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.