analysis of food and drinks manufacturing companies

FBMCBusiness review Programs

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

FBMCWhat we do

What FBMC doWorking 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 modelFinancial measures

Financial status

Process capabilityManagement

controls Effectiveness & efficiency

Desktop, diagnostic and

workshop based

Detail field work and

observation based

…creates a balanced approach to analysing the business capability

“top

dow

n”“b

otto

m u

p”

Top downanalysis

Gap analysis

Variable cost60%

Overheads25%

EBIT15%

Annual costs

Your Business model based on commercial costing and budgets

Variable cost70%

Overheads27%

EBIT3%

Actual cost based on current performance

Gap Analysis

Annual costsLabour cost

25%

Material cost45%

Standard labour cost

20%

Labour variance5%

BOM cost40%

Material variance

5%

Machine efficiencyPinch points in product flowLine speedNon production time (change overs, breaks)Standard v actual manning ( labour control)Labour profile matching sales profile (planning)

Waste in the processRejects (right first time)Yield in the processGive 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

XX

X

X

XX

XX

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 marginFocus on efficiency improvementsTarget price increases

Promotional activityDrive sales

Low marginLow sales

Low marginHigh sales

High marginHigh sales

High marginLow sales

Bottom up analysis

Operational studies can take many forms

peopleand

activities efficiency quality

forecasting&

planning process

improvements

R&D&

Engineering Operations Maintenance Customers Logistics

Finance IT HR Management Systems Admin

Suppliers Sales

&Marketing

Culture Strategy

Cambridge Management Consulting

BMcL/analysi s for sales.ppt page66

Monthly forecast accuracySou rce: Period Accounts

10%7%

16%13% 12%

5% 4%

8%

25%

-40%+ -30% -20% -10% 0 10% 20% 30% 40%+

How effective is your planning process?

process improvements

people&

activities efficiency

forecasting&

planning quality

Operations…….


BMcL/analysis for sales.ppt page91

W eekly plan attainment

22% 22%

44%

7.5%

35%

-40%+ -30% -20% -10% 0 10% 20% 30% 40%+

How do people spend their time vs how they think they spend their time?


people&


forecasting&

planning quality


Actual

40.2%

17.5%

29.2%

12.7%0.4%

Day in the Life of study …Blue shift team leader (lines 3&4)

Source: Day in the Life of StudyDate: 7th October 1994, Nights

Active InvolvementPassive InvolvementAvailable Time

Manual WorkAdministrationTraining


Perceived

25%

25%

20%

10%

10%

10%

Source: Team Leader’s Estimate - 7th October 1994





Ideal

25%

25%

15%

10%

15%

10%



Source: Team Leader’s Estimate - 7th October 1994


actual

perceivedideal

Operations…….

Are you getting the most out of your equipment?


people&


forecasting&

planning quality


OEE Observation - Line 41

Overall EquipmentEffectiveness Availability Performance Quality= x x

n Breakdown Loss

n Set up andadjustment loss

n Minor Stoppage/Idling loss

n Reduced speedloss.

n Quality defect andrework loss.

n Start up loss.

46%

54%

70%

30%

74%

26%

89%

11%

= x x

Overall OEE Availability Performance Quality

Part Nr: AXX 001023/13Date: 16/11/94Duration 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

# o

f pie

ces

Eng. Spec = 76.8

Average = 37.6

BDP = 70

Operations…….

Cambr idge Management Consulting

BMcL/analysi s for sales.ppt page85

Process C apability - Fill Volumes - Line 4

Actua l Pr ocess

Target : 2004m l

M ean: 2018m l1 S tdv: 12.15ml

Sp ec ification

Target : 2000 ml1 S tdv: 8 .6 ml

T1: 1970 ml(<2.5%)

T2: 1940 ml

Overfillin g by 18 ml per Bottl e on average

0

2

4

6

8

10

12

14

1970 1975 1979 1984 1988 1993 1997 2002 2006 2011 2015 2020 2024 2029 2033 2038 2042 2047 2051 2056

Is our process in control?


people&


forecasting&

planning quality



Process Defects

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

DateCode

Line: 4Product:2l CokeNo. Produced 4337Total Defects: 163Defects withMaterial loss: 29 (0.67%)

Operations…….

C ambr idge Management C on sulting

BMcL/analysi s fo r sales .ppt page130

FMEA: Destacker Date: 7-May

Line: 10

Function Fn. Failure Failure Mode Failure Cause Failure Effect FrequencyPreventative 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 NothingTrain 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

Is the correct maintenance being carried out?



Preventative vs reactive asset careLINE 4

68%

32%

R&D&



Suppliers Sales

&Marketing

Culture Strategy

Is accountability clear and well communicated?

C a m b r i d g e M a n a g e m e n t C o n s u l t i n g

B u s i n e s s K P I t r e e .p p t p a g e 1 0

M a n u f a c t u r i n g ’ s a c c o u n t a b i l i t i e s

d i r e c t l y a c c o u n t a b l e

s h a r e r e s p o n s i b i l i t y

n o t a c c o u n t a b l e

cust o me rsa tis f ac t io n

pr oduc tde velo pm ent

sa le s K PI s

m ark et ing K PIs

ot her K PIs.. ...

d em andge ne ra t ion

pr oduc tion c om plia nceto S& O P

sa le s com p lia nceto S& O P

st ock co mp lia nceto S& O P

LP m o de lacc ur acy

sup ply / de ma ndop t im isat io n

prod uc tde liv er y( O TIF )

ot he r lo g is ticsK PIs .. .. .

sup ply& d is tr ib ut io n

p rod uc tionca pa bility

po te ntia lut ilisa tionof ass ets

as setinte gr ity

as setenvir onme nta lpe rfo r ma nce

m anufa c turingser vice s

(se rvic e le ve ls)

produc tion

pro du ctm ad e & s old

revenue(sa les)

unit usa ge s

o the r p ur cha singK PIs .. ...

ra w mat er ia l& ut ilit iesunit co sts

var iab leproduc tion

cos ts

d is t r ib ut io ncos ts

P FR c os ts

variab lec osts

f ixedexp enses

ma np ow e rco s ts

f ixedut ilit iesco s ts

f ixe d prod uc tionco sts

ma nuf act uringse rviceco sts

re se arch &te chnolog y

co sts

co mm e rcia lfunc tio n

co sts

f ixed sto rag e& d is tr ib ut io n

co sts

other b usine ssove rhe ads

fix edcosts

co sts

p rofit

sto cklevel s

w or kingc api ta l

other p ro jec tsK PI s . . .. .

proje c tove rsp end

capitalin ve stm ent

ot her K PIs.. . ..

a ssetd isp o sa l

n et as se ts

return onnet a ssets

p eop lesafety

peoplehea lth

p eop led eve lopm ent

peo ple K P Is

T h e m a n u f a c t u r i n g f u n c t i o n h a s a n u m b e r o f a c c o u n t a b i l i t i e s i n a d d i t i o n t o p r o d u c t i o n p e r f o r m a n c e s u c h a s c o m p l i a n c e t o S & O Pa n d c u s t o m e r s a t i s f a c t i o n

R&D&



Suppliers Sales

&Marketing

Culture Strategy

R&D&



Suppliers Sales

&Marketing

Culture Strategy

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

Presentations & Public Speaking