Executive Summary

Guinness was established in 1759, it is an iconic brand
and the world-leading stout. The main markets it is sold in are: Great Britain,
Ireland, Nigerian, Unites States and Cameroon. Diageo owns Guinness, which are the world’s
largest producer of spirits and a key producer of beer; with its headquarters
in London, England. It was the world’s largest distiller until being overtaken
by China’s Kweichow Moutai on 9 April 2017. (Wikipedia, 2017)

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Guinness is famous for its Irish province in exceptional colour;
the most prestigious of black beers brewed in 50 countries and enjoyed around
150 worldwide. The perfect Guinness is a “two-part pour” and takes 119.5 seconds
but one thing is never in doubt Guinness is worth the wait.  (Diageo, 2017)

 

Supply Chain Definition

A supply chain consists of all the parties involved,
directly or indirectly in fulfilling a customer’s request. The supply chain not
only includes the manufacturers and the supplier but also transporters,
warehouses, retailers and customers themselves. It is the raw material,
information and services typically crossing several different organisations
involved in producing and delivering a product or service to an end user. (C.
H. Fine) Any company that has a flow of material, products, information or cash
has qualifies as having a supply chain. The supply chain has five basic
functions: Plan, Source, Make, Deliver and Return.

 

Plan

·        
Assess
all supply chain resources: people, material, equipment, activities and
information

·        
Aggregate
and priorities demand requirement; these are generated by the customer

·        
Plan
inventory, distribution, production and raw materials

·        
Plan
capacity for all products and distribution channels, a distribution channel is
a path which supply moves downstream to the customer

Source

·        
These
are activities needed to acquire materials to create products, activities such
as purchasing, receiving, inspections, hold and issuing of inventory

·        
Sourcing
includes everything from obtaining raw materials, to finished good, and
professional services

·        
The
source function is simply to procure materials and services to meet demand

Make

·        
These
are the activities required to make the product, they may include request and
receiving materials, building and testing product, packaging, holding and then
releasing for delivery.      

·        
The
focus is to transform the materials and services to meet demand

Deliver

·        
These
are the activities to deliver the product to the customer. For example,
generating quotes, configuring and installing the good or service.

·        
Configuring
goods and payments, executing warehouse orders to ship the product

·        
Maintain
customer relations through the product lifecycle

·        
The
deliver function supports processes which provide the finish product and
service to meet the demand

·        
The
function of delivery is to ship the right product to the right place at the
right time.

Returns

·        
Your
need to plan reverse supply flow

·        
These
are the activities to receive product returns whether it be defective,
incorrect or excess returns; this could also include replacements or empty kegs
to be refilled.

 

These five basic operation functions not only describe
the supply chain as a whole but extend to each individual entity within the
supply chain from the retailer back up to the supplier.

 

Brief History of Guinness

In 1759, at the age of 34, Arthur Guinness signed a lease
for the St. James’s Gate Brewery, Dublin. He leased the brewery for 9000 years
at an annual rent of £45. The brewery was only 4 acres in size, disused, and
had little brewing equipment. Despite this, Arthur quickly built up a
successful trade and by 1769 he had begun to export his beer to England. In
1997 Guinness Plc merged with Grand Metropolitan Plc in a £24 billion merger. A
new company was formed called ‘Diageo’ Plc. The name ‘DIAGEO’ was derived from
the Latin word for ‘day’ and the Greek word for ‘world’, because every day,
around the world, millions of people enjoy the company’s brands. Brewhouse 4, a
state of the art brewery at St. James Gate, Dublin, officially opened in 2014.
The new brewhouse is one of the most technologically advanced and
environmentally sustainable in the world, and is also the largest stout brewery
in the world. The Brewery consumes over 100,000 tonnes of Irish barley a year
and continues to be a major contributor to the Irish economy. Guinness today is
sold in over 150 countries around the world and 10 million glasses are enjoyed
daily around the world.
(Guinness-storehouse.com, 2017)

 

Current Market

Alcoholic beverage market has seen steady growth over the
previous years however with recent political and geopolitical events, such as
Brexit, no one can be too sure as to what the future holds. To get some comfort
in the fast paced and ever-changing market consumers are looking for
traditional and authentic products. This doesn’t eliminate the need of
innovation, instead it emphasises the past as a reliable source of innovation,
the use of modern and innovative packaging ultra traditional beverages can
entice new customers. The use of traditional recipes and authentic products
with the launch of new product designs has seen better results for some of the
leading beverages brands. Nobody knows the sure how productive is going to
affect the economy and the beverages market. Trade agreements could cause a
rise in alcohol tax, this could bring uncertainty to the drinks industry. (Ziemys, 2017)

