EHTP | MBA XIII |

Prepared by: Mohammed Marzak

Supervised by: Professor Stuart Chambers

Transforming the manufacturing department of

Centrale Laitière into a business partner by

achieving operational excellence

JUNE 2013

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The project is organized in five parts

Definition, theory and benchmark of Operational

Excellence

Centrale Laitière Diagnosis and the need of

transformation in the manufacturing department

Change management

Results obtained & conclusion

Implementation of operational excellence in the

manufacturing department

Centrale Laitière

Centrale Laitière (CL) is the pioneer of the milk industry in Morocco with a market share of 60%.

The company employs 3000 employees and generates a net revenue of € 550 million. The manufacturing department has 1500 employees and operates four production sites

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After a steady growth in a dynamic market, the performance of Centrale Laitière started to decline in 2010

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Evolution of operating margin of Centrale Laitière

The management conducted analysis that revealed many externals changes and Weaknesses

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Strenghts

• Strong brand with well recognized equity

• Blockbusters and value-added products with high

margin (Activia, Yawmi, Raibi Jamila, Danino…)

• High quality of products

• Capacity of daily distribution in more than 60000

outlets

• High technical expertise

• Social dialogue with the establishment of an inter-

unions charterOpportunities

• Raising awareness and demand of healthy products

as yogurt

• Access to rural regions

• More synergy with Danone

• Leverage operation Excellence

Weaknesses

• High cost of manufacturing and distribution

• Many products with low margin (Milk, Lben, Moufid…)

• Supply and demand imbalances,

• High level of fixed costs and overheads

• Slow rate of innovation versus competitors

• High bureaucracy, slow to move

Threats

• Rising milk and raw material prices

• Intensive competition

• Hard economic conditions caused by the global

economic crises

• High level of temporary workers (interim) creating a

social issue

New Centrale Laitière Strategy : TRANSFORM 2015

To regain its leadership in the Morocco dairy market and to improve its performance, the management of Centrale Laitière decided to launch a new strategy called Transform 2015

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1 Conviction 1 Mission

Yoghurt is essential

3 Strategic Choices 5 Priorties

ONE TEAM

Bottom Line - Operational Excellene

TOP LINE growth1

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3

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Technical

department focusing

only on fire fighting

Business partner

leveraging operational

excellence and creating

value

Professional project : Transforming the manufacturing department In coherence with the global strategy, we decided to launch a

transformation in the manufacturing department

Current situation Target situation

POWERFUL TEAMSPOWERFUL TEAMSEmpowerd and motivated teams

SQCDMESUPERIOR RESULTSSUPERIOR RESULTS

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SQCDMESUPERIOR RESULTS

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PERFORMANCE MANAGEMENTIMPROVEMENT Tools, methods and standards ( Top meeting, Gemba Walk, reporting…)Kaizen

ORGANISATIONAL EFFICIENCY Flat organization with Cell structure=> Improvement of communication, sense of ownership and motivation

PROXIMITY LEADERSHIP LEADERS Development ONE TEAM =>TEAMS Growth => Collective performance

Professional project : Transforming the manufacturing department

The program of operational excellence is based mainly on three majors pillars:

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• Principle of 100% owner : Each cell has a person (Cell manager) in charge of objectives

• Simplification of the structure (Only 3 hierarchy levels instead of 5) => Motivation and

Empowerment

• Improvement of coordination between conditioning – Process – Quality and maintenance

• The cells have optimized size (number of lines <=4 , staff managed by the cell manger don’t

exceed 30 people)

Production manger

Cell manager 1 Cell manager 2 Cell manager 3

Operator Leader

Advantages of cell structure

Traditional structure Cell structure

Production manager

Conditioning manager Process manager

Foremen

Team leaders

Operators

Foremen

Teams leaders

Operators

Functional Quality and

maintenance resources

Coordinator/perf manger of cell

The cell structure was the cornestone of this transformation

4 main tools were chosen to drive the cell organization and ensure a correct implementation

TOP meetings

Plan tour (VTT)

Problem solving Groups

Safety dialogues

Groupe de Progrès

Diagramme Causes / Effet Remplir le document à la main sur le terrain.

