In partnership with: Embracing Lean - finding a new approach for food factories In partnership with: Embracing Lean - finding a new approach for food factories by Chris Anstey 1.0 Introduction created a new threshold for quality that no producer can hope to offset “ All we are doing is looking “ Measuring work is not enough. merely through low prices based on at the time line, from the You have to measure value.” cheaper ingredients, packaging or moment the customer gives Bill Waddell wages. This paper will tell you about us an order to the point how those ideas are being taken In the aftermath of World War II, when we collect the cash. from car production and are starting manufacturing processes around the And we are reducing the to be used for food production. world went through a revolution. time line by reducing the non-value adding wastes.” The growing demand from Lean provides competitive consumers for better, cheaper advantage. In the food industry, it’s Taiichi Ohno products put pressure on ranges, a closely guarded secret. Engineer and Assembly prices and delivery times. Starting in Manager, Toyota, 1943-75 the motor industry, the concept of The old thinking: “If it’s not broken, Lean Manufacturing was created by why fix it?” Japanese carmaker Toyota. Inspired The new thinking: “Drive for by visits to car factories in Detroit efficiency. Create more customer and influenced by new thinking value with less waste.” from American retailers about stock control, Taiichi Ohno and Eiji Perhaps you work in a food factory, Toyoda developed “the Toyota Way”. whether in a quality or operational By the early 1960s, they had worked role. Your industry is under pressure out the principles of what became from food legislation, retailers known as Lean Production. and consumers. Perhaps you look around your factory and instead Their managers had to understand of thinking about the way things the ‘what and why’ so they are, you are thinking about the way could take back control of their things could be. organisations. It took time for other car manufacturers to follow You will read in this paper about but now they all operate in this how methods, focus and values way. Without ‘Lean’ they couldn’t can change. If you do what you compete. It has taken more time always did you get what you always for other industries to follow but got. Lean is providing the world of now Lean principles are becoming food manufacturing with a new the norm for manufacturing framework for change. everywhere. Lean production has Embracing Lean Contents 1.0 Introduction 2 2.0 Market drivers 4 2.1 Standards and food safety 4 2.2 A tighter focus on production efficiency 4 2.3 People 5 2.4 Complimentary approaches for driving 7 operational efficiency 3.0 Problems 9 3.1 Engaging with leaders 9 3.2 Failure 9 3.3 Product changeovers 10 4.0 What change looks like 11 4.1 Moving towards Lean 11 4.2 The elements of Lean production 12 5.0 Solutions and opportunities 14 5.1 The search for understanding 14 5.2 Retailers and brand manufacturers 15 6.0 Recommendations 17 3 Embracing Lean Section 2 Market drivers 2.1 Standards and food safety 2.2 A tighter focus on production efficiency Where does safe food start? Is it with standards? Not really, though they Food factories need to find both are clearly important, because food flexibility and efficiency. When safety starts with people. The key is producing mature products in through employee training and the low growth market segments, the development of a food safety culture. emphasis on these characteristics Continuous improvement starts become more important. Driven with leadership and finishes with by globalisation, in many food a positive culture where failure is industry sectors competitive price understood and its causes are shared points have been found by creating so that everybody works together. low-cost products based on re- engineered product specifications However, any revaluation of factory with cheaper ingredients, packaging efficiency must respect the relevant or labour. food safety standards, such as FSSC22000, IFS and BRC, which set Outside of the food industry a requirements that represent new revolution of operational efficiency challenges for Production Managers. has happened based on the There’s also a second layer of principles of ‘Lean’ production. It requirements laid on top of these has reduced failure, with its usually certification standards by many unknown costs, by creating a new retailers and brand manufacturers threshold for product quality. No because they consider them to low-cost producer can hope to offset represent the minimum. such a competitive disadvantage merely through efficiencies from low Meanwhile, the market demands wages. They need to find out how to innovation. Driven by demanding improve efficiency. consumers, the complexity of ranges increases, meaning short There is a squeeze on price while production runs and more batches. the costs of raw materials and labour increase. There’s also the ongoing rationalisation of suppliers by buying companies. Inefficient factories are under scrutiny. Footnotes: 1. Food Safety System Certification 22000, International Featured Standards – Food and British Retail Consortium – Global Food Standard. 