CIPS Member Event 27 March 2014 Diageo, Edinburgh and Events/Master slide deckFV.pdfCIPS Member...
Transcript of CIPS Member Event 27 March 2014 Diageo, Edinburgh and Events/Master slide deckFV.pdfCIPS Member...
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Leading global excellence in procurement and supply
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CIPS Member Event 27 March 2014 Diageo, Edinburgh
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Leading global excellence in procurement and supply
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Introductions and Agenda Moira Glencross MCIPS East of Scotland Branch Committee
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Leading global excellence in procurement and supply
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East of Scotland Branch Committee Martin Murray - Shin-Etsu Handotai Europe Ltd [Chair] Susan Gallacher - Shin-Etsu Handotai Europe Ltd Moira Glencross – Oracle Scotland Ltd Chris Mowbray – Scottish Government Jennifer Holden – Royal Bank of Scotland
Introductions
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Leading global excellence in procurement and supply
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Phil Spencer MCIPS - Global Process Owner Diageo plc Angus Duncan - Head of Procurement – ISC Diageo plc
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Leading global excellence in procurement and supply
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17.45 - Registration and refreshments 18.15 - Phil Spencer MCIPS, Global Process Owner, Diageo plc 18.30 - Angus Duncan, Head of Procurement - ISC, Diageo plc 19.15 - Drinks / Networking - a finger buffet will be provided 20.30 - Event close
Agenda
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Welcome!!
Angus Duncan – Head of Procurement International Supply Centre
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Agenda
• Diageo overview
• The International Supply Centre
• Procurement insights – Size / scale / benchmarks – Key focus areas
• Capital expenditure programme
– Procurement learning’s
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The world’s leading premium drinks company
Source: Impact Databank Top 100 premium spirits by value, March 2013.
Diageo
Other
Bacardi Brown Forman Beam
Pernod
• #1 Spirits company in North America
• #1 International spirits company in Asia Pacific and Latin America
• The largest premium drinks company in Europe
• A leading beer and spirits company in Africa
• 13 strategic brands reflecting our category approach
Number of brands in Top 100 premium spirits
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Diageo’s Brands
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Category breadth to deliver on consumer trends in all regions
Six months ended 31 December 2013. Corporate represents 1% of total Diageo net sales.
0%
20%
40%
60%
80%
100%
North America Western Europe Africa, EasternEurope and
Turkey
Latin America &Caribbean
Asia Pacific
OtherRTDsWineBeerLocal SpiritsLiqueursTequilaGinVodkaRumWhisk(e)yScotch
% of regional net sales
32 % of Diageo net sales 20 19 15 13
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A track record of consistent delivery
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3,000
6,000
9,000
12,000
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03 04 05 06 07 08 09 10 11 12 13
Net sales*, £m
Net sales organic growth, %
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500
1,000
1,500
2,000
2,500
3,000
3,500
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2
4
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03 04 05 06 07 08 09 10 11 12 13
Operating profit, £m
Operating profit organic growth, %
Year ended 30 June 2013. Percentage increases are organic growth movements before exceptional items and have not been restated for accounting changes. *Net sales is after deducting excise duties. 2001-2004 as reported under UK GAAP. 2005 restated for IFRS. 2009 restated for IFRS.
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Step up our executional focus
Six ʺMUST DOsʺ
Build and then constantly extend our advantage in route to consumer
Strengthen and accelerate our premium core brands
Drive out costs to invest in growth
Innovate at scale to meet new consumer needs
Win in reserve in every market
Ensure we have the talent to deliver our performance ambition
#1
#4
#5 #6
#3
#2
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The International Supply Centre (ISC)
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Our Business: Our Footprint
PLANNING
60 Sites
53 Lines
765m Litres Filled
Produce 11 out 13 Global Brands
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Our Business: Our contribution to Diageo
50% of Diageo’s sales volume Over 50% of Diageo NSV 300m cases of future sales held within Inventory Source of all Scotch, Baileys Bushmills and Guinness GFE to Diageo Group
Over 350 innovation projects launched in markets annually
Almost 1/5 of All Diageo Talent base
http://www.google.co.uk/url?sa=i&rct=j&q=uk+and+ireland+map&source=images&cd=&cad=rja&docid=6ygbtIDCMKtB9M&tbnid=SeXK7iedrJQJAM:&ved=0CAUQjRw&url=http://www.antiquestradegazette.com/calendar/&ei=ImDUUeDiN-OK0AX48oDAAw&bvm=bv.48705608,d.d2k&psig=AFQjCNGKjEYxs8GWkb8amwAc4XrjezzV_A&ust=1372959084325984
