Written by Nathanial Marshall, Practitioner at LI Europe


Last week, when doing my weekly shop, I found my favourite packet of chocolate biscuits on special offer. Naturally, I bought two packets to enjoy over the coming days. Once I arrived home and unpacked all of my shopping, all I wanted to do was sit down in front of the telly with a cup of coffee and a packet of my favourite biscuits.  When I opened the packet, I found not 10 pieces as expected, but 11 instead. I was incredibly excited that I was getting an extra snack for free. However, being a manufacturing professional, my mind quickly turned to the extra cost this would be creating for the manufacturers.

I might just be the one lucky consumer to get his extra biscuit, but it is likely there were hundreds if not thousands of others with an extra portion.  The manufacturers are essentially giving away an extra 10% of product. For every 10 packets produced, there would be an equivalent full packet given away to consumers for free.  This would add a significant cost to the business. Imagine if someone took away 10% of your expected monthly income, how would you feel?

To manufacturers, this is a type of waste called “Giveaway”. Often manufacturers focus on the waste that is “thrown in the bin”, or “Throwaway”. It is visible on the factory floor, in bins around the areas and its impact is seen by all, as well as being felt on the bottom line. Giveaway can be a hidden waste. Average weight checks will no doubt be in place to ensure the product meets the legal requirements for minimum weight pack declaration. Unfortunately, this is often done without a process to control or even reduce the level of giveaway.

Even for those who do measure it, there is usually an opportunity to improve. One of the other reasons it is a “hidden” waste, is because an “expected” giveaway may be built into their standards. For example, 5% is built into the budget. If the actual giveaway then comes in at 5%, it would show no loss. This can hide the magnitude of the opportunity.  Improvements to giveaway, unlike efficiency improvements, will always deliver a benefit to the bottom line instantly.

Different methodologies can be employed to reduce giveaway, depending on the product, process and technology.  Over the years I have spent time in various factories improving their level of giveaway. From 20% to below 10% on Sushi pieces, from 7% to 3% on biscuits and 2% to 0.5% on sausages, all of which has saved businesses hundreds of thousands of pounds.

If you fancy sharing your experiences and challenges of improving giveaway, as well as any other improvement initiative, why not come along to our Ambassadors Academy.

The Ambassadors Academy is a monthly event for ambitious manufacturing professionals concerned with driving productivity, in all its form.  If this article interests you and you’d like to find out more about the Academy follow this link to the Ambassadors webpage

Written by Jason Gledhill, Head of Reliable Maintenance at LI Europe

Plan-Effective-Meetings

[Source: quotesgram.com]

Those people fortunate enough to be a child in the 80’s will undoubtedly recognise the opening narration of the hugely popular A Team…

“In 1972, a crack commando unit was sent to prison by a military court for a crime they didn’t commit. These men promptly escaped from a maximum security stockade to the Los Angeles underground. Today, still wanted by the government, they survive as soldiers of fortune. If you have a problem, if no one else can help, and if you can find them….maybe you can hire The A-Team.” [Source: IMDB Quotes]

 

Every week the A team were portrayed as acting on the side of the good, helping an oppressed community against a band of thugs and bullies. The programme inevitably ended with an outlandish finale with over-the-top violence (in which people were seldom seriously hurt), spectacular explosions, and jeeps being overturned.

John “Hannibal” Smith would create a complicated plan and rely on BA “I pity the fool!” Baracus, Templeton “Face” Peck and the crazy pilot “Howling Mad” Murdock to deliver its success. The ability of the team to form weaponry and vehicles out of old parts formed a focus for the last 20 minutes of the program.

 

How do you think Hannibal relayed his plan to the rest of the A Team?

  1. Did he keep it in his head and not tell anyone about it?
  2. Did he write it down and give it to everyone as a memo? (No e-mails back in the 80’s)
  3. Did he just tell one of the team and expect them to relay the plan between each other?
  4. Did he have a meeting with the rest of the A Team and the people who hired them?