4 Embracing Lean Section 2 Market drivers 2.3 People Key deliverable “ Workers know what is needed Continuous Working with operational teams they must show to improve their jobs, and Improvement measurable improvement in productivity. companies that do not tap Leader Faster changeovers, reducing motion and stock. into this significant source of Less waiting and a decrease in over production. knowledge will truly be at a competitive disadvantage.” Dr Joseph M. Juran (1991) Production Delivering the required manufacture of finished Manager products while meeting and exceeding production The relationships between performance, people, quality and yield targets. operational and technical teams in food factories are characterised by tensions that tend to be destructive Hygiene Organising and completing all site rather than creative. The operational Manager cleaning requirements. team is driven to reduce waste Ensuring cleaning processes, procedures and good and achieve delivery targets. The manufacturing practices achieve best practice. technical team is driven by their quality management systems and Quality Ensuring that food safety is delivered, quality systems a focus on critical control points. Manager are maintained, legislative requirements are achieved Overriding this is the need and customer expectations are met. for leadership to create a positive culture for continuous improvement. That means these leaders need to understand how to change the way people behave. 5 Embracing Lean Section 2 Market drivers Working together, they need If you are answering yes to all of to find compromises that will these questions then you may be improve efficiency while delivering familiar with these two roles: safety and achieving compliance standards. There are new questions • Lean Facilitator. Partly about for these leaders. conducting site diagnostics to develop practical implementation − Does your maintenance team plans, mostly about working with function more like system the people through interviews, maintainers than fire fighters? mapping exercises and helping teams to analyse various − Is there a disciplined and shared performance data to establish the approach to problem-solving? potential for optimisation. − Do you create the appropriate • Lean Manager, not only using expectations for your staff that Lean tools and philosophies for problems will be resolved? value chain analysis but also training and coaching employees − Do you expect your subordinate across the whole site, aiming to managers to answer these embed continuous improvement questions as you do? throughout all functions. − Do you really understand There is a change going on. 10 years what happens? ago, what jobs in factories were specialised in delivering efficiency? Is this influx of new skills and specialities the sign of a revolution within food manufacturing to follow the transformation of the motor industry? 6 Embracing Lean Section 2 Market drivers 2.4 Complimentary approaches − Total Quality Management (TQM) for driving operational is often used interchangeably with efficiency TPM but it focuses on the product rather than the equipment. TPM “ I have been impressed with the helps deliver TQM which is about urgency of doing. Knowing is not motivation through a shared enough; we must apply. Being vision, joint ownership of every willing is not enough; we must do.” problem affecting the customer Leonardo da Vinci and making sure that decisions are based on data. Standard business practice is that you can’t increase the selling price − Lean Production, based on unless you can clearly demonstrate Toyota’s highly successful to the customer that there is some production system, Lean looks new added value or an unavoidable to maximise customer value and increase in underlying costs. Usually shorten the Cash Conversion that means if you want to increase Cycle by identifying and your margins to be more profitable, eliminating non-value adding you must take it out of your activities (waste). Six Sigma, operating costs. based on Motorola’s approach to quality improvement, provides The various continuous a structured problem-solving improvement models designed methodology that helps the team to improve operational efficiency logically define the problem and share many features. find a solution. − Total Productive Maintenance − Kaizen is an idea developed (TPM) is about improving the in Japan. It supports Lean integrity of production and quality production by introducing the systems through machines, idea of continuous improvement equipment, processes and as the responsibility of everyone. employees that add business value. Improving efficiency becomes a Its key focus is to keep all equipment continuous process, not a one-off in top working condition to avoid activity. Kaizen implies that even the breakdowns and delays in the smallest improvement should be manufacturing process. made because when combined and multiplied they lead to big savings.