Download - Operational Issues of Jack Daniels
OPERATIONAL ISSUES
OF JACK DANIELS
Prepared By:
Falil Mohiuddin Gaalib
ID - 0930083
Mashfiq Morshed
ID - 1010006
Brief History of Jack Daniel’s
Jack Daniel’s is the highest selling American sour mash Tennessee whiskey
which is best known for its square bottles and black labels.
It was registered and established, as claimed by the company, in 1866 by
Jasper Newton ‘Jack’ Daniel (although there are some controversies regarding
the date of establishment).
It is produced in Lynchburg, Tennessee by Jack Daniel Distillery which has
been owned by Brown-Forman Corporation since 1956.
HISTORY & MODERN ERA (CONTINUED)
Upon his death in 1911, Jack Daniel left the distillery to his nephew, Lemuel
Motlow and a cousin, Richard Daniel. Lemuel soon bought Richard’s share and
took over the running of the distillery.
Lemuel Motlow had four sons who jointly took over the distillery after his death in
1947. The sons, who had no male children, sold their business to Brown-Forman,
the huge distilling conglomerate in 1956, after receiving assurances that the
whiskey would not be changed. We are assured that this remains the case
to this day.
THE FAMILY
Whiskeys (Mass Production) that are offered by Jack Daniel’s:
Old No. 7: This Tennessee Whisky is named by Mr. Jack Daniel himself in 1887. It is made
in Lynchburg with spring cave water at jack Daniels distillery. It’s a sweet oaky whisky that
combines different barrels from different floors and from different location and putting
them together so that every barrel and every batch is identical to each other.
Gentleman Jack: As with Old No. 7, the distillate used to make Gentleman Jack is slow-
dripped through hard packed sugar maple charcoal before aging in new American white
oak casks. Gentleman Jack repeats this ‘mellowing’ process a second time after the aging
process to produce a softer, mellower whiskey.
THE FAMILY (CONTINUED)
Single Barrel: Jack Daniel’s Single Barrel is made by the same process as the standard
No.7 but tends to be aged for around 6 years, some 18-24 months longer than standard
No.7, although no age statement is shown on the bottle. The barrels selected for this
bottling are drawn from the top racks of the warehouse where, due to larger
temperature variations, the ageing effects are greater.
Tennessee Honey Liquor: Launched in 2010 and made by blending Jack Daniel's Old
No. 7 with honey liqueur developed in Brown-Forman’s Louisville plant to have a nutty
flavor reminiscent of hazelnut. A little spice is also added. Jack Daniel's Tennessee Honey
is appropriately distinguished by a bumble bee on its label.
THE FAMILY (CONTINUED)
Along with the mass produced whiskeys, Jack Daniel’s also produces ‘Special and
Limited Edition Liquor’ of various sorts which are sold to the customers through
specialized means such as online ordering or novelty shops.
For Example, their latest venture in this category is the ‘2013 Holiday Select’ which
may be deemed as an experiment by the Master Distiller. These may be seen as a
way to serve a niche market.
CORE COMPETENCIES Brand Value
High Quality and Unique Taste of the products which leads to customer retention
and loyalty
Diverse Portfolio of products which enables them to serve a large target market
Part of a Larger and More Experienced Company leading to excellent
management and control
Skilled and Experienced Employees leading to greater efficiency and effectiveness
Control over a Large Part of the Supply Chain from using simplest raw materials
instead of buying part produced inventory to making their own barrels, Jack Daniel’s
is in control.
MAJOR PROCESS DECISIONS Process Structure: Process Structure determines the process type relative to the
kind of resources needed. As Jack Daniel’s produces whisky so, process structure helps
them to determine what type of process they are going to follow and what type of
ingredients they are going to use for their production process. In general, they use
high volumes combined with standard products but there are exceptions (explained
later).
Customer Involvement: Customer Involvement means involving customer in the
part of the process. In terms of Jack Daniel’s, Customer Involvement is overall minimal
since Jack Daniel’s major products have not been tampered with for over a century
now. However, some products (Limited and Special Edition) do see significant
customer involvement.
MAJOR PROCESS DECISIONS (CONTINUED)
Resource Flexibility: This means employees and equipment can handle a wide
variety of products but in terms of Jack Daniels we have seen that their resource
flexibility is specialized because volumes are high and process divergence is low so
flexibility is not needed to utilize resources effectively that is why specialization
leads them to more efficient processes.
Capital Intensity: Capital Intensity means mixture of human skills and equipment
in a process. In terms of Jack Daniel’s, although they have a lot of machines backing
their operations, they are still majorly dependent on the human interaction.
Therefore, they may be considered to be a moderate automation company.
DIMENSION OF CUSTOMER CONTACT IN JACK DANIELS
Physical Presence
Absent
What is Processe
d
Product (Whiske
y)
Contact Intensity
Passive, Out of Sight
Personal Attention
Impersonal
From the process diagram
on the left, we can see that
dimension of customer
contact in Jack Daniels is
low.
