CASE STUDY: Lark Distillery's inventory control
Lark Distillery is the distiller of an award winning Australian single malt whisky, crafted in small batches from exclusively Tasmanian ingredients and matured in small barrels before being hand-bottled for customers worldwide.

Lark's whisky and a range of additional unique Tasmanian spirits are sold via online and off-line channels, direct to the consumer as well as wholesale to distributors.
A growing inventory
Whisky production is something that can't be rushed. It takes five or more years before the product is bottled and ready for market, so until that stage is reached, the barrels and bottles must be properly stored, monitored and periodically moved through the different stages of the production process.
With three different whisky expressions, and around three different bottle sizes for each expression, plus assorted additional products sold through the cellar door, Lark's inventory is continually growing. As an example, in 2014, Lark's annual production of whisky is expected to be 3.5 times what it currently sells.
Troy Trewin, Chief Executive Officer at Lark Distillery explains, “We have far too much demand for our supply, so we need to do a lot of planning about when product will be available and where its going to go. Currently we're producing three-and-a-half times the amount of whisky that we are able to sell due to the five or six year maturation and this factor is ramping up each year. And we hope to produce more than quadruple what we make now, very soon.”
The need for stock management discipline
In 2014, Lark Distillery welcomed the arrival of a new group of investors keen to take the company into its next phase of growth. Having established its credentials as a whisky distiller, Lark was no longer a start-up business and it was time to bring a new level of discipline and rigour to the management of the company.
Trewin says one of the first areas targeted for improvement was inventory management. “It was very important when the new investors bought into the business to move away from spreadsheets and lax reporting. At the time our stock management was poor. We didn't have a good handle on what the stock value was. Stock movements weren't great and there was a lot of risk. We needed to have more discipline and add control around stock management.”
Looking in the cloud
A big believer in not creating an in-house solution when more professional alternatives exist, Trewin decided to look for a purpose-built inventory solution to replace Lark's system of spreadsheets.
With frequent stock movements across the company's five sites, Trewin was keen to find a cloud-based solution that would enable easy access for staff from any location. He wanted a solution that would integrate easily with Lark's two other financial systems – the Vend point of sale software and Xero, its financial system. It would also have to integrate with the e-commerce system already in use on Lark's website.
“If someone tries to order a product that is out of stock, we wanted the website to automatically let the customer know this,” Trewin asserts.
After considering a few alternatives, Trewin selected Unleashed, a leading Software as a Service inventory solution from one of the world's fastest growing cloud companies. By the beginning of October 2014, the software was deployed and the reliance on spreadsheets was no more.

ROI within six months
Trewin says the dedicated inventory software has greatly improved accuracy and reporting for Lark's board. There is more information about stock evaluation and movement. Control has improved thanks to simple measures such as the inability to change dates or backdate information.
“Unleashed has brought proper system and audit trails. We feel there is less risk in the business around our stock. It has become much easier to do production planning and sales forecasting because we can tell what we have in stock,” he notes. “We can cost the products we create easily, and the interfaces with Xero and Vend are helpful.”
Integration between the three systems and the automation offered by Unleashed have cut down a significant amount of back office administration, removing the need for human intervention. Trewin estimates Unleashed is saving Lark the equivalent of half a full time employee (FTE). “It's taken us about six months to achieve a return on the investment.”
Trewin acknowledges that most of Lark's employees are more focused on craftsmanship than technology. For this reason, he's been careful not to overwhelm users with change, only making the software available to those who need to use it. An internal trainer has been appointed to champion the software and to help users navigate their way through the system. And whenever the company has questions about the software, Trewin says, “Unleashed's online help and their support is really good.”
A bright future
For the last three years top line growth at Lark has averaged between thirty and forty per cent per annum. Trewin predicts it will continue at this level for some time.
Last year, the distillery was named the Telstra Small Business Award Winner for Australia, as well as the Tasmanian Business of the Year. It was also named Australian Distillery of the Year and won the National Champion Whisky Trophy at the Royal Melbourne Fine Spirits/Foods Awards 2014. Overseas, the company has received multiple prestigious awards including the Gold Medal Whisky of the Year at the 2011 International Whisky Competition in Chicago.
It's clear the people at Lark Distillery have mastered their craft and that demand for Lark's whisky will remain strong. It's equally clear that production will continue to increase and Lark's inventory will inevitably grow. As it does, Unleashed will grow alongside the company, scaling to suit the needs of this most successful boutique distillery.