DRIVING TRANSFORMATION FROM THE TOP: DISTELL’S JOURNEY TO END-TO-END SUPPLY CHAIN EXCELLENCE

Dino Petrarolo,Cecil Everson

doi:10.7166/30-4-2284

Abstract

Distell Group (a listed South African alcoholic beverage company) embarked on a business improvement journey that required a significant change to its supply chain structure and capability, which were inadequate to meet its 2020 strategic ambitions, to improve its performance levels. In partnership with Competitive Capabilities International (CCi), Distell developed and executed an end-to-end supply chain and excellence strategy to transform this function. This paper describes how this strategy, through four key strategic levers, effectively transformed its supply chain function as well as the resultant performance benefits that ensued, primarily in its South African operations.

Highlights

In early 2013, strategic imperatives and the challenge of responding to the ongoing financial crisis prompted Richard Rushton, newly appointed Distell Group CEO, to design an end-to-end supply chain [2] optimisation strategy with the aim of transforming Distell into a truly global alcoholic beverages leader
7.4.1 Strategic issue: While there was evidence of good practice being driven within some parts of the supply chain, there was a lack of consistent application of best practice standards across the supply chain as a whole
Distell concluded that Competitive Capabilities International (CCi) and their TRACC integrative improvement methodology best aligned with its objectives

Summary

Introduction

In early 2013, strategic imperatives and the challenge of responding to the ongoing financial crisis prompted Richard Rushton, newly appointed Distell Group CEO, to design an end-to-end supply chain [2] optimisation strategy with the aim of transforming Distell into a truly global alcoholic beverages leader He recognised that a fragmented supply chain, current performance realities, combined with industry and competitive benchmarking data, made a compelling argument for the need for change. A significant gap between corporate aspirations and supply chain delivery The additional complexity created by both a large product/brand portfolio, and a fragmented, unaligned network dispersed across 88 locations in South Africa alone The need to ensure data integrity, accuracy, and availability with the right information in the right place at the right time Outdated processes and practices resulting in sub-optimal disciplines and routines These factors called for a fundamental change in mindset and behaviour to address a culture that did not support world-class excellence. A paradigm shift was required to achieve the 2020 strategic ambitions, which included: Growing revenue Increasing the EBITDA margin Growing EBITDA and EBITDA Compound Annual Growth Rate (CAGR) growth Step change return on net assets (RONA) Delivering Economic Value Add (EVA) in line with the value-based management model (VBM)

Objectives

Results

Conclusion