Undoubtedly he chose option 4; and judging by the results, where the underdogs – the A Team – overcame overwhelming odds and beat the bad guys every week, without injury to themselves or the people who hired them, Hannibal’s meeting must have been highly effective.

 

Just take a second and ask yourself “How effective are my meetings?”

  • Do you always get the results you desired?
  • Does everyone involved in the meeting see them as value adding?
  • Do people turn up prepared?
  • Do all the actions get recorded and delivered?

 

If you’ve answered no to any of the above, your meetings aren’t as effective as they could be. 
So here are a few simple tips for effective meetings:

  • Have your meeting standing up
  • Lock the door after the start of your meeting
  • Keep score of the issues raised, actions assigned, actions completed on time and reviewed
  • Track how many actions have a who, when and what

And remember:

  • To value the input of each delegate
  • Make sure only one person speaks at a time
  • Never belittle anyone else’s ideas
  • 70% agreement = 100% commitment for decisions

 

If you would like to utter Hannibal’s immortal words “I love it when a plan comes together” then get in touch for your FREE ‘Effective Meetings Tip Card’ – call 0333 456 1988 or drop us a line to place your order contact@li-europe.com. 

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Written by Adrian Oliver, Engagement Leader, LI Europe

I was on my way back from a visit to the Weetabix factory in Burton Latimer, just outside Northampton. The visit was arranged as part of Works Management’s Manufacturing Management Conference. The 2 day event provided a fantastic opportunity to catch-up with some of the latest thinking on lean manufacturing, to hear how companies such as Toyota, Newsprinters’ Eurocentral, and GKN have used lean to drive business performance – and also the opportunity to meet a group of people interested in making lean work for their business.

As Gareth Bale stabbed home a close range goal (from 40 yards!) I reflected on the previous 2 days. A number of the presentations focussed on why some lean transformations succeed whilst others fail. Common themes for success are strong leadership and “systems thinking”. Leaders need to identify what they are trying to achieve (the simple release of cash, the drive to meet increase in demand, etc) and effectively communicate this to their teams. They need to focus their time in the areas where lean is being practised (Phil Warner from GKN talked about creating Leader Standard Work for Senior Management) and recognise people as they achieve wins. For all levels of employee this then needs to be embraced within a robust system which encourages standardisation of task and constancy of purpose. I am pleased to say that this reflects the experience of LI Europe over the last 15 years and is why we focus our Sustainable Improvement Model around 3 pillars: Ability (Know How); Inclination (Leadership); and Time (People Engagement).

The visit around the Weetabix factory was quite exciting for me. In 2011 LI Europe had supported the Bars business unit complete a number of lean workshops that resulted in a reduction in wastage of 80% and an improvement in output of over 50%. A culmination of this work resulted in the Site being crowned as Winners of the Food Manufacturing Excellence Awards (read the Case Study here). I am pleased to report that the Site continues to be successful on its lean journey and is well on the way to achieving World Class line efficiency levels. The Site leadership has clearly understood a number of the messages highlighted in the conference, including the need to engage their teams and the use of excellent visual factory standards to help ensure employees focus on the important things at all times. This was a real pleasure to experience and I would highly recommend you take an opportunity to have a look if you get the chance.

[… Wait a minute, the Referee’s Assistant is holding up the board indicating numbers 11 and 15 are coming on for England, who is that? Ah, Vardy and Sturridge, I wonder if they can make an impact?]

If you find yourself reflecting on why your business improvement programme isn’t achieving the impact you hoped for, or if you’re just frustrated at high levels of waste or concerned about escalating operating costs then why not get in touch?

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This blog is the fifth in a series written by Jeremy Praud, Head of UK & Europe. (To start at the beginning, click here.)

Lean-and-Green-webinar-Video15 years ago, LI developed an approach to making Lean work in FMCG.  It was entirely results focussed – the founders had and unstinting belief that if you followed the process, you would achieve rapid and sustained improvement. 

