Analysis of food and drinks manufacturing companies

About FBMC
FBMC has worked in industry for 25 years implementing major change programs and delivering substantial cost benefits and
performance improvements.
Experienced in engineering, operational and general management at senior level FBMC understands the practical issues associated
with the day to day running of organisations.
For the last fifteen years FBMC has worked with major blue chip companies helping to deliver substantial benefits in supply chain
management and asset utilisation as well as helping companies to understand their performance issues and
opportunities through the analysis approach.
FBMC has a network of colleagues who are leading experts in a variety of tools and techniques which can be called upon during the
change management programs.
This unique approach allows significant cost benefits while still offering the same services and support offered by major consulting
companies
Some of the companies worked with over the last fifteen years

What FBMC do
Working with clients to deliver growth,
operational performance & financial improvements
• Low cost implementation consultancy
• delivering major change
• working with all levels of the business
• ensuring ownership & sustainability
• building the capability to change
“We don’t need anymore
bright ideas,
there are lots of them
around.
In business, success is
5% strategy,
95% execution”
Percy Barnevik, ABB

The two basic approaches….
Strategic context
Process context
Business model
Financial measures
Financial status
Process capability
Management controls
Effectiveness & efficiency
Desktop,
diagnostic and
workshop based
Detail field work
and observation
based
…creates a balanced approach to
analysing the business capability
“topdown”“bottomup”

Gap analysis
Variable cost
60%
Overheads
25%
EBIT
15%
Annual costs
Your Business model
based on commercial
costing and budgets
Variable cost
70%
Overheads
27%
EBIT
3%
Actual cost based
on current
performance
Gap Analysis
Annual costs
Labour cost
25%
Material cost
45%
Standard
labour cost
20%
Labour variance
5%
BOM cost
40%
Material
variance
5%
Machine efficiency
Pinch points in product flow
Line speed
Non production time (change overs, breaks)
Standard v actual manning ( labour control)
Labour profile matching sales profile (planning)
Waste in the process
Rejects (right first time)
Yield in the process
Give away (average weight control)
What's driving the
difference ?

We analyse your real cost by SKU to work out your
true margins
Sales £
% Margin
Net Contribution
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Product analysis

Then we work with you to develop your SKU
Strategy
Sales £
% Margin
De- list
Re engineer to improve margin
Focus on efficiency improvements
Target price increases
Promotional activity
Drive sales
Low margin
Low sales
Low margin
High sales
High margin
High sales
High margin
Low sales

Operational studies can take many forms
people
and
activities
efficiency quality
forecasting
&
planning
process
improvements
R&D
&
Engineering
Operations Maintenance CustomersLogistics
Finance IT HR
Management
Systems
Admin
Suppliers
Sales
&
Marketing
CultureStrategy

Cambridge Management Consulting
BMcL/analysis for sales.ppt page66
Monthly forecast accuracy
Source: Period Accounts
10%
7%
16%
13%
12%
5%
4%
8%
25%
-40% + -30% -20% -10% 0 10% 20% 30% 40% +
 12 Product Groups Over Periods 1-9
How effective is your planning process?
process
improvements
people
&
activities
efficiency
forecasting
&
planning
quality
Operations…….
Weekly plan attainment
22% 22%
44%
7.5%
35%
-40% + -30% -20% -10% 0 10% 20% 30% 40% +
Source: C Fawcett
 PERIOD 9 VARIANCES

How do people spend their time vs how
they think they spend their time?
process
improvements
people
&
activities
efficiency
forecasting
&
planning
quality
BMcL/analysis for sales.pptpage82
Actual
40.2%
17.5%
29.2%
12.7%0.4%
Day in the Lifeof study …
Blue shift team leader (lines 3&4)
Source:Day in the Life of Study
Date: 7th October 1994, Nights
Active Involvement
Passive Involvement
Available Time
Manual Work
Administration
Training
Perceived
25%
25%
20%
10%
10%
10%
Source: Team Leader’s Estimate - 7th October 1994
Active Involvement
Passive Involvement
Available Time
Manual Work
Administration
Training
Ideal
25%
25%
15%
10%
15%
10%
Active Involvement
Passive Involvement
Available Time
Manual Work
Administration
Training
Source: Team Leader’s Estimate
- 7th October 1994
actual
perceived
ideal
Operations…….

