16. JV - CARLSBERG - ISAAC SHAPES.pdf

8/10/2019 16. JV - CARLSBERG - ISAAC SHAPES.pdf

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Benefits of Quality IMS

based on ISOManagement Standards

Dr. Isaac ShepsBaltika PresidentCarlsberg Group Senior Vice President Eastern EuropeICONTEC, Cartagena, August 2014


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This is Carlsberg Group today

No.1in Northern & Eastern Europe andfourth largest brewer in the world

150markets around the world

500different beer brands

40 000employees on three continents

36 000 000 000bottles of beer sold in 2013


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Our three regions at a glance

WesternEurope

% of totalbeervolume

% of EBIT

EasternEurope

Asia

2013

2013

Group

3

41 35 24

47 36 17

(2009: 43%) (2009: 44%) (2009: 13%)

(2009: 41%) (2009: 52%) (2009: 7%)


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Eastern Europe Ensure Profitable Growth

BEL RUS

Olivaria No. 1 Market share: 29% Breweries: 1

RUSSI

Baltika No. 1 Market share: 39% Breweries: 10

UKR INE

Carlsberg Ukraine No. 2 Market share: 27% Breweries: 3

K Z KHST N

Carlsberg Kazakhstan No. 2 Market share: 32% Breweries: 1

UZBEKIST N

Carlsberg Uzbekistan Breweries: 1

ZERB IJ N

Baltika-Baku No. 1 Market share: 73% Breweries: 1

4


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Carlsberg Group owns 4 of the top-10 beer brands in Europe

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1 Baltika 13.3

2 Heineken 12.7

3 Carlsberg 8.6

4 Efes 8.35 Amstel 6.9

6 Tuborg 6.7

7 Obolon 6.5

8 Kronenbourg 6.39 Fosters 6.3

10 Chernigivske 6.1

Source: Canadean Wisdom, 5 March 2014

Top 10 Beer Brands

in Europe 2013 (million hl)


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6

Baltika Breweries Overview


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Baltika is as big as Russia

10 breweries, 3 malt houses, and sales offices in 115 citiesTotal production capacity 51 mln dal/month

Breweries Malt houses

6.5YAROSLAVL

4.5CHELYABINCK

4.5NOVOSIBIRSK

2.0KRASNOYARSK

2.0

2.0

6.5

4.5 KHABAROVSK

ROSTOV-ON-DON

TULA

12.0STPETERSBURG

VORONEZH

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Baltikas market share is over 2 times bigger thanthe nearest competitors

Baltika 38.6%

AB Inbev 13.9%

Efes 13.3%

Heineken 13.7%

Ochakovo 2.8%

MPK 2.5%

Source: AC Nielsen, Urban + Rural, 2013

Other s 15.2%

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Baltika has irresistible beer portfolio

Super-premium

Premium

Mainstream

Lowermainstream

Discount

Non-beer

1

1

1

1

1

4 kvass 1energy drink 9


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A Management System ImplementationProcess

Advanced ManagementSystems

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Development of Competitive Factors

QUALITY

EFFICIENCY

INNOVATION

60 70 80 90

ENVIRONMENT

AGILE

QUALITY

EFFICIENCY

INNOVATION

FLEXIBILITY

QUALITY

EFFICIENCY

INNOVATION

EFFICIENCY

INNOVATION

00

SOCIAL

ENVIRONMENT

AGILE

QUALITY

EFFICIENCY

INNOVATION

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Alice: You cant play like that. The Queen: Thats the way we play here.

The Queens Croquet -Ground

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13

Stop Demotivating Your Employees David Sirrota, Louis Mischkind,and Michael Irwin Meltzer,Harward Management Update, volume11,Number 1,Jan.2006

Most companies have it all wrong. They donthave to motivate their employees. They have to stop demotivating them.

In about 85% of companies employeesmorale sharply declines after their first sixmonths and continues to deteriorate foryears afterward.

Source: survey of about 1.2 M employees at 52 Fortune 1000 companiesfrom 2001 through 2004, Sirota Survey Intelligence

Strategy Workshop


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The Business-Quality-Marketing Triangle

Business

Marketing Quality

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Quality Productivity

Organization QualityProduct Quality

The InterestedParties Model

Garvins 8Quality Dimensions

Perception

Identifying Product Attributes

The new Quality Attractive Quality

The System Concept ofQuality Management

Total and PartialProductivity

Partial ProductivityIn the Beer Industry

The relation betweenQuality and Productivity

The relation betweenQuality, Productivity and

Financial Outcomes

Quality

MarketingBusiness

Quality and Productivity

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HAMURABI LAWS (1700 b.c.)

