How drives Lean activities through WCM with a customer-oriented focus, while adapting to the new normal

Lean Café Dec’20

WCM / 2011-11-29 / 1 Who we are?

Emma Årman Christian Tage WCM Champion WCM Champion

15 years of experience 15 years of experience working with continuous in TPM and Lean within improvement (Lean, Six Tetra Pak. Sigma and TPM)

Carlos Ortiz Dirk Desiron OpEx & WCM director System Architect 10-15 years experience in Global Automation and Continuous Improvement (TPM) digitalization expert Combined with Production, Maintenance, Project Management roles among others

WCM / 2011-11-29 / 2 Remember the story?

WCM / 2011-11-29 / 3 Tetra Laval group

DeLaval

Sidel

Tetra Pak

WCM / 2011-11-29 / 4 End to end solutions From farmer to consumer

WCM / 2011-11-29 / 5 OUR VISION We commit to making food safe and available, everywhere

WCM / 2011-11-29 / 6 Social Responsibility

We are committed to social responsibility UN Global Compact including responsible sourcing, Principles Health for ourselves and our suppliers. & Safety − Corporate Governance Assurance system − Code of business conduct − Supplier audit programme Human & Labour Rights − Membership of the Supplier Ethical Data Exchange (SEDEX) Responsible Sourcing

Business Ethics & Environment

WCM / 2011-11-29 / 7 One company, three business

Services WCM / 2011-11-29 / 8 Packaging portfolio

Tetra Gemina® Aseptic ® Tetra Top® Aseptic Edge

® Tetra Prisma® Aseptic Tetra Brik Aseptic Tetra Wedge® Tetra Brik® Aseptic Aseptic Slim Leaf

Tetra Fino® Aseptic Tetra Brik® Aseptic Tetra Top® MiniV Base Crystal Tetra Evero®

® Aseptic ® Tetra Classic Tetra Rex Tetra Recart® Aseptic

WCM / 2011-11-29 / 9 Processing categories

DAIRY ICE BEVERAGE

CHEESE PREPARED FOOD POWDER

WCM / 2011-11-29 / 10 Processing portfolio Core technologies

BLENDING ● MIXING ● DOSING ● UHT TREATMENT

SUGAR DISSOLVING ● CARBONIZATION SEPARATION ● STANDARDIZATION ● HOMOGENIZATION

CURD MAKING ● HANDLING ● FILTRATION CLEANING-IN-PLACE ● ASEPTIC BUFFERING

EVAPORATION ● DRYING ● POWDER HANDLING FREEZING ● MOULDING ● EXTRUSION WCM / 2011-11-29 / 11 Our continuous improvement program

WCM / 2011-11-29 / 12 What is Class Management (WCM) ? WCM is a culture, our way of working

The philosophy around WCM is based on the principle…

“Energy comes from the whole organization”

…meaning our results come from all employees

WCM / 2011-11-29 / 13 What do we mean with WCM? WCM embraces elements from other methodologies

WCM / 2011-11-29 / 14 TPM: Total Productive Maintenance How do we apply our WCM metodology Infinite loop

Loss Intelligence Loss Eradication Loss Prevention

SEEK

ERADICATE

MAINTAIN

WCM / 2011-11-29 / 15 In WCM we combine two approaches

Kaizen: Continuous Improvements - Suggestions Competitive - Improvement teams Must - Bottom-up approach advantage

PDCA cycles

Innovation - Big jumps Maintain & Improve NEW STANDARD - Big investments

Waste/Loss - Top-down approach PERFORMACE TIME

WCM / 2011-11-29 / 16 L How is our Continuous Improvement Approach Standardization is key

Performance “The electric light did not come from the continuous 3 Innovation improvement of candles” (Oren Harari) Improvements generate new n standards standard

Second Improvement Losses Teams standard 2

First standard Method Losses (Variation due to Standards (eliminate variation): 1 - Instructions lack of standards) - Specifications - Checklists Time

WCM / 2011-11-29 / 17 Our journey from WCM to WCM From Manufacturing to full Business

Technology Development

Plan Customers Suppliers Source Make Deliver and

Consumers Innovation Chain Innovation

Product Development Experience in driving Supply Chain WCM in production, now going into new areas WCM Level 1 WCM Level 2 WCM Level 3 Factory Operational Excellence Integrated Supply Chain Extended Supply Chain

Production excellence by Defending & strengthening Zero loss company via learningWorld and mastering Class WCM competitive position innovativeWorld WCM Class activities Manufacturingtools & techniques through flexible & efficient supply chain Management WCM / 2011-11-29 / 18 WCM history...

WCM First ever ”Global WCM in Capital Leaders” award Starts in Equipment Tetra Pak from JIPM 1999 2007 2016

2001-2003 2014 2018 Expansion to all WCM in Expansion Packaging material Processing to cover factories Solutions full Supply chain

WCM / 2011-11-29 / 19 WCM / 2011-11-29 / 20 Customer oriented focus, while adapting to the new normal

- Lead time reduction initiative

- Remote Factory Acceptance Test (FAT)

WCM / 2011-11-29 / 21 Our business model Capital Equipment Sales

Service Sales

Packaging Material Sales

CT/2020-12-02 / 22 The Problem...