 

Process

Guinness is
a stout, it is made from water, barley, roast malt extract, hops, and brewer’s
yeast. A portion of the barley is roasted to give Guinness its dark colour and characteristic taste. It is
pasteurised and filtered. This is all done in Dublin behind the famous gates of
St. James Gate brewery. They produce over 50.9 million barrels of beer each
year. (Wikipedia, 2017)

 

Products

Guinness has been known to call its products healthy beer
because of its antioxidant compounds. It is estimated annual sales are over
850,000,000 and its recipe includes ingredients such as Brewers yeast, hops,
roast malt extract, barley and the main ingredient water. Guinness gets its
unique taste after roasting a small portion of Bali this also gives it its
colouring which is known as the darkest shade of Ruby. These older different
types forgiveness products they have produced over the previous years:

·        
Guinness
Draught

·        
Guinness
Mid-Strength

·        
Guinness
Foreign Extra Stout

·        
Guinness
Red Harvest Stout

·        
Guinness
Original/Extra Stout

·        
Guinness
Bitter

·        
Guinness
Special Extra Stout

·        
Malta
Guinness

·        
Guinness
Extra Smooth

·        
Guinness
Zero

·        
250
Anniversary Stout

·        
Guinness
Blonde

In more recent years Guinness has also been associated
with manufacturing craft beers called West Indies Porter and the Dublin Porter.

Packaging

Guinness has a very distinctive logo,
the harp. Which has had little changes at all since it was designed in 1759.  As you can see from the image below, the
design has become more simplified, but the core harp logo is still there.
Guinness use a distinctive black can or dark brown bottle with the white logo
to make a distinctive product with a clear brand image.

Labelling

 

When labelling food and drinks it is essential to outline what is in the
product, as this will make the consumer aware of what they are eating or
drinking. It allows people to know the amount of fat, sugar and cholesterol in
the product, so that people can chose other products to suit the dietary
requirements. This could have an effect on the supply chain for a product if
people decide to pick an alternative, as this will lower consumption and lower
demand. All alcoholic beverages also show the (ABV%) alcohol by volume, and a
link to the drink awareness website. This too could put consumers off your
product as they may not want to consume alcohol due to diet or medical issues
such as pregnancy. Below you can see the Guinness labelling and nutritional
value per serving: 

(Weightlossresources.co.uk, 2018)

Distribution

Every day more than 10 million glasses
of Guinness drunk around the world. Annual sales of Guinness exceeded more than
850,000,000 L or roughly 1 .5 billion points worth.  That’s despite an overall decline in Guinness
consumption since 2001. Guinness is brooding over 50 countries around the world
and is consumed in more than 150. The main markets it is sold in are: Great
Britain, Ireland, Nigerian, Unites States and Cameroon.

Diageo has signed an exclusive five-year deal with beer
producer AB InBev for the distribution of Guinness in mainland China, which is
expected to boost its sales to two million litres within one year. Domestic consumption of
imported beer in China rose by 40% in 2016 to take 3.6% of China’s market, From
January to July, China imported 400.9 million litres of beer worth about US$410
million from, representing a 6.91% jump in volume and a 6.76% jump in value
compared with the same period last year. This shows this is a huge market for
Guinness to enter into, and shows they are a worldwide company that can
distribute their products to the other side of the world. “China is the single
largest alcohol beverage market in the world and the beer category is rapidly
premiumising. We would likely to fully tap the growth potential of Guinness as
a premium product,” added Chun Ho Chu, Diageo’s managing director of China
operation. (The Drinks Business, 2017)

 

Quality Control

Quality control is a vital part of
the supply chain, it ensures all products are exactly the same and meet and
will meet the consumers’ needs and desires. It is essential that the raw
materials are checked so that the end product does not have any defects. If you
have any bad raw materials they effect the end product, supply chain managers
are there to ensure that the end products meet their expectations, they also
protect the integrity of their company’s operation. Having good quality control
creates an efficient business that will minimise waste at high levels of
production.

 

Sustainability/Environmental
Impacts

“Development that meets the
needs of the present without compromising the ability of future generations to
meet their own needs.” (Brutland Report, 1992) Most companies now recognize that a sustainable supply
chain is no longer just an optional, it’s a business imperative, critical to
the success of the organization as a whole in a perilous world. (Accenture.com,
2018)

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