Outfitting your winery is an exciting task but browsing equipment specifications with similar descriptions and little guidance for what truly fits your needs can be daunting. New equipment selection can feel like a distraction from the art of winemaking as well as from more urgent production and sales activities. It is not unusual for a winery to base equipment purchases on what worked for neighboring wineries or the recommendations of an equipment dealer. Purchasing capital equipment is a major cost and a decision that should be made carefully.
Not all capital equipment purchases are created equal. Each winery has unique circumstances based on production requirements, business organization, personnel types and skills, location, varietals, facility capabilities and more. What worked for one winery doesn’t necessarily work for all wineries. Understandably, an equipment representative is looking to fit their equipment to your needs, but have you taken the time and asked the right questions – to clearly assess your project.
For this reason, it is essential to spend time on two principal activities for a capital equipment project – framing the project and defining user requirements.
Frame Your Project
Typical questions that might be asked could include:
- Is this a quality improvement project?
Home in on the aspect of quality you want to improve and determine what drives it. Perhaps it is efficiency or consistency or aesthetics or process inadequacies or product flaws. Knowing what is affecting quality helps define where to focus a capital improvement project. It also allows you to prioritize any peripheral systems under consideration.
- Is it a capacity building project?
A capacity-building project is more than focusing on current bottlenecks; a company’s history and future goals should inform it. Of course, there are limitations. Sure, a winery may hope to increase production by 10-fold in the future but is that a realistic goal relative to the ROI for the investment. Consider a multi-phase approach. Perhaps forecasting double or quadruple capacity in the next few years results in cash flow to a future expansion on the way to that 10-fold increase.
- Is it to diversify or improve a winemaking style?
Expanding and refining product offerings should not be confused with expanding capacity. They are similar but with different considerations. Adding a new product may not increase production; it adds capability and requires new skillsets. Perhaps the goal is to increase capacity and expand product offerings. That is fine if they are differentiated from each other.
Rather than a “here and now” mentality, think about these questions holistically. Looking only at a winery’s historic growth and its current operations may lead to purchasing equipment that is quickly obsolete because it doesn’t fit future needs. Consider near-term and long-term forecasts and select equipment that balances the two. The funds may not be available to fulfill every long-term plan, but it may be possible to incorporate preparations for future improvements and expansions.
Based on the answers to questions like the above, you can formulate investment objectives that drive the project forward. Clear objectives help maintain focus on goals and inform not only the project’s strategy but the company’s strategy.
User Requirements Specification
Once familiar with the reasons behind undertaking a capital improvement project, it is time to create a User Requirements Specification (URS). Dedicate adequate time early in the project to creating a URS. Although gathering requirements and preferences from multiple user groups ranging from operators to maintenance to production seems like a lengthy process, it can save money, time and headaches down the road. A URS doesn’t only list the needs and desires from users; it also builds confidence in final decision tradeoffs and provides a road map when things begin to feel like there are straying off course.
As you build the URS, it is crucial to keep in mind the original goals for the project. When asked open-ended questions, users enjoy dreaming up pie-in-the-sky concepts that creep outside of the scope of the objectives laid out earlier. Continually look at suggested requirements and ask, “Why is this necessary?”
Every capital project is different, but that doesn’t mean lessons from other projects are not translatable. A significant advantage of working with a consultant is their experience in multiple projects and even other industries. PAMC brings this experience to every project to help define the scope, build a URS and allow you to make equipment purchases that fit your growth strategy.
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