Those of you who have come across driver tree based problem solving will know what a wonderfully logical and concise approach it is.  That’s why 15 years ago, we applied our own problem solving method to the factors that drive sustainable improvement in a factory.   The result was the SIM – the Sustainable Improvement Model.

We’ve been putting this to use in the intervening period, and as with all good driver trees, as we get new knowledge and understanding, we can refine it time and again, to evolving it to ensure nothing is missed, and the relative importance of each of the elements is understood.  After a few years, and having tested it across many different sectors, we realised that as much as the structure was common across all sectors, each sector needed its own refinement.

In particular, we noticed that the asset value against operating cost has a significant impact on the rapidity and value that certain improvement techniques bring – thus to truly ensure we could get as close to the maximum rate of improvement possible, we needed a bespoke approach for FMCG v high asset intensity sectors.

A decade down the line, with instances where clients have used the SIM to drive their improvement and in so doing have won multiple awards, the precise understanding of ‘what to do, when’ to ensure rapid and sustained manufacturing profit improvement is better understood than ever.

Since every factory is starting from a different place, the one size fits all approach just isn’t going to deliver the maximum rate of improvement for a given site.   The SIM rates each element across a 5 point scale:

  1. Not Engaged
  2. Experimenting
  3. Effective
  4. Good Practice
  5. Best Practice.

An early learning was that it is vastly more important to identify the elements that have no or little focus, and are rated as Not Engaged or Experimenting, and turn them Effective.  Where there is a lot to do, there is clear path that can be mapped out as what to prioritise in year 1, and what can wait until year 2 or 3.  The rate of improvement of a site that has merely achieved “Effective” at every level of the SIM is impressive – and this doesn’t take anything more than doing the basics well.

The M&S Plan A audit framework has become the first retailer supplier audit to review against a Lean Framework.  The first version of this framework, developed in association with the people who coined the term Lean from an academic analysis (the reasons behind Toyota’s success) is true to Classic Lean, and has yet to be tailored for FMCG.

The purpose of a Lean Audit is simple – to drive improved value, and ultimately reduced manufacturing cost.  The Manufacturers who remember this when following a retailer Lean Framework will do best and maximise the value from lean auditing.

For more discussion on making Lean work in FMCG – register for  Food Manufacture’s Lean Audit webinar (11am, Tuesday 26th April).

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Lean-for-FMCGs-AuditThis blog is part of an editorial series written by Jeremy Praud, Head of UK & Europe.

This is now my fourth blog in the ‘Lean Audits for FMCGs’ series.  If you’d like to start at the beginning, click here.

Otherwise, lets look at two key tools that are missing from the ‘Classic Lean’ Toolkit that would deliver significant value to FMCGs, an area of focus that doesn’t belong, and one of the greatest benefits of the M&S Lean Audit Framework.

 

Debottlenecking is missing – yet has fastest impact on your bottom line
The major tool missing from Classic Lean that is of tremendous value within FMCG is debottlenecking theory – sometimes called the Theory of Constraints (TOC).  Pioneered by Eli Goldratt in the book “The Goal”, debottlenecking methodologies can be used to optimise line performance, and give a clear set of tactics to deliver improvement.

The average FMCG manufacturing line has approximately 9 processes.  This is many fewer than a car line – and this difference is the key reason why constraint theory doesn’t appear in the classic Lean Toolkit.  However, as a tool used to optimise speed, line control, and accumulation, it has one of the fastest impacts to the bottom line you can hope to achieve.

 

Improvement Systems is missing –  yet critical to sustain improvement
Good leadership and management processes are of course common across industries.  The M&S audit does a good job on most of these.  If there’s one thing the audit is light on though, it’s ensuring the right reporting is delivered easily from the right kind of measurement systems.  KPI’s are taken for granted within the audit – but all too often FMCG factories struggle with the accuracy of information.  Ensuring your measurement system is telling you to work on the right things, not the wrong things, is of critical importance and should be high on your priority list.

