HIGHLAND DISTILLERS CASE STUDY. John Fuller BSc, MBA, CENG

Transcription

1 HIGHLAND DISTILLERS CASE STUDY John Fuller BSc, MBA, CENG

2 Context Highland Distillers Operations Complete demand Chain globally 100 year long from Oak to 24 hour delivery in 80 countries worldwide Stagnant little innovation, process controls Consolidation in the industry left smaller players with uncompetitive cost base Dimensions Distilleries 10 Output ( max. ) 21 M L People 250 direct Turnover 220 M Demand Chain Value 200 M Stock Value 0.5bn Output in bottles 36 M Visitor Numbers 250 K Tourism Turnover 1.5 M

3 Process Developed a Compelling Need for change Articulated the market conditions simply, and the impact on HDO Made it highly visible and measurable something that could be related to by all of the team Drove the Change Created Energy by competition with another Divisional group Picked and trained a number of internal Facilitators Used Strong visible leadership being seen weekly at all levels in the business Involved All Created a very structured cascade of results and tasks involving everyone with multiple levels at once Involved the most sceptical in leading key results Dedicated time to lead the process Structured communication with up/down Cascades and road shows every quarter Created Common values Simple common framework plan on a page Within a framework each local team could have as much input as possible Ensured Simplicity and Consistency Simple process words Common Visual Management System every team shared results in the same way Created plans with few words - good pictures Systemisation as complexity increases Created a framework for Excellent Measurement and review Integrated with results cascade Very Highly visible at all levels Systemised at the right time to reduce complexity

4 Common goal Developed by 30 people Focus on people first ( all 250 ) Belief, energy, buy in Structured teambuild process Measured Real life Business plan process Structured objectives and results Visible cascade

5 What did it look like? Plan on a page " HDO Way " Behaviours checklist Visual Management systems Task plans and KPI's RAG Exception Reporting Communications Cascade and Road shows Continuous Improvement process and sharing Integrated Appraisal system

6 Simple Objectives HDO Mission HDO Objectives Highland Distillers To manage, profitability the demand chain for Objective Owner 10 million cases by Deliver the baseline performance that supports the business JAF/ plan. RSE/ 1 To increase return on Capital from the demand chain while improving service and quality to our partners. BWC JAF HDO Vision HDO will deliver - products and services at the lowest cost of quality using all of our resources to minimise duplication and avoid waste - the full demand chain, from cereal to cased goods, at the highest level of customer satisfaction/delight - partnerships to continuously reduce demand chain costs 2 Increase HDO profitability through managing the operations of non-group demand chain services. 3 Deliver products that delight our customers. 4 Continually increase the contribution of all employees. 5 Reduce the cost of quality. 6 HDO is recognised as the most innovative producer of Scotch Whisky. 7 Continually increase brand value from tourism whilst increasing the contribution to HDO. 8 HDO's position is established as a professional company being highly regarded in industry, the community and internally. BWC JAF JAF JAF JAF JAF JAF

7 Plan on a Page

8 Structured Development Plan 1 (7TH APRIL) 2 (16TH JUNE) 3 (8TH SEPTEMBER) INTRO BUILDING BLOCK MODEL MAKING MONEY BACKTRACK DO MORE DO LESS EXERCISE BUILDING BLOCKS STRATEGIC STAGES OF TEAM PERF. BELBIN REVIEW SPECIFC GAMES PLA N BACKTRACK DO MORE DO LESS EXERCISE BUILDING BLOCKS PLAN STRATEGIC MODEL STAGES OF TEAM PERF. TEAM PERF. (LEGO) MEASURE MEASURE STAGES OF TEAM PERF. TEAM PERF. (LEGO) SITUATIONAL STYLES MEASURE MEASURE MEASURE STAGES OF TEAM PERF. TEAM PERF. (LEGO) SD1 PROFILE MEASURE MEASURE MEASURE BELBIN MEASURE DO MORE DO LESS ACTION PLAN

9 Cascade of Results Level 0 PLC Purpose Level 1 Divisional Boards Level 2 Management Teams Objectives Purpose Results Objectives Tasks Results Results etc Measures Tasks Tasks

10 Plans owned across the business Obj 1 Obj 2 Obj 3 Obj 4 Obj 5 RESULTS RESULT RESULT RESULT RESULT RESULT TASK PLANS RESULTS TASK PLANS RESULT

11 Customer Service Delivery Customer service vision Demand Chain Performance Sustainable competitiveness through customer service Suppliers How Average Acceptable Unacceptable Accurate, timeous demand information Motivated UK Customer and Services Cased empowered goods Cased people goods procurement logistics Export Customer Services POS Procurement, logistics & customer service Smooth product flow, matched with demand Customers Recovery Experience Honesty Delight Confidence Quality Consistency Flexibility Speed Risk Copied Promise Weighted average : 34% on top 3 ; 44% on others Rating against Best In Class Structure to Deliver

12 Process Based Structure Product Dir BW C Product Mgr Macallan - DGR Product Mgr H.Park - JFR Product Mgr BB,Bunna - JAP Product Mgr Misc - GR Product Mgr N BD - JMM Cust Servs PM DB O perations Dir RSE Procurement PM PRR Stk & W hse PM AEG Managing Dir JAF Distillery PM Recruit Raw Mats PM W C Innovation PM Recruit Project Team s Quality PM TAG Engineering PM JAS Ind Tech Mgr TD Dir of Tourism DAB Demand Chain Proj Mgr SRH

13 Common Results Format HMD Continuous Improvements Financial KPI's Combined Profit Before Tax Suggestions Sugg Imple Sept 97 Oct Nov Dec Jan 98 Feb Mar Apr May Jun 'm Financial KPI's Combined Cash Flow Sept. 97 Oct Nov. Dec Jan 98 Feb Mar Apr May Jun Jul Aug Budget Actual 'm Budget Actual

14 Team based reviews and problem solving Reviewing performance daily Structured Problem solving Creating high performing teams Through soft skills training

15 Soft Results Attitude Survey % INCREASE E Target Actual Job goals & Perf Involvement Management Style Other

16 Soft Results Team Devt % /98 3/99 0 Form Storm Norm Reform Perform % /98 3/99 0 Achievement Support Role Power

17 Results Total Investment of 400 K in 18 months delivered CAGR into stock 20% = 1.4 M Bottling material savings 0.4 M pa - adjusted for supplier inflation 1.1 M pa Unique supplier and customer partnerships contributing 0.1m 10% overhead reduction to '98/'99 budget ( 0.5 M) Cash performance - w/c total approx 9.0 m Cased goods stock reduction of 50% Continuous improvement program giving over 1,000 suggestions contributing 0.7m Customer service levels improved from 70 to 98 %

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