SCL HUB June 2016

1. • Confidential• Confidential
CREATING THE BEST
PERFORMING CONSUMER
DRIVEN SUPPLY CHAIN
FOR DIAGEO
SCL Hub Supply Chain & Logistics Event
London June 9th,

2. • Confidential
P
DIAGEO’S PURPOSE:
37,000
Diageo employees
£10.8bn
NSV
3.5 billion litres of drinks
180
Markets worldwide
135,000
customers
24,000 suppliers
12,000 Supply
employees worldwide
Celebrating Life, Every Day, Everywhere
£
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3. • Confidential
STEADY PROGRESS ON
OUR DDVN MATURITY JOURNEY
Cost
TARGET Service
MINDSET
Inside-Out
Outside-In
Stage 1
Siloed Goals
Stage 5
Value Creation
Network
Stage 2
Scaling Supply Chain
Functions
Stage 3
Integrated Supply
Chain
Stage 4
Demand-Driven Value
Networks
F12
F15
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4. • Confidential
TRANSFORMING OUR SUPPLY CHAIN
TO UNLOCK GROWTH
Extending our route to
consumer
Delivering Functional Excellence
Cost and value optimisation
Innovation that excites the
consumer
Winning in luxury
Exceptional and diverse supply
chain talent pool
Corporate Social
Responsibility leaders
Exploring next generation science
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5. • Confidential
DEMAND DRIVEN
From internally driven to outside – in focus
DDVN Customer Collaboration Smoothing Peak Deliveries
• ‘Sell out’ transformation
shared with investors
• ‘Market back’
synchronisation to meet
customer demand
• New relationships with
suppliers and distributors
• Segmentation of our
supply chains
• Collaborating with key
customers
• Building joint relationships
across supply & demand.
• CPFR process toolkit
deployed in key markets
• Supplier of the year awards
eg. Walmart Sam’s Club
• Synchronising end to end
business behind consumer
demand
• Driving out inefficiency
caused by artificial peaks
• Optimising drivers of trade
terms, cost to serve,
consumer behaviour
• Re-investing savings in
growth
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6. • Confidential
FUNCTIONAL EXCELLENCE
Leaders in Supply Chain effectiveness
Supply Chain Codification Performance Management CPRM
• Codification of processes
KPIs, performance
management and
governance
• Standardisation across
supply chain functions
• Implemented globally
• Rigorous disciplined
approach fundamental to
delivering £250m
productivity ambition
• Balance scorecard
approach
• Enables markets to be
ranked
• Benchmarked maturity
thresholds
• Facilitates best practice
sharing and targeted
interventions
• Foundation for our
analytics strategy
• Established front (risk
managers) middle
(treasury & governance)
and back office
(reconciliation) operations
• Integrated systems to
enable insight and
execution
• Expanded to 55% of our
commodity coverage
• Utilising leading tools of
futures, OTC swaps, etc
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7. • Confidential
EXTRA ORDINARY INNOVATION
Driving the top-line
Leading Product Innovation AGILE Supply Chain
Exploiting Next Generation
Science
• Innovation delivers significant
NSV and is key brand recruiter
• ‘World Class
Commercialisation’ process
driving productivity and speed
to market
• R&D growth model aligns R&D
to Brand Strategies
• ‘Whisky Union’ initiative using
blenders expertise – industry
best innovation award
• Segmentation of supply
chain for efficient,
responsive and agile SKU
• Creation of ‘luxury finishing’
line in Scotland and 3 ‘craft
lines’ in North America.
• Developing new
relationships and
requirements of suppliers
• Using low cost packaging
(Tetra Pak, BIB) to access
emerging markets
• ‘Smart bottles’ using ‘near
field’ technology to combat
counterfeiting and receive
targeted marketing
messaging
• Leading maturation
technology delivering
innovative new flavours
• Advanced robotics driving
line efficiency
• 3D printing of change parts
WHISKY UNION
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8. • Confidential
EXCEPTIONAL TALENT
Releasing the potential of our people and our business
Women in Supply Chain Leading Talent Review Process
• Addressing gender
imbalance ( Program W)
• Supply Chain Leadership
programme attended by
400 women
• Unlocking potential to
create competitive
advantage
• Senior women leaders
support delivery of
modular programme
• Advancing our capability as
talent builders
• Delivering transparent
understanding of talent
base
• Clear succession pools
ensuring talent continuity
• Standard global process
with executive sponsorship
• Ground-breaking program
for over 400 top leaders in
the organisation
• Designed to accelerate
individual and collective
leadership
• 18 month programme with
each participant assigned
external coach
• Significant Investment
Diageo Leadership
Performance Programme
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9. • Confidential
COST AND VALUE OPTIMISATION
Taking a bi model focus
Footprint Review Portfolio Tramlining
• Delivered over 10% savings
in 3 years
• Global Implementation of a
standard performance
management and visibility
process
• Up-skilled our global Move
community
• Increased service
performance
• Launched global review of
manufacturing and logistics
footprint
• Objective to drive most
efficient customer supply
solution
• Drivers to include cost,
service, tax, inventory,
market strategy
• Initial focus on Europe
followed by other regions
• Review of full SKU
portfolios
• Segmentation into
categories
• Each category has defined
tramlines for all material
specifications
• Rigorous oversight to
deliver product
competitiveness and
growth
Move transformation
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10. • Confidential
CORPORATE SOCIAL RESPONSIBILITY
Doing good is good business
Building Thriving Communities Environmental Impact Leadership in Alcohol
• Equipping people
(particularly women-
PlanW) with future skills
• Water of life programme – 1
million people access to
clean water
• Local raw materials sourcing
with farmers in Africa
• 10K graduates through our
Learning for Life programme
• No1 (Food and Bev) company in
CDP with max score of 100A
• One of 3 Bev companies Eur DJSI
• 95% ESG rating - FTSE4Good index
• Since 2007 : Water use rate reduced by
30%, carbon by 33% and landfill by 80%
• Ambitious 2020 targets published
• Applying Global Reporting
Initiative since 2014
• UN Global Compact signatory
• Creating a more positive
role for alcohol in society
• Supports over 300
responsible drinking
programmes in 40
countries
• 15,000 people trained in
DrinkIQ programme
• First spirits company to
disclose nutritional
information on labels.
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11. • Confidential
ANY QUESTIONS?