Project Profile: High Volume Food Manufacturing Throughput by Rick Maher

Executive Summary – Lean Implementation Saves Food Manufacturing Plant $800k/yr

As a management consultant, I worked with a client food manufacturing plant to kick-start a stalling lean implementation. By focusing the effort on throughput at the constraint, lean methodologies such as 5S, Visual Management System, and Total Productive Maintenance (TPM), plant throughput skyrocketed nearly 60%. This improvement was achieved with zero capital expenditure and allowed for competitive advantage as low cost producer in growing demand.

As a management consultant I completed a wide range business improvement projects with world class companies in tons of industries. I have profiled a few of my projects here on RickMaher.info, but out of respect for my clients confidentiality, I have excluded their names and have changed some material facts and figures.

Situation

My client, the high volume manufacturing plant of a line of household name brand food products, was facing growing demand, but serious margin pressure from their largest retailer. Current plant performance was failing to match the demand, but a capacity expansion project would have been prohibitively expensive.

The facility operated 24 hours a day and 5-7 days each week. The facility was staffed to run 3 shifts per day and 5 days per week, thus incurring higher overtime wage costs for 6th and 7th running days each week. Further, the facility was set up on a continuous process manufacturing facility – meaning that the entire plant could only produce one product type (flavor) at a time. Thus to accommodate demand for multiple flavors the factory had to shut down and change-over the equipment, ingredients, and packaging.

Task

In a management consulting role, I was brought in to identify and implement business improvements that would increase capacity to match demand, and simultaneously cut costs by at least $500k/yr to protect profit margin.

Action

First I developed a working relationship with plant management as well as line staff. By building these relationships I gained a deeper understanding of what had been tried in the past, what the perceived current opportunities were, and what solutions seemed the most logical. I relied on these relationships as the project progressed to quickly develop buy-in and momentum on my recommendations.

Next I analyzed past performance and the current state process. I dispelled the perception that the packaging department was the constraint by showing that when all packaging equipment was running smoothly, its capacity was far greater than the extruders – the actual constraint. This was critical in changing the culture from focused on packaging line output to focusing on extruder throughput.

After the constraint was confirmed to be the extruders, I tracked any and all downtime there. I tracked it from two perspectives:

Qualitatively – what was the root cause of the downtime?
Quantitatively – what was the net throughput impact of the downtime?

Using this data I created a root cause pareto that illustrated the most impactful reasons for lost throughput. It turned out that line change-overs were the largest cause occurring on average four times per week and causing almost two hours of down time each occurrence. Indeed almost an entire shift of production each week was lost to line changeovers. Other big hitters of lost time included mechanical failures upstream starving the constraint or ingredients or downstream choking the constraint to reduced or stopped throughput.

Once the pareto was sufficiently consistent and accurate, I developed solutions to attack each unique root cause.

To reduce changeover downtime I looked to reduce the frequency of changeovers as well as the duration of each changeover. To reduce the frequency of changeovers I worked with the master scheduler to understand the demand and storage situation. Together we optimized the schedule to extend product type run lengths by as much as possible without ever sacrificing a customer shipment deadline or filling the warehouse to its capacity. Next I tackled changeover duration by performing a 5S Kaizen event on the changeover areas and implementing Single Minute Exchange of Dies (SMED) principles.

In effort to cut down mechanical failures along the line leading to downtime at the constraint, I implemented numerous changes with the plant mechanics. First, we identified the machinery that was failing most often and stationed mechanics nearby to reduce the amount of time between its failure and a mechanic on site beginning the repair process. Next I created a schedule for machinery check-ups and preventative maintenance. Finally with plant management I developed a long term machinery replacement plan allowing for proper budgeting and equipment lifecycle management.

Another throughput loss root cause was an uncountable number of points along the manufacturing line where perfectly good product would fall off the fast moving conveyor belts and onto the ground – of course rendering it unusable. While this root cause accounted for very little total production loss, it was very visible and generally a pain for the line staff to clean up and dispose of. I found this to be a perfect opportunity to generate serious buy-in from the line staff. I created a rotating “swat team” of line staff tasked with identifying one common “spill point” per day and a practical solution. These fixes ranged from having a mechanic spend 15 minutes fastening a shield rail to a conveyor to placing a sanitary bucket under the spill point and creating a communication process to ensure that it was replaced before overflowing.

Results

Ultimately the project was successful. Average hourly production increased from 60,000 lbs per hour at the beginning of the project to 95,000 lbs per hour by the end of the project 5 months later. This production increase accomodated the increased demand, and allowed for the elimination of overtime shifts – saving $800k/yr in labor costs. Specific operational improvements included:

Reduced average change-overs per week from 4.0 to 2.5
Cut average change-over constraint downtime from 115 minutes to 40 minutes
Improved equipment down mechanic response time by 45% leading to constraint choke / starve downtime by 77%
Eliminated 15,000 lbs of average daily food waste disposal – a 33% improvement