Lean and Mean Food Industry
ABC is a leading name in the food industry in Middle East. The company is synonymous with high quality products across categories such as vegetable oils and comfort foods. ABC embarked on an ambitious project to tackle process inefficiencies through Lean techniques.
The project covered diagnosing entire business covering demand planning, supply chain and manufacturing areas. The focus was on identifying non-value adding activities that affected plant efficiency, their root causes and appropriate countermeasures.
The project unearthed several areas of profit leaks and implementation of suitable countermeasures. The benefits included a 20% direct labour reduction, significant material saving, equipment utilisation increase and resultant throughput increase all adding up to substantial financial gains.
Situation – deep dive
ABC is a leading name in the food industry in GCC region with a vast array of in-house brands as well as subcontracting arrangements with several well-known brands. The factory boasts of state-of-the-art technology and process automation. However, despite the high level of sophistication, they faced several non-value adding activities in their operations that led to excess manpower deployment in all sections.
Overall productivity per person was below benchmark levels leaving a significant opportunity for efficiency gains. The leadership team recognised the need to critically evaluate every operation with a lean lens to identify non-value-adding activities that may be simplified or completely eliminated thus freeing up excess resources.
Actions Taken – deep dive
A core team of change agents was constituted. The team was trained on Lean fundamentals and exposed to practical application of the tools. A value stream mapping exercise revealed several opportunities for improvement across the value chain. Baseline data on several key metrics were collected to quantify the pain areas. Several pain points impacting productivity, quality and resource utilisation were highlighted. These covered issues such as non-value adding manual activities, delay contributors, and quality concerns. “kaizen” charters were put in place to tackle each issue and identify/implement appropriate countermeasures. Suitable capex solutions wherever required were identified and incorporated part of solution implementation plan. The solutions implemented covered areas such as:
- Manpower productivity
- Material wastage
- Setup time reduction
- Downtime reduction
Results – deep dive
In all, about 20% improvement in direct labour productivity, 30% reduction in downtime & set-up time and throughput increase per shift were recorded. Several solutions had the potential for horizontal deployment to other sections of the factory thus potentially multiplying the gains.
All these improvements translated to roughly 4 times return on investment and a recurring benefit to the organization.