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Our Business: Scale & Complexity
700k tonnes of cereal
c2,500 suppliers
24bn drinks produced annually (40 bottles /second)
52k containers shipped (more delivery routes than British Airways)
Fixed asset cost base £1.8bn
9m casks over 40 locations
Cost base £2.4bn p.a
Over 5,500 SKUs (glass PET, cans, Kegs & pouches)
4,500 employees (and up to 1,000 temps)
http://www.google.co.uk/url?sa=i&rct=j&q=uk+and+ireland+map&source=images&cd=&cad=rja&docid=6ygbtIDCMKtB9M&tbnid=SeXK7iedrJQJAM:&ved=0CAUQjRw&url=http://www.antiquestradegazette.com/calendar/&ei=ImDUUeDiN-OK0AX48oDAAw&bvm=bv.48705608,d.d2k&psig=AFQjCNGKjEYxs8GWkb8amwAc4XrjezzV_A&ust=1372959084325984
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To deliver outstanding performance, growth and best cost for our 21 markets
Delivering the Diageo performance ambition: ISC and Procurement mission
• World class performance • Exceptional service • Enable new growth opportunities
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ISC Procurement – Basic Facts
• £1.5Bn spend per year – £1110M goods and services – £400M capex
• Team of 55 people supported by global category expertise for
circa 70% of spend
• Circa 2500 suppliers
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Areas of Spend £M
461
352 145
125
380
Packaging
Raw Materials &IngredientsLogistics
Utilities & Energy
Capex / MRO
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Basic Benchmarks
• Savings as % of spend = 4%
• Diageo downtime attributable to supplier performance
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Key Strategic Initiatives • Commodity Price Risk Management (CPRM) • Supplier segmentation • Driving the luxury segment • Supplier performance management • Supporting scotch expansion
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Investing In The ISC What we are Doing & Procurement Learning’s
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Impact of Growth in Sales (1) More casks and filling / disgorging capacity
(2) More maturation warehouses
(3) More Malt Distilling capacity
(4) More Grain Distilling capacity
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Diageo Investment in ISC
• £1.2Bn investment over 5 years
• £700M in capex
• £500M in maturing inventory
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The Start of the Journey – Roseisle
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Existing Distillery Expansion
Glen Elgin Dailuaine
Caol Ila
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Bio Energy – Glenlossie and Dailuaine
Dailuaine
Glenlossie Glenlossie
Glenlossie
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Maturation Warehousing - Midtown Blackgrange
200 litre American Barrel
250 litre Hogshead
500 litre Sherry butt
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200 litre American Barrel
250 litre Hogshead
Maturation Warehousing – Cluny Bond
http://www.bing.com/maps/?cp=56.16756675777826~-3.1227748393285282&lvl=12&style=h&where1=
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Cambus Cooperage Cambus Automated Cooperage
http://mike-wilkinson.photoshelter.com/gallery-image/Diageo-HRH-Cooperage/G0000AFR1lJIDtbs/I0000yW2SX2_OUb0http://mike-wilkinson.photoshelter.com/gallery-image/Diageo-HRH-Cooperage/G0000AFR1lJIDtbs/I0000yW2SX2_OUb0http://mike-wilkinson.photoshelter.com/gallery-image/Diageo-HRH-Cooperage/G0000AFR1lJIDtbs/I0000yW2SX2_OUb0
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Expanding Leven
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New Guinness Brewery
http://processengineering.theengineer.co.uk/attachment?storycode=1017221&attype=P&atcode=2043466
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Procurement Journey - Good to Great
• Get the basics right – on time, in full
• Business partnering
• New ways of contracting
• Aggregation / Standardisation
• Drive up addressable spend
• E-Sourcing
• Strengthen SPM process
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A New Way of Working
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Super T The Journey Continues……….
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Thank You
Questions
Slide Number 1Slide Number 2IntroductionsSlide Number 4Agenda��Welcome!!�AgendaThe world’s leading premium drinks companyDiageo’s BrandsCategory breadth to deliver on consumer trends in all regionsA track record of consistent deliveryStep up our executional focusThe International Supply Centre (ISC)Our Business: Our FootprintOur Business: Our contribution to Diageo Our Business: Scale & ComplexitySlide Number 17ISC Procurement – Basic FactsAreas of Spend £MBasic BenchmarksKey Strategic InitiativesInvesting In The ISC��What we are Doing & Procurement Learning’sImpact of Growth in Sales Diageo Investment in ISCThe Start of the Journey – RoseisleExisting Distillery Expansion Bio Energy – Glenlossie and DailuaineSlide Number 28Slide Number 29Slide Number 30Expanding LevenNew Guinness Brewery Procurement Journey - Good to Great A New Way of WorkingThe Journey Continues……….Thank You��Questions