The challenge
As a result of strong market competition, declining cider growth, and a historically fragmented and cumbersome manufacturing and supply network, Distell lacked the agility to meet its long-term ambitions.
While the group enjoyed ‘‘protected’’ growth in the alcohol beverage industry, current performance and practices revealed the following:
- Reduced product quality
- Erratic stock levels and availability
- Poor planning systems and capabilities
- Lagging supply chain performance despite significant investment in marketing, technology, research, and innovation
- High transport costs and quality risks resulting from fragmented procurement spend management and double handling
To address these challenges and increase shareholder return, Distell needed a holistic and integrated approach that would enable a fundamental end-to-end supply chain transformation.
Industry
Food and Beverage
Business size:
5000+
The Distell Group is Africa’s leading product and marketer of wines, spirits, ciders and other ready-to-drink (RTD) beverages sold across the world. Distell has a diverse portfolio of brands, enjoyed across 80 countries and priced across the continuum to cater to a broad range of consumers. Distell has an annual turnover of R2.4 billion (~US$1.7 billion).
The solution
- Establishing baseline maturity
Distell undertook their baseline maturity assessment with a score of 1.47. Using an integrated supply chain maturity approach, they soon achieved a maturity score of 3.0 in the TRACC foundation practices (including Visual Management, Focused Improvement and Quality) in model areas. The aim was to achieve Stage 1.5 foundation practices in all areas within four years and Stage 3 maturity across full sites within seven years. - Build centers of excellence and communities of practice
An organizational design (OD) initiative was launched to create an aligned infrastructure that would lead and support the supply chain optimization process. The focus was to:
• Create centres of excellence (CoE) for all technical functions within Distell (engineering, packaging and capital projects)
• Establish a single group technical service that delivers value to Distell manufacturing as its key customer
• Standardize supply chain structures focused on the development of policies, principles, processes, practices, tools and metrics, which are uniformly applied, continuously improved and regularly reviewed against leading practice.
• Functionalize the CoE to provide strategic and functional leadership, direction, governance, standards, and support to production sites.
The supply chain’s mission was “to enable Distell to successfully plan, procure, make and deliver products and brands to customers through talented people, appropriate technology and leading operational disciplines, processes and practices”.
The results
A reliable, efficient end-to-end supply chain that exceeds customer and stakeholder expectations
Over five years the Distell’s TRACC-powered Supply Chain Excellence program enabled the Distell team to achieve incredible results.
US$174 million in saving across the supply chain
10% increase in on time in full (OTIF)
32% improvement in weekly plan adherence
25% improvement in reliability
10% increase in OEE
30% increase in productivity
20% – 40% reduced Cost of Goods Sold (CoGS)
45% decrease in customer complaints
From our client
“We are confident that we are on the right track to achieve supply chain excellence.”
From our client
“A major transformation like this is not easy. It needs financial resources as well as organizational commitment. The good news is that we can all lift productivity with initiatives such as this. I am convinced that these principles can be applied successfully to any organization. The results at Distell speak for themselves.”
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