Objectives. Benefits. Categories of performance problems. Training Rework Raw Material Waste Quality Waiting - Changeovers/Downtime

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1 Improving Bakery Manufacturing Performance How to Identify the Correct Tools and Develop an Implementation Plan Continuous Improvement is not about the things you do well that s work. Continuous improvement is about removing the things that get in the way of your work. The headaches, the things that slow you down, that s what continuous improvement is all about. - Bruce Hamilton (President; Vice Chair of The Shingo Institute Board of Governors & Member of The Shingo Academy & Shingo Examiner) American Society of Baking Chicago Marriott March 3, 2014 Why performance improvement is necessary Increased competition Consumer demands Higher costs of raw materials and packaging Increased labor costs Objectives Categories of performance problems in your bakery Present available tools for improving manufacturing performance Selecting the proper tool or combination of tools to solve specific problems Developing a targeted implementation plan for the use of these tools Benefits Enhance associate engagement Reduction of manufacturing costs Sustainable quality improvements Competitive advantage in the market place Categories of performance problems Training Rework Raw Material Waste Quality Waiting - Changeovers/Downtime 1

2 The only thing worse than training your employees and having them leave is not training them and having them stay. - Henry Ford Training Aim to develop the knowledge, skills and attitude necessary for effective performance of the work Reasons for Training Product and quality service New technology Role and career flexibility Cost control Associate retention Areas of training Knowledge Technical skills Techniques Rework Mixing/Makeup Dough re-added to the mixing or make-up process Wrapping Having to re-code product Re-tie product Re-bag product Warehouse/Shipping Staging the wrong product in the wrong area Raw Material Waste Over scaled ingredients Product giveaway Overuse of dusting flour Over/under proofed dough Over/under baked product Damaged products in wrapping Waiting Changeovers/Downtime Characteristic: Unbalanced workloads Process flow stops due to unplanned interruptions Queues or idle time Causes: Inconsistent work methods System Interruptions Lack of process standardization Capacity doesn t match volume Complexity Training systems Waiting Changeovers/Downtime Changeovers Scheduling production accordingly Pan changes Allergen vs. Non Allergen 5S Shop layout Tool accessibility Downtime Preventive maintenance leading to Predictive maintenance to avoid equipment wear and tear Robust training systems 2

3 Quality Tools for improving manufacturing performance 5S Kaizen Value Stream Map Poka-Yoke Six Sigma 5S 5S Process Sort Set in Order Unnecessary Shine Standardize Sustain MAY 1996 JUNE 1996 JULY S Checklist 5S is a program to reduce operational steps and improve the overall cleanliness of a work area making it safer and more productive 5 S Floors clean Tools stored Gages clean Std WIP Safety Guards 5S Example Benefits of 5S From this To This Reducing changeover, & cleaning time Reduce errors in set up & inventory Reduce waste in: The amount of space needed for storage Work In Process (WIP) and Warehouse inventory Searching waste (when items are hard to find) Motion waste (poorly located equipment & supplies) 3

4 Kaizen Kai Change/Improvement Zen Good/Continuous Kaizen Usually team-based, where the scope and boundaries of a problem are clearly defined Implementing do-now solutions through waste elimination Stimulate change Facilitates employee engagement and training/development Promotes problem solving skills Systematic approach to Lean production Value Stream Map Hand drawn map of the process Example of Value Stream Map Used to explain the process and the materials used at each point of the process Assists in identifying line efficiency opportunities (bottlenecks) Benefits of Value Stream Maps Understand details of work flow in all functional areas to satisfy customer needs Quantify lead time, travel distance and resources consumed Vehicle for waste elimination Poka-Yoke Designing work processes to eliminate error 1. Control Approach Shuts down the process when an error occurs Keeps the suspect part in place when an operation is incomplete 2. Warning Approach Signals the operator to stop the process and correct the problem 4

5 Poka-Yoke Examples Benefits of Poka-Yoke Control approach Eliminates the error Warning Approach Eliminates the potential for error Six Sigma Methodology to measure and improve company s performance, practices and systems Benefits of Six Sigma Assists in measuring, detecting, and maintaining quality standards Data collection and decision making Leads to standardized processes Associate engagement and accountability Selecting the proper tools to solve specific problems Example of Training and Rework Utilizing Kaizen, 5S Example of Raw Material Waste and Quality Utilizing Six Sigma Example of Changeovers and Downtime Utilizing Value Stream Map, Poke Yoke, 5S Lack of Training Assume there is a newly hired associate with NO knowledge of a baking process. The associate is not provided with an in-depth training program and receives 1 week of training shadowing with another associate. After 1 week of shadowing, the associate is placed on 3 rd shift wrapping, running 2 baggers for an 8 hour shift. 5