 

Supplier Relationships – not relevant for most FMCGs
Lean Audits often prioritise focus on Supplier Relationships.  For FMCG manufacturers, this requires leverage of the buyer on the supplier – and whilst this holds true in some supplier relationships, there are many where it does not.

The large enterprises have identified this, and in many instances are already trying to mimic the tactics used on them for so many years by the retailers. Whether the relationships being mimicked could be called compatible with “Lean” however is a different question.

The purpose of the Lean Audit framework should be to help you achieve a better cost to manufacture. If you are not a large enterprise, move Supplier Relations lower on list of priorities than other activity.

 

Improvement Champions – the real win for FMCGs
Finally, one of the greatest benefits the M&S Lean Framework will bring is the focus on having an improvement champion/manager.  The legacy of a half a century of quality audits is that the requirement for a quality department is no longer questioned. The real win will be if Lean Audits help businesses to understand that whilst continuous improvement, like quality, is everyone’s responsibility –  Improvement Champions are the key to  ensuring the processes are working, running CI workshops, and offering training and support With Improvement Champions in place, we can look forward to a continual improvement in manufacturing efficiencies, reduction in waste, and ever improving manufacturing cost per unit.

 

Next time I’ll be looking at how to make Lean work in FMCG. And to hear more on this subject from us, retailer M&S, and supplier Greencore – register for this Food Manufacture webinar.

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This blog is the second in a series written by Jeremy Praud, Head of UK & Europe

TPM-SixSigma-LeanIn my last blog I mentioned that Marks & Spencer’s, who pioneered the Quality Audits, have introduced a Lean Audit into their Plan A.

So lets look at whether ‘Lean’ will deliver in the food industry what is clearly hoped of it by the retailers. The objective of course is to lower manufacturing costs – so of the three main approaches to continuous improvement, is Lean the right one, and is it what is needed in FMCG?

Lets consider the other two approaches – TPM and Six Sigma
If we look at the relatively low asset cost required in FMCG manufacture, the spend required to achieve exceptionally reliable equipment – the fundamental reason for a TPM approach – rarely gives a value return. This means that reliability of 96% is generally quite acceptable, except for a few notable exceptions, and the requirement to spend big on predictive maintenance just isn’t there as it is in other industries.

Meanwhile, Six Sigma is fundamentally about eliminating variation – 6 standard deviations from the mean and all that (actually 4.5, but that’s another story). For FMCG, with low unit cost (and permissible variation of around 1 sigma due to the average weight legislation) again the high-end techniques of Six Sigma have limited value return.

 

This means that a Lean Approach is in the driving seat
However, Lean did not originate in FMCG – it comes from automotive, with an entirely different asset base and set of base assumptions. This means that whilst many areas of Lean can deliver real value for FMCG, we must be careful in its application. What is taken for granted in automotive is not always true in FMCG – thus the success of the Lean Audits in reducing cost within FMCG will ultimately come down to how well adapted they are for the FMCG sector.

Taking one example (and there are many more); Constraint Theory as outlined in Eli Goldratt’s “The Goal” is of huge applicable benefit within FMCG, but classic Lean either ignores it completely, or allows the contraction of ‘Unnecessary WIP’ to merely ‘WIP’ to drive exactly the wrong actions.

Having experienced the misfortune of this type of misapplication, one FMCG factory owner was heard to remark “I’d rather have taken a million pounds in cash out the bank and used it to fuel a bonfire in the car park – it would have been less painful than what happened”!

So – the future is sure to be Lean Audits – but the companies that succeed from using them will be the ones that are wise to prioritizing what delivers rapid bottom line benefit – and uses an approach to continuous improvement tailored specifically for FMCG.

Tune in next week for the next blog in this series, or hear more on this topic by registering for Food Manufacture’s Lean Audit webinar (11am, 26th April).

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