Diageo Scotch Producer
1.0 INTRODUCTION
Diageo Scotch Producer is multinational alcoholic beverage company which has its head office in London (United Kingdom). Guiness and Grand Metropoliton merge their companies and forms Diageo Scotch Producer. It is known as the world’s largest producer of spirits whose chief products are wine and beer, vodka, rum and whisky. Diageo is also the world’s largest producer of whisky which manufactures in 28 distilleries and also in two grain distilleries. Its products are sold in 180 counties. It has several offices in around 80 countries. It has approximately 25000 employees in the world which is huge in count. Diageo started treading on December 17, 1997 at the London Stock Exchange. As of now it is the 12th-largest company on the London Stock Exchange on the basis of market capitalization which recorded almost £34.5 billion on 2011. It has many famous alcohol brands like Johnnie Walker, Crown Royal, J&B, Ciroc and Ketel One vodkas etc. In Scotch production in the world Diageo holds the largest number of shares. In 2012, the accurate sell of Diageo was 10,762 £ million and its growth increased 6% compared to 2011.
2.0 PRODUCTS
Diageo has many brands that are very famous and acceptable by consumers. The products which are produced by Diageo which are given below-
SPIRITS- The Diageo brand areas is 17 of the famous 100 premium distilled spirits brands in the world, and seven of the top 20 premium spirits brands.
BEERS- It’s one of the second largest product is beer.
WINES-Chalone Vineyard, Blossom Hill, Justerini & Brooks, Vignobles Internationaux, Piat d'Or, Rosenblum Cellars, Dom Pérignon, Sterling Vineyards. These famous wines are produce by Diageo and they are very likable by consumers.
3.0 DIAGEO’S MISSION-
Diageo mission is customer centric. It understands the customers and their requirements and then researches, analyzes and develops new product as well as polishes its existing product. INNOVATION- Innovation is the reason for the success and popularity of their brands among customer because they know how the customers taste is changing with generation to generation.
TRUST- Diageo one of the main factor in successful business is trust. They always focus to trust the customer taste. It is not only with new customers but also with existing customers. They maintain this factor with its research and development management and best services.
EMPLOYEE MANAGEMENT- It’s another mission is employee improvement because it believed that good employee is one of the basic factor of the successful organization so they improve their employees by time to time training and monitoring.
4.0 DIAGEO KEY PERFORMANCE INDICATORS
KPIs (key performance indicators) present a bunch of scope centralized on those conditions of organizational execution that are the most hard to do for the present and future goals of an organization (Carol Taylor Fitz-Gibbon 1990). There are only a few KPIs in an organization, and they have certain aspects. Diageo follow those KPIs to achieve their mission.
2011/12 2010/11 Change Financial summary £m £m %
Net Sales 10,762 9,936 8
Marketing spend 1,691 1,538 10 Operating profit before exceptional items 3,198 2,884 11
Operating profit 3,158 2,574 18.4 Basic earnings per share before exceptional items (pence) 94.2 83.6 11.2 2011/12 2010/11 Change Financial summary £m £m % Basic earnings per share(pence) 77.8 76.2 2 Recommended final dividend per share (pence) 26.9 24.9 7.4
5.0 FISH BONE DIAGRAM SHOWS THE CAUSES OF A SPECIFIC EFFECT. CAUSE EFFECT
Process People Equipment
Problem
Material Environmen Managemen t t
Fish Bone diagram on the basis of Diageo services
6.0 FLOWCHART SHOWING CUSTOMER SALES ORDER FOR DIAGEO SCOTCH
Customer visits the liquor shop for Diageo products Customer checks for his favorite Diageo liquor product
Is Product Customer seeks for available? alternative Diageo product
Customer chooses the liquor
Purchase order generated
Customer pays the money
Home Customer collects Delivery the product Required?
Product is delivered
Customer leaves Customer details the store recorded
Inventory Updated
END
7.0 AFFINITY DIAGRAM
This is a technique that can be used to collect large amount of data and arranged in groups based on customer requirement ( Kawakita.j 1960). The below shown affinity diagram represents the Diageo’s activeness in customer expectation.
