symptoms of problems with problems themselves.

2. Discuss any sub-problems or minor issues that may have a bearing on the situation.

3. What are the causes of the problem? Briefly analyze the causes.

Kathy was at her wit's end. The CPO was once again demanding answers regarding the barrels needed for the company's storage of bourbon. The demand for bourbon (especially in the southeastern United States) has continued to surge. All of the distilleries, both large and small, are feeling challenged by the lack of barrels to store the bourbon in. Both barrel production and the white oak lumber industry are struggling to keep up with demand.

Kathy had a dual degree in Marketing and Supply Chain Management from a prestigious university. She thought that a job working for one of the top distilleries of bourbon in the world would be glamorous, and she had been bragging to her friends about all of the perks that she received from the company. She didn't realize that her job would be in jeopardy because she was having trouble buying enough barrels to fit bourbon in! How is that even possible? A barrel is a barrel, right? What difference did it make if it was white oak or pine? Who cares? Why not keep it in the containers it is brewed in?

The shortage of barrels reflects a supply-chain conundrum. Downstream, barrel makers face a wave of demand because a half dozen established bourbon distilleries and 300 new craft distilleries were increasing production amid a bourbon boom. Upstream, they face a shortage of white oak wood used in barrels because the lumber industry hasn't rebounded from the housing market collapse. The stress on barrel makers has also been driven by the more than 35% increase in bourbon sales in the U.S. since 2010. Including Tennessee whiskey, which also uses new oak barrels, exports topped $1 billion last year for only the second time.

Kathy did not understand the market either upstream or downstream. What Kathy also didn't realize is that there was a very distinctive process involved in distilling bourbon. She had taken her obligatory "plant tour" so that she could understand the process but really didn't get into a full-blown category and spend analysis for the companywhich she should have! She didn't even realize where the money went. The CPO was actually quite bothered with Kathy's performance and hoped that she would be able to "take the bull by the horns" and figure out what needed to happen with the barrels, and with all of the other categories of spend.