Lead time +20% Volume +25% Customization +20%

*Illustrative figures CT/2020-12-02 / 23 The process

Packing Order Commissio Engineering Procurem. Production Test and Clarification ning shipping

► Engineered to order ► 80% are customized solutions ► Mix of outsourced and internally produced parts

CT/2020-12-02 / 24 Identify the critical path...

Organization A

Organization B

Critical Path Organization C

Activity 1 Activity 6 Slack Activity 2 Activity 3 Activity 4 Activity 5

5 days 5 days 15 days 10 days 10 days 35 days 45 days

► Drive improvements on the critical path ► Understand Slack

CT/2020-12-02 / 25 Understand the Process – Value Stream Mapping

Production Control

Vessels BU LF Line Mgmt

Control Panel

Market Company Pumps Market Company / Customer warehouse / etc.

others

Assembly LIM

Clarification Process Design Automation Design Electrical Design Purchase Order Procurement DHM Goods Receipt TEST Packing Including tanks & Tetra Pak Warehouse C/T= 19 days vessels VA = x days FTE= x LEVELLING C/T= 7 days C/T= 18 days C/T= 12 days C/T= 6 days C/T= 4 days C/T= 20 days Assembly DHM C/T= 34 days C/T= 4 days VA = x days VA = x days VA = x days VA = x days VA = x days VA = x days VA = x days FTE= 1 PM FTE= x FTE= x FTE= x FTE= x Procurement Main FTE= x FTE= x Module Control Panels Documentation Mechanical Design included here C/T= 18 days C/T= 23 days VA = x days FTE= x Procurement Aut. Assembly Main Homogeniser C/T= 11 days C/T= 21 days Module Dampers VA = x days VA = x days FTE= x FTE= x

C/T= 20 days C/T= 12 days VA = x days Procurement LIM FTE= x Assembly Aut. Homogeniser Dampers Best scenario delivery time (incl. levelling) C/T= 27 days is around 19-20 weeks. Exlcuding waiting C/T= 12 days VA = x days time handing over to other resources. Critical path FTE= x

9 days Julia Loschkin/2020_04_14 / 26 7 days 15 days* 1 day * 5,5 days * 4 days * 17 days* 3 days 25 days* 9 days * 4 days* 100 days 4M – Fishbone analysis

Method Man

Delivery Time Targets Expand standard portfolio Problem Statement Procurement Test Area Capacity Long Lead time material Improve capacity in our bottleneck Material Machine

CT/2020-12-02 / 27 Test Area Capacity

► Our bottleneck process, with long que of orders.

► First available slot determine our delivery date...

CT/2020-12-02 / 28 Test area capacity…

Assembly SMED – Attacking activities on the Hours critical path. What can be performed • Loss deployment before entering the test area? • Loss eradication • Loss prevention

Losses

Machine Footprint – 23% of total Test capacity is lost because of machines requiering double testbays.

Dissassembly Machine dissasembly – Move Total time Assembly Test Dissassembly Waiting times entire activity to 2:nd shift.

CT/2020-12-02 / 29 *Illustrative figures Procurement Seek – Understanding of losses, Long leadtime material current process and requirements Number of Materials

196 139 57

L/T > 15 days Stock Critical

Eradicate Prio 1: Improve lead time Prio 2: Put in stock

Maintain Establish forum between specification owners, Supplier Managment and Production to align

leadtime requirements. CT/2020-12-02 / 30 Delivery Time Targets -Expand std portfolio

DTG 1 DTG 2 DTG 3 <16 weeks 14%* 16 - 18 weeks 3%* On request 83%*

Standard Customized

Median = 28 weeks

*Illustrative figures > 21 weeks <35 weeks

CT/2020-12-02 / 31 Delivery Time Targets -Expand the standard portfolio

What are the most common reasons why we can’t offer a standard leadtime?

1. Non standard layout 2. Pressure vessel other than PED 3. Multimode machine

CT/2020-12-02 / 32 Factory Acceptance Test (FAT) with customer

Tetra Pak or Modena Travel Customers

WCM / 2011-11-29 / 33 FAT with remote setup

PC PE Lund & Modena Technical solution/setup Customer

Machines HMI video stream MS Teams

Test engineers video stream MS Teams Internet iPhone 11 equipped with a gimbal

Optional video stream

Iphone MS Teams Displayed at customer site or Computer by using PC, Mac and with MS Teams desktop app

WCM / 2011-11-29 / 34 FAT with remote setup

Live demo

WCM / 2011-11-29 / 35 FAT with remote setup

Global Standard Satisfied customer Continuous improvements

Standard service offering

WCM / 2011-11-29 / 36 Who is better?

Both!

• Hare: • Muscle, big change! • Tortoise: • Consistency, compliance!

I M

WCM / 2011-11-29 / 37 WCM / 2011-11-29 / 38