A strategic side of Lean

by FoodBusinessNews.net Staff
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Many of the previous Lean Tips encouraged the use of the basic lean tools. Lean tools are straight-forward to implement and can quickly effect the efficiency of production. Using the tools is a tactic that works well for the short run. Tactics, however, are more purposeful when aligned with strategy. Meat processors should address strategy as a key element toward sustaining and improving gains won from applying 5S, visual factory and buffer stock as effective tactical tools.

As an example, assume workers in a meat processing plant are arranging tools and equipment to maximize production. Engineers, managers and line leaders are listening and following up on Kaizen meetings. Continuous improvement is working its’ way throughout the plant. Now what?

Taking a broader view

Management should start with a broader view and take some time to review the operation from a strategic perspective. Systems should be looked at from start to finish. Several Lean principles to address strategically in any food processing plant, particularly one that is already demonstrating continuous improvement during production, are flow and pull.

Flow is simply the concept that work is most efficient and effective when there are no stops and starts. Batch and queue mass production techniques are the opposite of flow. The stops and starts are everywhere in most food-processing facilities. A strategy supporting the Lean principle of flow will eventually require consideration of the entire enterprise: administration, sales, procurement, production and distribution. Keeping work in flow from orders received, to scheduling, production, packaging, shipping and distribution should be the broader view.

Pull is an enterprise that responds directly to customer orders. In food processing, the ideal would be that no part of the enterprise upstream should produce anything until the customer downstream places the order. Elimination of forecasts, cumbersome schedules and extensive inventory are the goals of pull. The logical, but rather absurd extension of this principle would have the meat and poultry industry raise a calf, piglet or chick "just-in-time" as ordered. Clearly, that is not how it is done. However, the pull principle should trigger thinking about establishing standard practices that encourage pulling orders through the facility instead of pushing based on faulty or constantly changing schedules. Moreover, developing relationships and contracts that support the principle of pull will provide significant improvements over the long haul. Relationships with suppliers, brokers and others can be negotiated toward the pull principle.

Flow and pull are Lean principles. They should be part of all strategic discussions. Processors should use the principles as a filter for current practices and consider how and where you could apply these principles. Certainly application is more difficult than theory. There are benefits however, from looking at inefficiencies, bottlenecks and other problems through a strategic and broader lens. When a food processor views the enterprise as a system, strategic improvements start to take shape.

Addressing improvement

Here is a description of some issues I have seen in my clients enterprises that indicate that improvement in flow and pull can and should be addressed. Hardly a production day goes buy without a push schedule. All my clients have push schedules. Their push schedules are what was not completed yesterday or was ordered after standard hours. Around 3 p.m., many food processors forecast their schedule for the next day. Custom, habit and practice have this cut and pasted into a schedule for the next day’s production. Push items or items not finished today or projected to be short are put into the schedule.

During the second shift, some product runs get done and some do not. Production leaders should get the schedule shortly after it is generated. This often does not happen. The production manager may be busy with a maintenance issue, out of the plant or start created by either an inaccurate schedule or poorly-communicated schedule run havoc on flow and utterly ignore pull.

All of the plants where I have witnessed these phenomena have policies or standard operating procedures something else. Start-up management starts at 5 a.m. and leaves before the schedule is finished. This often contributes to a schedule not communicated. It may be in the computer or an in bin but it is not effectively communicated. In any event, the stop and (SOPs) that formally state the schedule is closed out and communicated at a certain time. The problem still exists. Strategic plans should include overhauling the scheduling and ordering systems. Strategic planning that includes the various departments involved in procurement, sales; scheduling and production can be very helpful to minimize scheduling discrepancies. At the very least, production should be aware of schedule changes prior to start up.

Another recurring problem in the supply and production systems is emergent orders. This is particularly difficult when the meat or poultry product is fresh versus frozen. Emergent orders are the orders that come in during the production run and pushed into the schedule. I am not saying that this should not happen. It does. On the other hand, if flow and pull are important and viable Lean principles, then emergent orders need more consideration than I have seen given. On one hand emergent orders are as close to a pull order as you can get. The customer calls on Tuesday and wants his hamburger or chicken tomorrow. You want the business and take the order.

The problem is that you were not prepared for it. Meat is already butchered and in process based on a schedule. Now the schedule has changed. The change may cause shifts of personnel, equipment changeovers or other responses that cause disruptions to flow. This may be a fact of life. The goal, however, is to minimize the effects of emergent orders on other orders. The stories told regarding poor flow and pull always detail the negative ripple effect of moving some clients order to the front of the line. There is no simple answer for this systemic problem.

Effective strategic initiative

One company designed an effective strategic initiative to prepare for the inevitable emergent orders. This particular company restructured and enforced a dead line or cut off for next day orders. The cut off was 3:00 p.m. Customers were reminded and most importantly the rule was enforced. This helped change the customer’s last minute ordering. A larger problem was restraining the sales force. They had been accustomed to sending in their orders late because it was convenient for them. Worst, during certain parts of the fiscal year, sales commissions favored the salesmen getting the order in before a certain date, but not necessarily early enough to be placed into the schedule.

The deadline and some changes to sales commissions helped the front end of this issue. On the production side, a team was formed to handle emergent orders. These folks were given special training to change out equipment quickly and to grind or butcher raw materials as a team. This strategic initiative took the stops and starts of emergent orders and placed them firmly into one value stream. At this writing, the initiative is not perfect but schedule changes are handled much more systematically and the flow is steady.

Start thinking about hand-offs between sections or departments in your enterprise. Flow and pull are Lean principles that can help dissect problems that occur between departments. The gist of the matter is that improvement is a continuous process. Moreover, substantial improvements often come from parts of the system working together towards a strategic goal.

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