Are you getting the most out of your
equipment?
process
improvements
people
&
activities
efficiency
forecasting
&
planning
quality
OEE Observation - Line 41
Overall Equipment
Effectiveness
Availability Performance Quality= x x
 Breakdown Loss
 Set up and
adjustment loss
 Minor Stoppage/
Idling loss
 Reduced speed
loss.
 Quality defect and
rework loss.
 Start up loss.
46%
54%
70%
30%
74%
26%
89%
11%
= x x
Overall OEE Availability Performance Quality
Part Nr: AXX 001023/13
Date: 16/11/94
Duration 12:20 - 18:40
= x x
Line 15 - throughput variability
0
10
20
30
40
50
60
70
11:45-12:00
12:00-12:15
12:15-12:30
12:30-12:45
12:45-1:00
1:00-1:15
1:15-1:30
1:30-1:45
1:45-2:00
2:00-2:15
2:15-2:30
2:30-2:45
2:45-3:00
3:00-3:15
3:15-3:30
3:30-3:45
3:45-4:00
4:00-4:15
4:15-4:30
4:30-4:45
4:45-5:00
5:00-5:15
5:15-5:30
5:30-5:45
5:45-6:00
#ofpieces
Eng. Spec = 76.8
Average = 37.6
BDP = 70
Operations…….

ProcessCapability - Fill Volumes- Line 4
Actual Process
Target: 2004ml
Mean: 2018ml
1 Stdv: 12.15ml
Specification
Target: 2000 ml
1 Stdv: 8.6 ml
T1: 1970 ml
(<2.5%)
T2: 1940 ml
Overfilling by 18 ml per Bottle on average
0
2
4
6
8
1 0
1 2
1 4
1 9 7 0 1 9 7 5 1 9 7 9 1 9 8 4 1 9 8 8 1 9 9 3 1 9 9 7 2 0 0 2 2 0 0 6 2 0 1 1 2 0 1 5 2 0 2 0 2 0 2 4 2 0 2 9 2 0 3 3 2 0 3 8 2 0 4 2 2 0 4 7 2 0 5 1 2 0 5 6
Target
Source: Measurements on 11.10.94
Process not
under Control
Is our process in control?
process
improvements
people
&
activities
efficiency
forecasting
&
planning
quality
ProcessDefects
Check
12
4 Low fills
95 Missing Label
21 Hi Caps
Filler
Rinser
Capper
Kister Labeller
Check
11 Bottles falling down
21 m/c stops
9 m/c stops
12 m/c stops
3 Label damaged
10 fallen
Date
Code
Line: 4
Product:2l Coke
No. Produced 4337
Total Defects: 163
Defects with
Material loss: 29 (0.67%)
Operations…….

FMEA: Destacker Date: 7-May
Line: 10
Function Fn. Failure Failure Mode Failure Cause Failure Effect Frequency
Preventative
combat Task Potential Task Responsibility Frequency Time
Lift blank to
magnetic strip
prior to entering
washer and press
10-1
Not lifting
blank
Vacuum not
sucking up blank
Loos hose
connection
Line downtime
4-5 times per
week
Nothing
Inspect or observe
cups lifting blanks
Production Every other hour minutes
Lift but not
loading
correctly into
washer
Blanks loaded onto
pallets incorrectly
Procedure not
followed
Line downtime
2 times per
week
Nothing
Train operators on
proper pallet
loading procedure
Production Every pallet minutes
Lift more
than one
blank into
washer
-Double Blank
failure -
Fanning Magnet
Sensititivity of
switch
Line downtime once per month Nothing
Check sensitivity
of double blank
sensor and fanning
magnet
Maintenance Once per month 1/2 hour
FMEA study
Is the correct maintenance being carried out?
Preventative vsreactive asset care
LINE 4
68%
32%
Reactive
Preventive
Source: Job Cards and Check Sheets
R&D
&
Engineering
Finance IT HR
Management
Systems
Admin
Suppliers
Sales
&
Marketing
CultureStrategy

