Diageo changes Global Supply Chain Organisation and Footprint

Diageo has announced that its Global Supply and Procurement operation will be refocused to enhance alignment between Global Supply and Diageo’s 21 key markets. Responsibility for local operations will be transferred to the markets and regional structures will be reduced. The Global supply organisation will continue to be responsible for ensuring excellence across all operations. This change follows the reshaping of the in-market organisations through the implementation of the 2011 operating model review and is a consequence of Diageo’s increasing presence in new faster growth markets.

Savings of £60 million per year

Further work will be required to establish the exact nature of the reorganisation to be made. However an initial review has already established that efficiency-driven cost savings can be delivered which together with savings from footprint changes and cost reductions in respect of the regional supply organisations are expected to amount to approximately £60 million per annum. These savings are expected to be achieved in 3 years. Costs associated with the restructuring are estimated to be approximately £100 million.