6 Rework is created During the 8 hour shift, the other associates notice that 4,000 units of product has been placed in the wrong bag due to picking the wrong box When the associate was trained, he/she grabbed the box from the area shown by the other associate The veteran associate understands how to verify the type of boxes, the new associate does not have the experience All units must be re-opened with the assistance of the other 2 wrapping associates and placed in the proper bag causing 4 hours of overtime Estimated cost of rework =$300 Estimated cost of wasted packaging = $200 Total Cost of Rework = $200 + $300 = $500 Utilization of Tools Kaizen Event takes place in the wrapping department Why? Data is collected and shows Lost Time The objective: Identify reasons for lost time Team is assembled including: 2 wrapping associates 1 production supervisor 1 maintenance associate Layout of Wrapping Area is created to understand where Lost Time is occurring Utilization of Tools The team observes the wrapping process for a 2 week period on multiple shifts, they conclude that rework is the main cause of Lost Time An average of 1000 loaves have to be reworked per 3 shifts because of product being placed in the wrong bag An average of 1 hour is needed to complete the rework after the associates shift has ended The kaizen team decides to create an SOP and conduct 5S to provide clarity of varieties vs. bag types and train all wrapping associates Utilization of Tools 5S Needed?!? Vs. The newly trained associate and veteran associates had to find the proper bag type for the appropriate product in this warehouse during a changeover Are we setting the associates up for Failure? 5S is implemented, bags are condensed to 1 rack Organized by variety, usage, and date received Appropriate signage is posted for each box and variety Training and Rework Analysis Raw Material Waste & Quality Assume that over a year the associates have been conducting rework on a daily basis on all 3 shifts 3 hours per day 15 hours per week Rework = $60,000 Estimated cost of wasted packaging = $30,000 Total Cost of Rework = $60,000 + $30,000 = $90,000 per year 5S / Kaizen Implementation Rework is monitored after the 5S and Kaizen Study Rework has been reduced to 0.50 hours per day Rework = $10,000 Estimated cost of wasted packaging = $6,000 Total Cost of Rework = $10,000 + $6,000 = $16,000 per year Following the previous example in the wrapping department, associates are having difficultly bagging product Similar varieties are coming to wrapping in all different shapes and sizes Steps need to be taken to reduce or eliminate the variation of product coming to the wrap 6

7 Cost of Waste from Variation Assume that non-conforming product is 1 in every 100 units Cost of labor and materials Assume 2000 units a day is wasted Labor and materials = $500 per day Cost of waste per year = $125,000 Cost to remake product 2000 units of product to remake = $75 per day Cost per year = $18,000 per year Total cost per year = $18,000 + $125,000 = $143,000 Implementing Six Sigma Six sigma can be implemented to reduce variability within the process Current State: Key characteristics within the process are not being monitored and recorded Associates define quality standards with their own judgments Efforts to reduce waste is based on perception not data Implementing Six Sigma Desired State: Data is recorded and monitored constantly Product complies with consumer and company standards Decisions are made based on data not perception to improve quality and reduce waste Associates understand data and are data driven to make decisions Vs. Implementing Six Sigma Six Sigma is now implemented to reduce the number of defects in your bakery, associates are actively engaged and monitor process control The number of non-conforming units is decreased from 1/100 to 1/1000 Cost of labor and materials Assume 200 units wasted Labor and materials = $50 per day Waste per year = $12,000 of waste per year Cost to remake product 200 Units of product to remake = $7 per day Cost per year = $1,500 per year Total cost per year = $14,000 Cost has just decreased from $143,000 to $14,000 per year Waiting - Changeovers Assume the process within your bakery consists of an average of 10 changeovers that are at least 30 minutes long per production day at the divider area. Value Stream Mapping, 5S, and Poka-Yoke are conducted to reduce changeovers and downtime. Cost of Waiting Changeovers/ Downtime Assume that you have an average of 30 minute changeovers due to different pan types, allergen to non allergen, and scheduling Assume that there are 10 changeovers per day Changeover could cost up to = $400,000 per year in labor and materials 7

8 Implementing Value Stream Maps It is noticed that during a changeover that an associate must travel to 5 key areas in order to change pans and guides Needed tools are not at the proper locations for cleaning purposes Pallet Worker Mobile Equipment Implementing Poka-Yoke/5S Poka-Yoke This takes the associate an average of 5 minutes to adjust pans and guides Solution: All guides are now preset to set collars 5 minutes has been reduced in the changeover 5S All tools needed for a changeover are placed on shadow boards within 5 ft of the associates work area The 5S shadow boards reduce the changeovers by 10 minutes Cost comparison Before An average of 10 changeovers per production day An average changeover at the divider is 30 minutes 6 different guides must be set-up taking on average 5 minutes Tools for divider clean-up are scattered throughout the bake shop, costing time for the associate to search Changeover costs = $400,000 per year After An average of 10 changeovers per production day Guides are now set automatically when selecting a variety at the divider Tools are placed next to the divider on a 5S shadow board The changeover time changes to an average of 15 minutes Changeover costs = $200,000 per year Developing a targeted implementation plan Understanding if you have in-house resources available to carry out implementation plan or if consultants are needed Understanding of the company culture, associates, and work environment to roll out implementation plan Implementation Plan In House Resources Do your associates have the knowledge needed to implement improvement tools? Do your in-house resources have time needed to properly conduct these tools? Benefit of utilizing associates with the knowledge of improvement tools: Understand the processes and culture within your bakery Consultants Outsources needed? Consultants provide training and implementation Focus all their attention on the efforts to help you improve Company provides objectives, consultants provide the knowledge to develop plans for execution Consultants are scalable Can contract for variable time periods Implementation Roll Out Sponsorship of senior leadership and plant leadership Alignment with organizational goals Providing resources necessary to implement tools Selection of key associates for implementation team Associate empowerment to provide and carry out plan Monitor team direction, ensure data driven decisions Commitment from all associates to engage on tools On-going communication of project status and results 8

9 Conclusion Importance of improvement in today s competitive environment Benefits of improving quality, profitability, and associate engagement Wide availability of tools, choosing the correct tools for your bakery culture Opportunities are inherent in any manufacturing facility Utilizing the tools available and engaging associates in the proper use of these tools will result in productivity and performance improvements, both in process and associates Questions? 9

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