Brewery to bar: innovation in Diageo’s supply chain
Helping Diageo transform its supply chain, to serve customers across 100 countries
Whilst enjoying a creamy pint of draft Guinness, have you ever wondered about its journey from brewery to bar? The famous black stuff (it’s actually ruby red) is available in 100 countries worldwide and is brewed in almost 50. As you can imagine, it’s a complex undertaking getting it from plant to pub – and one that’s fundamental to the company’s success. So in 2014, Diageo came to us for help.
A Deloitte team from Risk Analytics, Financial Advisory and Consulting has spent the past two years working with Diageo on its commercial and supply chain programme, Project Ice Cap. The objective was to iron out peaks and troughs in sales by improving the client’s understanding of customer demand and sales behaviour. At the same time, we looked at removing inefficiencies to help save costs. The programme spanned Diageo’s enormous logistics process from production and warehousing to distribution and retail. Our work supported Diageo in becoming a consumer-driven organisation, and with reduced volatility and unpredictability in customer behaviour.
Working closely with Diageo’s global commercial and supply chain leadership, we performed a comprehensive evaluation of its existing supply chain in five high-priority markets: Ghana, Brazil, Spain, Global Travel & Middle East and Great Britain. In each market, we looked at different commercial practices, supply chain arrangements and distribution channels to model scenarios showing the benefits and costs for Diageo implementing certain policies.
The model allowed Diageo to run ‘what if’ scenarios to determine the impact of its commercial decisions – as well as changes in demand and production - across the entire value chain. It has also identified significant opportunities to increase revenue growth, improve the supply chain and reduce Diageo’s working capital. We’re now helping with an implementation process that will also benefit Diageo’s customers, thanks in large part to Diageo having to carry less stock.
The foundation for our work was a project that garnered the prestigious ‘Supply Chain Strategy and Design’ award at Logistics & Supply Chain’s European Supply Chain Excellence Awards. This honour recognised Diageo’s achievements in transforming its supply chain, as well as its new approach to considering the entire value chain, rather than looking at everything in silos, allowing better decisions to be made for the business as a whole.