Condensed soup is a mature market, and profitability for soup manufacturers necessarily must come from increased efficiency, not higher sales volume. At Campbell’s flagship production facility in Napoleon, Ohio, the HPO program that began two years ago is targeting $10 million in annual savings, according to Mark Cacciatore, vice president-manufacturing.
HPO emphasizes self-managed work teams, employee empowerment and total quality management. “We’re playing catch-up to some degree,” Cacciatore allows, “but we’re getting good cooperation from the (employee) union” in implementing it.
In November, the Ohio plant instituted a 30-minute overlap period for its 1,150 workers, replacing the en mass shift-change approach that had prevailed for decades. Instead of heading to their stations, workers in groups of 20 or fewer meet to review performance metrics and swap improvement ideas. “For us, it’s moving to a team-based, flow-to-the-work organization” that engages the staff and “leverages their knowledge,” Cacciatore says.
Supply chain optimization became a top priority at Campbell in 2004, when the first of more than half a dozen Procter & Gamble alumni joined the organization in leadership positions. A more recent supply-chain focus occurred at Dr Pepper Snapple Group (DPSG), the Plano, Texas-based firm that was spun off from Cadbury Schweppes in 2008.
Three years later, DPSG initiated Rapid Continuous Improvement (RCI) with the ambitious goal of achieving productivity improvements totaling $150 million by 2013. According to a recent investment report by UBS Securities, RCI had reduced needs for working capital needs and capital spending by approximately $170 million at year-end 2013.
William McDade, DPSG’s senior vice president-RCI and capital planning, describes RCI as a kaizen-based approach in which front-line workers receive training in the identification and elimination of waste and then are given responsibility for executing the necessary changes. More than 3,000 workers underwent week-long kaizen indoctrinations in the first two years. The changes are more sustainable, he believes, precisely because neither management nor consultants drive the effort.
Three principles guide RCI: change must be rapid, it must produce breakthrough changes of at least 30 percent better performance, and it must be executed by frontline personnel.
Reductions in safety stock throughout the supply chain have delivered the greatest financial impact to date. Every step in the chain, from raw material sourcing to the point of sale, was broken down and optimized.
Within the production zone, changeover was a major focus. Prior to RCI, changeovers typically took 47 minutes. After production workers applied their kaizen training, the time shrank to 20 minutes and, at one plant, 6. “That’s been one of the biggest wins for us,” says McDade.
He recalls the project executed by “L.C.,” a gentleman who had worked on the line since 1971. Once trained in kaizen methodology, he enthusiastically mapped out his movements and identified where efficiencies were possible. “He knew exactly what he had to do to change over faster,’ says McDade.
RCI also draws on lean techniques and Six Sigma for deep dives, he adds, “but the tools are the easy part. The culture change is what is hard for a lot of companies.
“We’re still in the early stages, we have lots of runway, but we have the right game plan,” he believes.
Productive, healthy workers
Before focusing on ergonomics and workplace safety, Jeffrey Smagacz consulted companies on the identification of financial risks and the adequacy of their insurance coverage, hence the name of the firm in which he is the managing partner: Risk Management Group, Franklin, Tenn.
Industry professionals often think of safety and production to be an either-or proposition. Smagacz firmly believes manufacturers can have both.
In 2009, he collaborated with Tim Morris, former manager-HSE programs at PepsiCo’s Quaker division, on a series of 3 1/2-day “ergo kaizen” events at nine production facilities. A day of data collection preceded each event, and cross-functional teams totaling 12-18 employees were trained and turned loose to identify and implement up to four dozen improvement projects that could be ergonomic or housekeeping-related. Most of the teams exceeded their goals, and the average cost to implement the improvements ranged from $13-$92.
Making tasks less physically stressful paid dividends beyond reductions in worker injuries. A pouch changeover that required stressful hand and wrist movements was simplified with the purchase of a right-angle cordless drill, reducing the time needed to remove poucher forms by 30 minutes. Adding a side guide to a vibrating shoot reduced product spillage to the tune of $6,000 a year of lost product across four lines, with the added benefit of less clean-up time.
Perhaps the program’s greatest endorsement is that it is still in place and has spread to other PepsiCo divisions, although the length of each event has shrunk as the lower hanging fruit has been removed.
“A lot of times, the solutions to problems are engineering based,” Smagacz reflects. As an engineer, he believes engineered solutions to ergonomic issues are more long-term. Most board-certified ergonomists (he is one) have health care backgrounds, and their solutions tend toward “bend at the knees” instead of “get a lift.”
Smagacz’s approach fits well with the engineering culture in PepsiCo’s bottling operations but not so with the Frito-Lay division, where a more “therapeutic view” of safety prevails.
Regardless of corporate culture, continuity is important, but programs can be difficult to sustain when results start to level off. Some clients get great results, suspend the ergonomic focus, see an uptick in injuries, then repeat the cycle. Others are satisfied “if they can check the box for corporate compliance,” he says.
A trailer manufacturer deferred on conducting an ergo kaizen because the firm’s injury rate was 5 per 100 f-t-e, below the 7 per 100 norm for the industrial category. At Procter & Gamble, the rate is 0.2 per 100, but the ergo focus is ongoing.
Knowing what a project is trying to achieve precedes selection of the improvement tool. Even before that, there must be recognition of the need for change. Bimbo’s Contreras suggested a defect rate of 99.9997 percent per units of output would rate as Six Sigma and contrasted that with 30 percent error rates on the target height for bread on some lines. “Where are bakeries (in Sigma level)? 2? 3?” he rhetorically asked.
Acquiring the skills to improve processes is important, concludes Carlino, but gaining employee engagement and getting buy-in to change is more difficult. He has spent the past 18 months in the UK, delivering “deep dive workshops” for Network Rail on lean.
“It will take years more to change the culture,” he says. The process is continuous because there always is room for improvement.