PRODUCT PROCESS MATRIX FOR JACK DANIELS
(1) (2) (3) (4)Low-volume Multiple products with low Few major High volume, highproducts, made to moderate volume products standardization, to customer higher Continuous Flow order volume
ProcessCharacteristics
(1)Complex and highly customized process, unique sequence of tasks
(2)Disconnected line flows, moderately complex work
(3)Connected line, , highly repetitive work
(4)Continuous flows
Continuousprocess
Jobprocess
Lineprocess
Large batchprocess
Small batchprocess
Batch Processes
PRODUCT PROCESS MATRIX FOR JACK DANIELS
(CONTINUED) To produce their products, Jack Daniel’s follows:
Small Batch Process for ‘Special and Limited Edition’ products since many different
lines are produced simultaneously in relatively small numbers with a unique blend for each.
Continuous Process for Mass Produced Whiskeys since they are produced in high
volumes and require each and every product to be identical to its family members. Also, the
process needs to be conducted continuously since the demand for these products are high.
Therefore, it ensures that delivery is being given on time.
MAJOR PROCESS DECISIONS (AT A GLANCE)
Process structure Product Process (Small Batch and
Continuous Process)
Customer Involvement Low
Resource Flexibility Specialized
Capital Intensity Moderate
CURRENT PRODUCTION PROCESS
MASH BILL Mash Bill consists of 80% corn, 8% rye and 12% Barley.
Grain is milled using a roller mill and mixed with water from Cave Spring Hollow
It is heated to 100°C and then left to cool to 77°C at which point the rye is added
and then the barley.
The three grains are cooked at different temperatures based on what is optimal
just to solubilize the starches and so allow the yeast to convert this to alcohol
during fermentation.
The mash is then allowed to cool before being pumped into 40,000 gallon
fermentation vats.
FERMENTATION
While many distillers buy in dried distiller's yeast, at Jack Daniel’s they use a
proprietary yeast strain which they cultivate at the distillery on a diet of malt and rye.
Jack Daniel’s is often referred to as ‘sour mash whiskey’. Sour mash is a proportion of
the spent damp mash left in the fermenter from a previous fermentation.
The sour mash also contains some of the yeast needed for fermentation, helps keep
out wild yeasts and ensures a consistency between batches.
It takes 4 to 7 days for the yeast to convert the sugars into what the folk at Jack call
distiller's beer (wash).
DISTILLATION
The distiller’s beer (wash) is distilled in continuous copper stills.
The wash enters and passes through 19 progressive trays where steam separates
the alcohol.
The alcohol rises up the column whilst the waste liquid falls to the bottom.
The spirit leaves the condensers at the rate of 50 to 60 gallons a minute per still
and they operate constantly day and night, only being shut down for cleaning and
maintenance.
CHARCOAL MELLOWING
The clear distillate which emerges from the condensers after distillation is dripped
at a rate of 3 liters (eight tenths of a gallon) per minute.
It is done through one of 72 large white oak vats filled with 10 feet of densely
packed hard sugar maple charcoal.
It takes 4 to 6 days for the spirit to trickle through.
AGING
The charcoal mellowed spirit is aged in new charred white oak barrels for over 4
years (around 52 months).
The casks are stored in 81 ageing warehouses covering 2,000 acres atop the hills
overlooking Lynchburg.
Once placed in a rick on the floor of a warehouse each barrel is left undisturbed
until its contents are judged ready to bottle.
Brown-Forman also operates their own cooperage and is the only American
whiskey company to make their own barrels.
BOTTLING
When the whiskey reaches maturity, the contents of 200 barrels are combined and
reduced to bottling strength using de-mineralized cave spring water.
Each batch is bottled separately.
There is no blending of batches at the bottling hall.
RECOMMENDATIONS
The company has been around for almost a 150 years and there is little that can be
recommended to them that they already do not know. However, there are certain
aspects that may need special consideration from Jack Daniel’s Management:
Introduce new product lines to capture a larger portion of the market
Move from being a moderately automated company to a highly automated one as that
would boost efficiency and productivity.
Move from being specialized to flexible as this would protect the company from losing
business in times of high labour turnover.
RECOMMENDATIONS (CONTINUED) In the bottling function, instead of using each batch separately, we would suggest a blending of
batches since this would ensure that all the bottles are of the same exact quality instead of
some bottles being better than others (due to errors in production or likewise).
Increase Production capacity since Jack Daniel’s along with the entire alcohol industry has seen
a steady rise in alcohol consumption for the last 20 years.
Increase customer contact through quizzes and surveys. E.g. Ask people what they would like
to drink next from Jack Daniel’s.
Hold cocktail competitions open-for-all where the contestants are asked to make one cocktail
using one of Jack Daniel’s drinks as the main ingredient thereby allowing the company to figure
out good cocktails to recommend to customers through advertisements, bottle covers, etc.