No. 229: If a constractor built up a house which prooved notto be strong and falled apart and killed the owner, thecontractor should be killed.

No. 234: If a boat constructor build up a boat and if it breaksapart in the very same year, the constructor should repare theboat on his account

Quality is as old as humanity

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Egyptian Quality Control 1450 b.c.

From an Egyptian tomb painting, Thebes, C. 1450 B.C. Theworkman

at the left is dressing the stone block while the inspector at

the rightchecks the quality of the work with a piece of string

Source: Norman de G. DaviesThe Tomb of Rekh-mi- r at the Thebes, Vol.2, Pl.LXII

New York, Metropolitan Museum of Art, 1943

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1910-1930 Quality = Conformance to instructions

1930-1950 Quality = Conformance to standards

1950-1960 Quality = Conformance to use

1960-1970 Quality = Conformance to demands

1970-1980 Quality = Conformance to needs

1980-1990 Quality = Conformance to expectations

1990-2000 Quality = Conformance to views of life

2000 Quality = Conformance to social values

The Quality Evolution

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Production Quality

No Variance

Every Drop of Beer in Every Bottlein Every Production Batch,

until Expire Date, Always the same.

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Notes:L = $ lossc = cost coefficient

(constant)x = quality characteristic

under considerationT = target value

Lower specificationbound

Upper specificationbound

X Quality CharacteristicTarget

$- Loss

The Quality of a Product is the Minimum Loss

Imparted by the Product, to Society from theTime the Product is Shipped

GENICHI TAGUCHI

T+S T S

L=c(x-T)2

L

Genichi Taguchi

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Drink me Eat me

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Would you tell me please said Alice a little timidly why are you painting these roses?

Two began in a law voice, Why, the fact is, you see, Miss,this here ought to have been a red rose tree, and we put awhite one in by mistake .. .

Right First Time

Page 2323


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Theres nevertime to do itright buttheresalways time

to correct it.

Culture Change

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Understanding your customers (inside & outside) needs andexpectations, is a prerequisite to their fulfillment.

It is imperative to understand those expectations and toinclude them in the specifications of products, services,processes.

The definition of quality as Meeting Customer Expectationswill fulfill customers expectations only when there is fullcorrelation between the customers expectations, needs anddemands.

Quality = Meeting Customers Needs and Expectations

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Product Quality

k h f ff


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Sergio Zyman, Marketing Chief Officer Coca-Cola Co.

RESE RCH

RESE RCH

RESE RCH

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Kanos 3 Types of Quality

Must be Quality a quality attribute that if not existing in a productor if not well performing it will cause to a non satisfied customer, butwhen that attribute exists it wont add to the customers satisfaction.For example if a car has bad brakes the customer will be for sureunsatisfied, but when they exist it doesnt add to his satisfaction asthis is the way it should be in any car.

One dimensional Quality - a quality attribute which by each increaseof it the customers satisfaction increases too. As example, with eachimprovement in the fuel consumption of our car our satisfaction willincrease.

Attractive/Charming Quality - a quality attribute which doesntcause dissatisfaction when not existing but when it exists it surprisesthe customer and ads to his satisfaction. The customer is delighted,charmed or, in other words, attracted to that product. As example, acars air condition system that spreads pleasant odors in the car.

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R l i hi b i f d


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Relationship between various factors andcustomer satisfaction ISO/CD.3 10004

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Attractive / Charming Quality of Prof. Kano

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Regular Quality

Non-Satisfied

Customer

SatisfiedClient

CharmedCustomer

InsufficientQuality

CharmingQuality

CharmingQuality

SufficientQuality

3 W t C t N P d t ith I h t


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3 Ways to Create New Products with Inherent Attractive Quality

Technology developing a new technology and addingit to the existing product/service.

Inspiration and Genuity depending on genius whowill come up with original ideas.

Marketing research learning by marketing researchmethods about the product/service environment, theways it is used and the values of it to the customers.

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Brand Attributes

Brand Name

Brand Positioning Reputation Past Experience Package Advertising Level Quality Cues ?????

Company Attributes

Company name

Country of Production Plant Reputation Size of Company ?????

Product Quality attributes

Natural and quality goods Pure, tasty water Good recipe Following GOST and standards Modern equipment Packaging quality ?????

