Natalia Klenova - stock.adobe.co
Daniel Duran, CIO at global drinks giant Concha y Toro, says people mistakenly might think of winemaking as a process that involves trampling grapes with your feet: “That’s an old history and it’s nothing like that today.”
He explains that while the company’s winemaking process is rooted in 150 years of tradition, it has evolved to draw heavily on the use of digital systems and services, including automation in its irrigation systems to control humidity and the temperature of grapes in the field, and internet of things (IoT) sensors in its wine vats to monitor the fermentation process.
With brands such as Casillero del Diablo and Don Melchor, Concha y Toro operates in more than 140 countries, making it one of the biggest wine companies in the world. Duran says the organisation’s pioneering use of technology plays a crucial role in its processes and will help the company to continue to develop and grow.
“Our goal is to transform Concha y Toro and to create a real-time company, enabling every employee to make decisions with real-time information,” he says.
Setting the pace
Duran started working for the company 25 years ago when he was finishing his degree in industrial engineering. His first job was in the bottling function, followed by stints in planning and logistics. Moving through the various parts of the business allowed him to understand in more detail how the wine was produced.
During this period, Duran worked on a number of key projects for the business, including the implementation of SAP enterprise resourcing planning technology from 1998, with the platform going live at the end of 1999. He continued to work in technology and operations until he proposed to Concha y Toro’s chief executive in April 2001 that the company should establish a dedicated IT department.
“I suggested an area to focus on, which was about processes more than the systems and tools,” says Duran. “[The CEO] encouraged me and I took a couple of months to interview some of the other managers in the company. I prepared a presentation about how to implement a new IT area, with the focus on processes – and now, in 2021, I’m still here.”
After a quarter of a century with Concha y Toro, Duran still stills enjoys the challenges involved in his day-to-day work – and he says that’s in large part due to having to help the different parts of the business keep up with the rapid pace of technological change.
“IT is very different across the different areas of our company. For example, if you have to make or build a system for our agriculture area of the business, where the grapes grow, it’s quite different to the commercial area – nothing is similar. All the areas are connected, but they are very different in the ways they work together,” he says.
“So the systems that you provide as an IT department are also different. That’s quite challenging, but also interesting to learn. The technology has also been evolving across the years – and each year those changes get faster. So we are very busy when it comes to managing this change and implementing new technologies.”
Collecting lots of data
Duran recognises that it’s harder to digitise some areas of the business than others given the specialised nature of wine production. Some crucial headway, however, has already been made. Take operations, for example: the company implemented SAP in Chile and Argentina from 2005, quickly boasting a maturity of 90%.
Digitisation isn’t just about operations, either. In the past few years, Duran says Concha y Toro’s IT team has spent more time digitising the oenology part of the business, which is the science and study of wine and winemaking. The company has nine wineries in Chile, two in Argentina and one in the US.
The company introduced real-time analytics during 2020, including Power BI, SAP Lumira and Smartsheet. Duran and his team now collect information from different data sources and this insight-generation process feeds the overall digitisation aims of the business.
One of the key areas of development is around IoT and connected sensors. The IT team is working closely with the Concha y Toro Centre for Research and Innovation, which is located 400km south of Santiago in the Talca region of Chile. The company has been collecting sensor-based data since 2018.
“We started with a few locations and now it’s growing,” says Duran. For example, sensors are used to check for humidity, pressure and oxygen in the tanks that are used to produce the wine. Optical sensors, meanwhile, are used to check the density of the wine produced.
Outside in the fields, Concha y Toro is introducing sensors to check both humidity levels and water irrigation flows in the vineyards. Data from these sensors is sent to the cloud and assessed to see how those factors affect the quality of the product.
“We also collection information about the weather,” says Duran, referring to the enrichment of this information with additional data sources. “Sometimes, for example, you have rain, so you can calculate the humidity. And then we analyse the impact of all that information on the quality of the grapes. With all that information, we can understand the correlation between the variables and make predictions about what we have to do to create a different result.”
Analysing the quality of wine
Duran says this data analysis process remains in constant state of development. Concha y Toro is investigating how different cloud-based tools can help its employees understand and predict the correlation between different variables that affect the production of wine.
The company also continues to add more variables to its models in an attempt to find fresh ways to assess the quality of its grapes. Duran refers to this as a machine-learning approach, as the model learns more about correlations with each new variable that is added.
Concha y Toro is currently piloting a new system in two of its wineries that the IT team has been developing with the company’s research centre. Known as the smart winery, this system uses a series of sensors to help the company understand the fermenting cycle of the wine.
“Our goal is to transform Concha y Toro and to create a real-time company”
Daniel Duran, Concha y Toro
The sensors collect detailed information about temperature and acid levels. The IT team uses internally created machine-learning tools that are coded in Python to predict how different variables will affect the quality of the wine. “It’s a very complicated process, but when lines for these two variables cross, that is the exact date and time that you have to stop the fermenting process,” he says.
Concha y Toro’s data-analysis processes are run on the cloud, primarily through the Google Cloud Platform and the SAP Cloud Platform. Duran says the company has always had a strong interest in taking best-of-breed solutions to the company’s challenges – and on-demand IT systems form a key part of that approach.
“We are a company dedicated to the wine industry. We don’t focus on software development; there are many companies outside that are focused on that area. We can choose the best software or the best company to make an application for us,” he says.
Supporting further innovation
Concha y Toro has more plans for data-led innovations and its explorations of new technologies are unpinned by Pure Storage. The company uses Pure’s all-flash storage arrays to support its modern winemaking processes.
Before selecting Pure Storage, Concha y Toro was using on-demand storage services from a local IT provider in Chile. “It wasn’t a good experience,” says Duran. “The system was very slow. To make a transaction could take five minutes. The service wasn’t reliable, so we went to the market to understand what was going on around storage.”
Duran says that process highlighted how Concha y Toro needed a new approach to technology provision. He is now helping to oversee a long-term move of the company’s infrastructure and applications to the cloud, a transition that will help the IT team to reduce its operational requirements around administering and monitoring internal systems.
When Duran first went to the market in mid-2016, he spoke with another company in Chile that was already working with Pure. Concha y Toro’s IT team created a request for proposal document and found Pure offered validated experiences from other clients. Duran says Pure’s focus on solid-state storage was a compelling factor.
“The potential speed was a huge step forward for us. For example, our old systems at that time offered 50 milliseconds per transaction; Pure Storage promised speeds of less than one millisecond. That’s a huge difference,” he says.
“The simplicity in the model – in terms of architecture, and maintenance and monitoring –was another key. Finally, in terms of cost, they were very competitive with other vendors, but the technology they have today is superior to the rest.”
Leading cultural change
The technology preparations that Duran is making now will help his business to embrace new growth opportunities during the next few years. Beyond the implementation of digital tools and services, he says one of the key challenges is to ensure the technological transformation is backed with a commensurate cultural change programme.
While Duran says Concha y Toro will continue to draw on the expertise held by external parties when the time is right, it is crucial that people inside the business can develop the right capabilities to exploit digital transformation.
“That involves adapting the mindset of people who work in the company, so we are now developing a programme to make digital transformation real,” he says. “And it’s not only about the tools that we are using, it’s about the knowledge and the expertise and the skills that we have to put into our people.”
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