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Diageo aims to save £60m through supply chain overhaul

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Posted on 11/03/2013 by Wayne Brophy FCILT

Diageo has announced a major overhaul of its supply chain to help save around £60 million from its current operations.

The company has experienced some positive upturns of late with its Captain Morgan brand of rum helping towards a five per cent increase in sales culminating in revenues hitting £6 billion in the six months to December 30th 2012. The spirit saw a 15 per cent rise in sales and this helped Diageo record a strong performance throughout this timeframe. However, it is now looking to make further savings through the overhaul of its supply chain systems.

Officials have explained that Diageo's plan is to devolve responsibility of this to local managers in its 21 key markets. It is designed to make savings as regional structures will be taking a more hands-on role in the industry. It comes after the company announced that it is close to hitting its target of generating half of its revenue from the fast-moving emerging markets. Further work is due to be carried out to establish in which way that the reorganisation will be able to come to fruition.

The savings are expected to be made over the next three years and will form part of Diageo's restructuring programme. The company is undergoing a series of changes which will cost around £100 million to fully implement and it is hoped that it will help to carry on the strong performance that it has been turning out. It is not yet known whether the move will affect the organisation's supply chain jobs.

Diageo announced that the overhaul would have an impact on the delivery of group results for the year ending June 30th 2013. Officials explained that they will now be split in the following geographical areas: North America, Western Europe, Africa, Eastern Europe and Turkey, Latin America and Caribbean, Asia Pacific and Corporate.

The Smirnoff vodka and Johnnie Walker whisky company believes that this move will help it continue its strong performance within the drinks industry.

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