MAINTAING A SUCCESSFUL CI PROCESS
Understand Provide Establish Getting Improve customer training comfort management communication requirement commitment in all areas Consult Know quality Establish Involve middle Grant access to customer improvement measurement mang. & top information tool system mang. Steering committee
Interpret Investigate Develop Employee customer other effective Establish involvement requirement continuous connective consistent correct t in improvement action system reward system speca& design effort Break down Provide job barriers is Provide Make project security operational by project freedom to fail definition of improvement output
Provide middle Determine managers with Identify process staff support customer capability
Define Provide clear process program goal
Provide the time for Middle Mgr. to participate
Create a steering committee with real power
8.0 FMEA Analyses of Diageo’s services
Failure Mode and Effects Analysis (FMEA) is a model used to find out defects based on their severity, frequentness and detection (Dyer, Morris K, 2001). It focuses on the impotence in the design or method currently followed, and prioritizes and makes consecutive efforts to improve the most risky areas.
In our case this test has been performed on our Diageo services and the following defects have been found and mitigated.
Sev Occur Dete Risk Prod Poten Poten erity Poten rence Curr ction Prio Action Mitigati uct tial tial tial ent rity Recom on Func Failur Effect (1- Caus (1- Con (1- Nu mende /Respo tions e s of 10) es of 10) trols 10) mbe d nsibility or Mode Failur Failur r Proc e e ess RP Step N s The Diag Bad Produ 8 Fault 5 Mon 9 360 Quality manag eo qualit ction y itor of ement prod y of depart produ in product of ucts produ ment ction onc s product ct not mach e should quality respo ine ever be must nding was y 4 improve recheck used. mon d so the ths that service custom s er is always Respon satisfie sibility – d. manag ement Team. The Diag Probl Marke 8 Effect 4 Mon 7 224 Proper system eo em in ting ive itor marketi of prod distrib depart mark in ng marketi ucts ution ment eting onc strategy ng must not soluti e should be respo on ever be recheck nding not y 6 followe ed provi mon d. ded ths. Respon sibility – manag ement Team.
As it can be seen, that two potential failure modes have been found out. The highest RPN here in the two tests is 360 which denote the highest priority to improve the quality of services.
9.0 CUSTOMER REQUIREMENTS (WHATS)
Following are the Customer Requirements from Diageo in the four basis aspects in which it provides its services
Whats Meaning 1 Quality of Products The better the quality is the more the customers will tend to buy that liquor.
2 Brand name Customers will definitely look for the better brands as they have of reputation for serving better quality of liquors. 3 Taste The taste of the liquor plays a great role for the choice of Scotch selection.
4 Effect on Health If any liquor affects the health badly then people will stop getting attracted to it.
5 Cost of Product Customers may compromise on very high quality liquor having a high price and would prefer medium quality liquor with a comparatively reasonable price.
6 Product Makeover Makeover of the products also gives an impression to the customer. 7 Innovation Company must be innovative enough to bring changes in its products which can attract potential customers. 8 Variety of Products The company should have a various range of products to satisfy the customer needs.
9 Globally Procurable Any parts of the world would be able to buy the liquor of their favorite brand.
10 Age of the Product In order to store the liquor for a good number of years the company should preserve the liquors using proper procedures.
11 Liquor Style The choice of drinks depends entirely on the choice of taste of the customer or the occasion. 12 Aftertaste flavors Customers favors that liquor which have a good aftertaste flavors and have a long lasting effect 13 Customer Satisfaction The company should always try to research on constant innovation in taste and varieties of products so that the confidence of the customer grows.
14 Proper Concern The Company should be capable enough and rehearse assiduousness.
10.0 TECHNICAL REQUIREMENTS (HOWS)
Following are the methodologies which Diageo applies in order to fulfill the customer requirements.
How’s Meaning 1 Employee Training Employee training required so that they can work in a professional environment 2 Testing of Controls Mechanisms sketched out by its core management team over the various products in the market 3 Diversity in workforce Diageo consists of employees having diversified cultures and languages 4 Multitalented Employee Employees with several skills. 5 Sales Skills Skills required to sale a product or service. 6 Communication Skills Excellent communication skills. 7 Analytical Skills Ability to analyze complex problems 8 Ability to Synthesize Synthesize business details from different sources. 9 Creative Ability Creativity 10 Initiative Its initiatives throughout its operations, clients, supply chain and association. 11 Presentation skills Ability to represent well 12 Professional Team Able to perform all the jobs with a high satisfaction rate. 13 Knowledge of Industry Having experts with thorough erudition in various industries 14 Environmental sustainability The investment done strategically in environmental sustainability
11.0 HOUSE OF QUALITY
The attached excel file below shows the House of Quality designed using the above parameters (WHATS and HOWS).
HOQ.xls
12.0 DESCRIPTION OF THE HOQ
CUSTOMER REQUIREMENTS: In this section the customer requirements (WHATS) are analyzed and put into the left side of the House of Quality row-wise.