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Quality Perception Model of Baltika

September 2013 Advantages of ISO standards application

Perceived quality

Ingredient supply

Equipment

Recipe

Liquid

Price

Corporate FactorBrand Factor

Category myths

Word of Mouth

Employees Stream

Corporate Stream

Customers stream

Suppliers stream


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Quality of an Organization


Quality = to meet the needsand expectation of customers

Organization Quality = to meet the needs and expectations ofall interested parties in a balanced way

Customers of an organization =all interested parties

Organization Quality is the driver for sustainable

success!


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Quality at Organization level


PARTNERS/

SUPPLIERS SOCIETY EMPLOYEES SHAREHOLDER S CUST OMERS

INTERESTEDPARTIES

Q u a l i t y o f Wo r k L i f e

C o n t r o l o r a u t o n o m y.R e c o g n i t i o n .B e l o n g i n g .Progress and Development External rewards .D e c e n t w o r k i n g c o n d i t i o n s D i g n i t y.

Sus t a inab l e G r o w t h

& P ro f i t ab i l i t y

QUA LITY OF PRODUCT

AND SERVICE

ENVIRONMENT

PROTECTION

&

SOCIAL

RESPONSIBILITY

Su s t a inab l ePa r tn e r sh ip

ISO 9000Family ofstandards,

ISO 22000

OHSAS18000Family ofstandards

ISO 14000Family ofStandards

ISO 26000

Our understanding is that sustainable success is a result of an organizationsability to achieve its objectives in the long term with balanced consideration

of the needs and expectations of all its interested parties (customers,investors/shareholders, employees, suppliers, partners, and society).


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Quality of Work Life (QWL)

Control or autonomyRecognition

Belonging

Progress and development

External rewards

Decent working conditions

Dignity

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A Good Wife Can Bring Balance in Life

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Integrated Management System

Baltika focuses on the needs andexpectations of all interested

parties : shareholders, employees,society, suppliers and partners. At thesame time our customers remain thehighest priority for the company.

Our customers and consumers areat the heart of every decision wemake. We put ourselves in the shoesof our consumers and customers andhave a detailed in-sight into theirneeds and preferences.

We base our strategies and plans on

this insight and continuouslyevaluate the ways we work toimprove their experience of ourbrands, our services and our people.

A shift from functional to processapproach

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IMS policy in large, part 1

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IMS policy in large, part 2

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Transition to Integrated MS (IMS)

New organizational structure for dealing withmanagement systems was implemented by Baltikaduring the last year

Specialists in the areas of Work Safety, Ecology, FoodSafety and Customer Complaints became a part of

integrated service reporting to Quality ManagementDirector

Quality management departments were established atthe breweries engaging the experts in managementsystems headed by functional champions appointed inHQ



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Quality Management Department

Quality ManagementDirector

Quality ControlDepartment

ManagementSystems Technology

TechnologyControl

40 Advantages of ISO standards application

ResearchCenter

QualityManagement

(ISO 9001)

EnvironmentalManagement

(ISO 14001)

Food SafetyManagement

(ISO 22000)

Health & SafetyManagement

(OHSAS 18001)

CustomerSatisfaction

(ISO 10002)

Planned ISO 50001(Energy management)

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Why IMS ?

Common methodology

Competitive factors

Efficiency and Effectiveness

Risk Management is the Ultimate Goal of


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Risk Management is the Ultimate Goal ofManagement Systems

All management systems/standards are aimedto minimize business risks in the differentareas they cover. In all managementsystems/standards generic steps of riskmanagement can be recognized. Those stepsare:

identification of critical aspects and risks;

assessment and prioritization of risks;

determination of requirements;implementation of monitoring and control systems.

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Risk Management

Risk Assessment

Prevention

Technical Human

Awareness Training

Hazard Detection

Alarm

Remedy Action

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Brand Equity - Building Blocks

Meet the needs and expectations of

Customers and Consumers(Product, Market, Mind)

Product Quality

Production Quality(No Variance)

Organization Quality Meet the Needs andExpectations of allInterested Parties

BrandEquity

Page 4444


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How will shoppers judge food companies?

9. Support for poorer nations10. Treatment of staff11. Profit

12. Local community13. Contribution to economy14. Job creation15. Amount to charities16. Executive pay

1. Cost2. Packaging3. Healthy eating

4. Product information5. Customer service6. Environment7. Where food is from8. Animal welfare

Source: IGD

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KLM Menu on the flight


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48

Baltika Breweries Economicbenefits of standards Case StudyDeveloped jointly by the International Organization forStandardization (ISO) and Baltika Breweries

June-September 2013


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ISO Study: Benefits of Standards Application

In May 2013 ISO initiated a project together withGOST R and Baltika to assess the benefits ofstandards application in the Company