Is accountability clear and well communicated?
Business KPI tree.ppt page10
Manufacturing’saccountabilities
directly accountable
share responsibility
not accountable
customer
satisfaction
product
development
sales KPIs
marketing KPIs
other KPIs
.....
demand
generation
productioncompliance
to S&OP
sales compliance
to S&OP
stock compliance
to S&OP
LP model
accuracy
supply/demand
optimisation
product
delivery
(OTIF)
other logistics
KPIs .....
supply
& distribution
production
capability
potential
utilisation
of assets
asset
integrity
asset
environmental
performance
manufacturing
services
(service levels)
production
product
made & sold
revenue
(sales)
unit usages
other purchasing
KPIs .....
raw material
& utilities
unit costs
variable
production
costs
distribution
costs
PFR costs
variable
costs
fixed
expenses
manpower
costs
fixed
utilities
costs
fixed production
costs
manufacturing
service
costs
research&
technology
costs
commercial
function
costs
fixed storage
& distribution
costs
other business
overheads
fixed
costs
costs
profit
stock
levels
working
capital
other projects
KPIs .....
project
overspend
capital
investment
other KPIs
.....
asset
disposal
net assets
returnon
net assets
people
safety
people
health
people
development
people KPIs
The manufacturingfunction hasanumber of accountabilitiesin addition to production performance such ascompliance to S&OP
and customer satisfaction
R&D
&
Engineering
Finance IT HR
Management
Systems
Admin
Suppliers
Sales
&
Marketing
CultureStrategy
R&D
&
Engineering
Finance IT HR
Management
Systems
Admin
Suppliers
Sales
&
Marketing
CultureStrategy

Delivering the
benefits
The implementation phase

Where do we look for the
opportunity
 Quality improvement
 Reduction in scrap and rework
 Right first time leading to reduction in labour (quality
inspection)
Improved delivery and customer satisfaction
 Improved NPD process
 Shorter lead times
 Simplify product ranges
 Develop innovation
 De-average product lines ( SKUs )
 Grow high margin products
 Improve low margins
 Simplify product range for overall cost improvement

Where do we look for the
opportunity
 Improve asset utilisation
 Increase volume throughput
 Improve yield
Cashing the check may come from the following areas
 Increased sales
 Plant closures
 Shifts/ hours reduction
 Lower raw material costs with improved yield
 Cost savings
 Energy
 Indirect and direct labour
 Material losses
 Supply chain management
 Reduction in stock
 Reduce raw material costs

Some of the tools required for the Journey towards
Operational Excellence
Stages
1 2 3 4 5
Short term focus
Product focus
Process stability
Continuous
improvement
• Basic
management
control system
• Mass balance
• Basic
management
control system
• 5S
• Maintenance
• standards
• process mapping
• SOP’s
• Short Interval
Control
• functional flow
• SPC,
FMEA,SMED
• Preventive
Maintenance
• Supplier
Management
• customer
Satisfaction
• µ Planning
• Basic Problem
Solving
techniques
• DoE
• Value
Engineering
• Supplier
Partnership
• pull system
• Benchmarking
• Voice of the
Customer
• Self-learning
organisation
• single-piece flow
• service
management
• customer
enthusiasm
• RbM
Operational
Excellence

Project plan linked to cash savings

Analysis of food and drinks manufacturing companies

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