CUSTOMER IMPORTANCE: This section of the house of quality will compare the importance of the each WHAT to the other and give them a score. The score allocated to each WHAT is gotten from brain storming. TECHNICAL REQUIREMENT: Here we analyze the methodologies which Diageo applies in order to satisfy the customer requirements. The methods are put as the (HOWS) in the House of Quality.
RELATIONSHIP MATRIX: This is the segment of the house of quality is where connection between the WHATS and HOWS are presented. The main aim of this matrix is to improve the quality of the product (Hauser.J,2009). The correlation is measured either by using symbols or numbers in the order of the strength of the relationship. A score of 9 portrays a strong correlation between the customer requirements and the operational requirements, a score of 3 portrays a medium relationship and a score of 1 means a small relationship. If the correlation slot is left blank it means that the particular WHAT and HOW are not interconnected. In our House of Quality it can be observed that the testing of control of the Diageo liquor products has a strong correlation with their effects on health. This is because the more controlling measures Diageo takes the health of the customers will be less affected. Taste of the Diageo liquors however shows no relationship to the sales skills. In other words if employee’s sales skill is enhanced it will have no effect on taste of the liquors, hence no relationship. Cost of Diageo liquors is found to have a medium relationship to industrial knowledge of its employee’s in the sense that if the employees have much knowledge of the ongoing liquor market they will be aware of the prices of their competitive products and can estimate the cost of their own product.
THE ROOF: This part of the house is similar to the relationship matrix however it depicts the relationship between the methods which Diageo applies to satisfy the customer requirements. It compares each process and scores how it relates to another process with symbols meaning strong positive correlation, positive correlation, negative correlation and negative correlation.
Sales skills have a strong correlation with the communication skills; this means that if an employee of Diageo has a good communication skill it also improves his sales skills.
Multitalented employee however depicts a positive and improved impact on the analytical skills of an employee of Diageo and hence it is shown to have a positive correlation.
IMPORTANCE WEIGHING: This section shows the total weight age of the each of the technical requirements against the customer requirements. The importance score multiplies the scores from the relationships. The importance of processes can be ascertained from this matrix. It shows therefore that Professional Training of Diageo is the most important amongst the technical requirements with a score of 252 as to the Communication Skills of the Diageo employees that score lowest 51. TARGET: This section of the house of quality will help us to determine and measure the amount of change needed for each process. The units of measure for each process are given in the table as follows.
How’s Measurement units 1 Employee Training Number of trainings conducted in a year 2 Testing of Controls Quality of the Controls considered 3 Diversity in workforce Number of skilled employees from different areas 4 Multitalented Employee Talent quotient 5 Sales Skills Number of Sales made throughout the year 6 Communication Skills Ability of an employee to communicate properly 7 Analytical Skills Ability of an employee to analyze properly 8 Ability to Synthesize Ability of an employee to synthesize properly 9 Creative Ability Number of employees adept in creative skills 10 Initiative Initiatives taken throughout the year 11 Presentation skills Ability of an employee to give proper presentations 12 Professional Team Number of teams involved in professionalism 13 Knowledge of Industry Knowledge quotient 14 Environmental sustainability Ability of the company to sustain itself
12.1 Outcomes
Following are outcomes of the HOQ Among the methodologies which are used by Diageo to satisfy the customer needs, the most successful are Professional Training (252 points) Ability to synthesize (213 points) Testing of Control (201 points) Analytical Skills (201 points) Knowledge of Industry (198 points)
12.2 Recommendations It can be recommended from the above HOQ that Diageo should focus more on some of the methods namely Professional Training, Ability to synthesize, Testing of Control, Analytical Skills and Knowledge of Industry which are the most effective methods that can be used to convince the clients.
13.0 Conclusions
At this point, the customer requirement in the liquor market are taken in view while formulating the Customer Requirements (WHATS) by dividing the liquor sell of Diageo into three segments namely Spirits, Beers and Wines. Provisions are open so that modifications can be made due to any requirement in the upcoming years. The HOQ has been made based on the facts of Diageo Scotch that can be found in various websites. During the strategy making for the HOQ various concerns has emerged. For example, were the “customer requirements” properly identified in this case? Was the company methodologies provided are justified? How the individual requirements would be gauged? Is the HOQ format needed to obtain analogous custom? Nonetheless, it can be hoped that readers would find this to be a sagacious and constructive development. It will definitely be extended in the forthcoming days. REFERENCES
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