SABMiller Continuous Improvement - events.etracc.net

1 Competitive Advantage Generated Through the Global Deployment of a Continuous Improvement Programme Ed Koch Head of Manufacturing Development Contents SABM iller some context Operational Excellence at SABM iller The SABM iller Manufacturing Way Results Summary SABM iller . some context Scope of our Operations Today 200+ brands owned Presence in 75 countries, across six continents 140+ breweries, 20+ bottling plants, 10+ maltings Almost 70 000 employees 213 million hectolitres of lager sold US$26 350 million group revenue to Mar 10 *. US$4 381 million EBITA to Mar 10 *. * Not Audited Where We Operate . Reported Volumes and Earnings Contribution (March 2010).

2 (hl'000). Earnings Contribution (EBITA) Total Sales Volumes 261,447. 3% Lager 212,576. Soft drinks 43,509. 19%. Other alcoholic beverages 5,361. 31%. 2%. Latin America Europe North America 12%. Africa Asia South Africa Beverages 19% Hotels and Gaming 14%. International Brands Grolsch Premium Lager The Dutch premium quality lager Miller Genuine Draft The original cold-filtered draft beer Peroni Nastro Azzurro Italian style in a bottle Pilsner Urquell The Pilsner from the original source Key Regional Brands Aguila Castle Miller Lite Snow Tyskie Other Regional Brands SABM iller owns over 200 regional beer brands, including: 2M (Mozambique).

3 Pilsener (Ecuador). Atlas (Panama). Carling Black Label (South Africa) Pilsener (El Salvador and Castle Lite (South Africa) Honduras). Club Colombia (Colombia) ari (Slovakia). Cristal (Peru) St Louis (Botswana). Dreher (Hungary) Timisoreana (Romania). Gambrinus (Czech Republic) Lech (Poland). Hansa Marzen Gold (South Africa) Velkopopovick Kozel Haywards (India). (Czech Republic). Kilimanjaro (Tanzania). Zolotaya Bochka (Russia). Nile Special (Uganda Becoming a Global Brewer First acquisitions in Europe 1988 Compania Cercercera de Canarias in Canary Islands 1993 Dreher in Hungary 1895 Foundation of South African Breweries 2003 2008 2008.)

4 And launch of Castle Lager Regional and product expansion Acquisition of Acquisition of MillerCoors 1897 Listing on Johannesburg stock exchange 1978-82 Botswana, Lesotho Birra Peroni, Grolsch, The JV created, 1898 Listing on the London stock exchange and Swaziland Italy Netherlands USA. 1895 2010. 1910 Expansion into Zimbabwe 2002 Creation 2005 Merger with (formerly Rhodesia) of SABM iller Grupo Empresarial following purchase Bavaria Global growth begins of Miller Brewing 1993 Uganda Company 1994 Angola, Mozambique, Tanzania, Zambia, China 1995 Poland 1996 Romania 1997 Ghana, Slovakia Acquisition in South Africa 1998 Russia 1956 Ohlsson's, Chandlers Union Breweries 1999 Czech Republic 1975-79 Old Dutch, Whitbreads, Swaziland 2000 India breweries, beer interests of the 2001 El Salvador, Honduras, 1999 Movement of primary Rembrandt Group attaining 99%.

5 Strategic alliance with listing to London market share Castel Group in Africa Stock Exchange Our Strategic Priorities SABM iller has a clear strategic focus, at the centre of which are our four strategic priorities: Creating a balanced and attractive global spread of businesses Developing strong, relevant brand portfolios in the local market Constantly raising the performance of local businesses Leveraging our global scale Operational Excellence . Technical Strategic Priorities 1. Building pride in the technical 2. Enhancing our fundamentals of reputation for our brands. operational excellence. 3. Developing a reputation for product and 4.

6 Enhancing the packaging sustainability of innovation. our supply chain. Evolution of Operational Excellence in SABM iller Increasing Performance Strategic Operating Practice (SOP). Reduced Variability & Lead time Best Operating Practice II (BOP II). Manufacturing Way 1. OD Self-sufficient teams 2. Multi-skilling 3. Asset Care & QC at Source The SABM iller Best Operating Practice (BOP). 1. Process Control 2. Performance Measurement 3. Plant Availability Quality and Production Upgrade Strategy 1988 1992 1996 2000 2004 2008. Approach to Operational Excellence PHASE 1. Principles Principlesand andphilosophy philosophythat thatensures ensuresanan IMPROVE & SUSTAIN MANUFACTURING.

7 Integrated integrated approach for Operational Excellenceinin approach for Operational Excellence Principles Principles PREPARE AND ENABLE CHANGE, the thecontext contextof ofbusiness businessstrategy. Longterm term thinking with a business case for change. thinking with a business case for change. CAPABILITY. Build Buildan anorganisation organisationtotoimplement implementand and sustain operational excellence including Organisational Organisational sustain operational excellence including structures, structures,roles rolesand andjobs. jobs. Model Model Enable Enableperformance performanceandandcapability capability transformation transformation through changeleadership through change leadership and a deliberate approach to learning.

8 And a deliberate approach to learning. Competency Competency and andCapability Capability Enable PHASE 2 Enablecontinuous continuousimprovement improvementthrough through collaboration collaboration and development ofnew and development of new Improvement OF. MANUFACTURING. competencies. competencies. Continuous . CAPABILITY. WCM Processes Processesto toEnhance EnhancePerformance WCM Work Work Performance Practice including including teamwork, standardwork, teamwork, standard work, Practice waste elimination and other work Development Development waste elimination and other work practices. practices. Deployment of the Manufacturing Way via a decentralised collaborative model Head of MDEV.

9 MDEV Hub Leader MDEV Hub Asia Leader South Africa Group leadership MDEV Hub MDEV Hub Team Leader Leader Africa MDEV Hub MillerCoors Lead MDEV Country MDEV Country Country Country Leads Leads Lead Lead Europe LATAM Regional Country Hub Lead Country Team Country Lead Lead Country Brewery Country Consultant Team Lead Brewery Consultant Brewery Consultant Partnership with CCI. SABM iller's partnership with CCI extends more than 20. years. Currently CCI actively consults in over 50 of SABM iller operations. It is fair to say that CCI has supported SABM iller's global expansion by providing thought leadership and consulting support into the operational excellence approach.

10 Operational excellence has been fundamental in driving SABM iller's growth. Results of the SABM iller CCI Partnership The Global Evaluation of Manufacturing (GEM). Excellent processes leads Measured by Global KPI's, GTS. to excellent and sustainable WCM. Unsustainable Excellence in Results results. Results Excellence Therefore SABM iller measures operational excellence in Incorrectly terms of both the what we Focused WCM achieve (Results) as well as Programme the how we go about achieving our results Excellence in Work Practices (Work Practices and Processes) Measured by GEM. The GEM is intended to measure the maturity of Work Practices.