The study considered use of national, regional,international and other consensus-based

management standards developed by accreditedorganizations


Agreed scope included 5 business functions of Baltika value chainwhich are mostly impacted by standards application: procurement,inbound logistics, production, distribution and after-sales service

An ISO project team visited Baltika in June 2013 for interviews withstaff in key management functions. The project was completed bySeptember 2013, main conclusions and highlights are presented onthe next slides


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Based on the performed calculationsit became evident that theapplication of various standardsgave Baltika Breweries savingsamounted to 3.4% of the annualaverage revenues for the last fiveyears (2008-2012)

Apart from the benefits of standardsthat could be quantified on the basis

of available data and estimations,there are other benefits resultingfrom the use of standards for theCompany mainly qualitative andprocess-based

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ISO study: Main results and conclusions



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Optimized information exchange using

less employee time as a consequence,

inter alia, of the implementation of the

ISO 9001 management system, leading

to higher transparency and sharing of

responsibility between managers and

better work discipline

Integration of the management systems

which reduced the number of corporate

documents; creation of one-pageabridged versions of normative

documents limited to key information

needed specifically at particular work-

sites

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ISO study: Other benefits (Organization)



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Research and development of new types

of beer and packaging based on GOST

standards played an important role in

developing and introducing new products

adjusted to consumer tastes and needs,

thus conserving Baltikas market share

under difficult market conditions

The implementation of ISO 22000

standard and their prerequisite programs

have led to enhanced control of theproduction process resulting in stable

and high quality and food safety, as well

as customer and consumer satisfaction

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ISO study: Other benefits (Production)



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Company standards based on GOST andother standards allowed flexibleredistribution of production and sale ofproducts to different regions using acomputerized optimization tool for theallocation of production and sales where

it is most profitable for the Company

Use of EAN-standard permitted easiertracing of products sold on the marketthanks to barcodes and the traceability

system, resulting in prompt correctiveand preventive actions. Additionally, theuse of EAN-based barcodes andtraceability system led to more efficientwarehousing with fewer employees

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ISO study: Other benefits (Distribution)



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Due to increased awareness of itsenvironmental impacts andimplementation of ISO 14001, Baltikawas able to reduce environmental risk.Lesser environmental damage resultedin fewer penalty sanctions and betterCompany reputation

Reduction of CO 2 emissions: This is anenvironmental benefit that is currentlynot regulated in Russia so that thereduction has therefore no directfinancial benefit for the Company, buthelped Baltika to fulfill Carlsberg

Group policies on CO 2 emissionreduction

Using returnable bottles as much aspossible is also a way to reduceenvironmental impact

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ISO study: Other benefits (Environment)



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Conclusions


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The Change Formula

SHAREDDISSATISFACTION

GUTSFIRST

PRACTICALSTEPSVISIONCHANGE =

WHY? WHAT? HOW?

RUSSIA 2015-17


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SCOPE Focus on beer as core

Selectively pursue market opportunitiesin support of our beer business

OBJECTIVESMarket Share

EBIT

TWC

COMPETITIVE ADVANTAGEStrategy Wheel

Elements of our strategy

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The Ingredients of Leadership

Unity of Purpose Clarity of Direction Consistencyof Message

ChallengingTarget

Toleranceof Mistakes

Focus on what can be done not why it cant

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Plans are nothing, planning is everything


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Plans are nothing, planning is everything D. Eisenhower, American President


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Challenging And Ambitious Targets

The greatest danger formost of us is not that our

aim is too high and wemiss it, but that it is toolow and we reach it!

Michelangelo

61Strategy Workshop


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The 3 C of Management

Competence be GOOD in what you are doing

Confidence express your views with NO FEAR

Caring show you CARE for 3 C

Customers

Company Colleagues

Strategy Workshop


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Quality is the difference betweenthings

(Aristo, 300 B.C.)

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Why international standards?

They said, "Come, let us build for ourselves a

city, and a tower whose top will reach intoheaven, and let us make for ourselves a name,otherwise we will be scattered abroad over theface of the whole earth."

The LORD said, "Behold, they are one people,and they all have the same language . And thisis what they began to do, and now nothingwhich they purpose to do will be impossiblefor them .

Therefore its name was called Babel, becausethere the LORD confused the language of thewhole earth; and from there the LORD scatteredthem abroad over the face of the whole earth.

Genesis, Chapter 11


d dh f f d


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Indira Gandhi, former prime minister of India

My grandfather once told me that there are two kinds ofpeople:

Those who do the work and those who take the credit

He told me try to be in the first group; there wasless competition there.

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Thank you!

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16. JV - CARLSBERG - ISAAC SHAPES.pdf