TreeHouse Foods: Flexibility With Efficiency

In any given category, TreeHouse's 19 manufacturing plants must make dozens of varieties in dozens of formulations, all at low cost.

By Bob Sperber, Plant Operations Editor

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But setting a high bar and making results visible across the company helps plant managers better understand the efficiency of their assets and inventories, which, in turn, helps them better prioritize improvement projects under their own authority.

To impart operational agility, management divides its myriad products into 16 categories, each operating as a smaller, entrepreneurial company. Each category group is managed by a multidisciplinary team responsible for corporate goals that characterize any business – sales, production, quality, innovation, warehousing, distribution and the rest. This approach brings the scale and expertise of a nearly $2 billion company to smaller, nimble teams focused around category-specific business units.

Performance enhancements
From category goals to individual plants, goals are tracked on the production line using various methods to manage information and improve plant performance.

For example, OEE – overall equipment effectiveness – has been implemented across the operation. Under this methodology, data are aggregated into a tally combining availability (operating time to planned production time), performance (loss or gain in speed) and quality (proportion of on-spec product). Production personnel check their work against these targets daily or multiple times per shift.

It's the kind of thing that engenders a "let's-beat-our-best" spirit of continuous improvement. For example, a team at Bay Valley's North Coast facility in North East, Pa., went so far as likening its efforts to a NASCAR pit crew performing lightning-fast tire changes. Dubbing their effort "Project Taladega," they cut changeover time significantly for a salad dressing line.

Such achievements require an investment in information technology in the business office and the plant floor. Yet, other than a centralized accounting system, there's no single information technology system or template beyond required reports on the fundamentals. Why?

"I've seen too many folks fail by trying to enforce a 'one-size-fits-all' approach," Walsh says. Each category group is given the autonomy it needs to run its business as it sees fit, from top-level enterprise resource planning (ERP) to machine and process control and vendor selection.

"We have process controls in many of our facilities, and we have plans to continue to move ahead with process automation and control where it makes sense," says Jurkovich. "But there's no standard system, and we don't force our plants to use one particular vendor."

There is one exception in many of Bay Valley's plants, which enables the use of tools like OEE. The system resides in the execution or "manufacturing operations" layer between front-office business systems above it and real-time machine and process controls below. Using one such system, CDC Factory software, operators access plant performance data at human-machine interface stations on the floor. Dials, numerical OEE readouts and other simple graphics help them track their performance, which in turn feeds data to business systems.

Bay Valley first implemented the system across six plants in 2008, finding the first plant project achieved full payback as the sixth was going in based on OEE gains that continue to drive efficiencies. Jurkovich has even called the system "the quickest route to capitalizing on our latent human capital potential."

When plant assets are used to their maximum effectiveness, management has the confidence to invest in expansions. They know funds are not being spent on an expansion when efficiency gains otherwise could have handled increased demand. And while there have been some plant consolidations in the Bay Valley Foods plant network, there continue to be expansions as well.

"If we have a fast-growing plant or category that requires a good deal of innovation or expansion and we have the ability through our sales, marketing, distribution and supply chain teams to grow that business, we're clearly not afraid to invest in new capacity," says Jurkovich.

In the case of Bay Valley's North Coast salad dressing plant, acquired in 2007, he says, "We had an excellent [expansion] plan developed by an entrepreneur who remains with us today. And based upon the attractiveness of the category, we decided to add a production line, which also required us to make a building addition.

And we're contemplating another, similar project in another location where we've got a great product, great quality, great innovation and a great sales and marketing team. In cases like these, we want to make the kinds of investments that allow us to continue our growth."

Walsh expects to continue fostering this growth outlook. "When we're in a category that has good growth potential and we feel we can leverage that, we'll certainly continue to invest in it."

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