Causes

Effet : décrire le problème

Partir du problème. Poser la question « pourquoi » 5 fois jusqu’à trouver la cause racine

Périmètre :

Plan d’action Remplir le document à lamain sur le terrain.

Chantier :

Datedu

constat

ProblèmeDes faits concrets, mesurés.Tirer un trait sous la dernière cause

CauseUn problème peut avoir plusieurs causes.Tirer un trait sous chaque cause.

Solution / ActionConcret et précis.Une seule action par case et un seul pilote.

Pilote de l’actionDate prévue pour Do

Date constatée du DoM = maintenant

P D

A C

page:

P é r i m è t r e :

P l a n d ’ a c t i o n R e m p l i r l e d o c u m e n t à l a m a i n s u r l e t e r r a i n .

C h a n t i e r :

18 juin 201610

Some visuals illustrating TOP meetings

Action plan

Table of performance

indicators ( SQCDMN)

Table of 3P ( Presence,

Punctuality & Performance)

Plant Tour Gemba walk plan

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2

4

8

3*

5

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7*9*

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13

15

7*

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Contrôle propreté zone

déchets

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12*

17*

D

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Occasion to practice MBWA ( Management by Walking around)

Very formalized plan with check list

Cover the entire factory

Reduce the variability with systematic monitoring

After Gemba walk, employees should

provide feedback in the form of a grade

explaining if they like or not the tour

Objectives

Elimination of wastes

We conducted many studies and action about wastes ( products, unnecessary movement, space…) and managed to reduce them by almost 50%

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Operator’s movement / shift = 14 km !

Added

Value / shift

10 %

Experiment carried out with the use a

Cardio frequency meter

Example of operator movement in line during a shift of 8 hours

We conducted a change management program based on communication, training and team building sessions

Ora

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•Meeting with factory managers and staff representatives

•Kick-off meeting outside the factory

•Ceremony & review after 3 months

Wri

tten

•Posters

•Special edition of the internal newsletter

Oth

er

•Intranet

•CEO speech about the change

•Film about the implementation in Salé

•Logos, Caps, Tee-shirts…

Problem solving (2 days)Need of change / discover other ways of

working in operations (2 days)

Non-hierarchical management (2 days)Maintenance (2 days)

Communication plan

Training of leaders

Paint-ball

Beach-

volley

Team building session

The project Motto : own your performance with the CAP project

CAP : Cellules Autonomes de Production

18/06/2016

Rituals poster : Improve your performance with new rituals

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1.80 m

2.20 m

2.45 m

1.20 m

We carried one day convention par site

19291900 1960 1990

Theme of the convention

How to reach a new level of performance with an innovative organization and new methods ?

Back first

The roller

scissors

Feet first

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0,0

5,0

10,0

15,0

20,0

25,0

2009 2010 2011 2012

Accidents Frequency Rate (Number accident/ 1 million hour)

Safety

Reduction of accidents

frequency from 22 in

2009 to 5,8 in 2012

82%

84%

86%

88%

90%

92%

94%

96%

98%

100%

2009 2010 2011 2012

Quality Conformity

0,0

100,0

200,0

300,0

400,0

500,0

600,0

2009 2010 2011 2012

Labor productivity (Tons/Full Time Equivalent)

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QualityImprovement of quality

conformity from 88% in

2009 to 98% in 2012*

CostImprovement of labor

Productivity by 38%

We achieved very interesting results (1/2)

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Delivery

Improvement of

operational efficiency

from 68% in 2009 to 77%

in 2012.*

MobilizationImprovement of training

hours by more than

300%*

NatureReduction of water and

energy consumption

We achieved very interesting results (2/2)

62,0%

64,0%

66,0%

68,0%

70,0%

72,0%

74,0%

76,0%

78,0%

2009 2010 2011 2012

% Operational Efficiency (OE)

0,0

5,0

10,0

15,0

20,0

25,0

30,0

2009 2010 2011 2012

Training Hours/employee

200,0

205,0

210,0

215,0

220,0

225,0

230,0

235,0

240,0

245,0

2009 2010 2011 2012

Energy Ratios (Total kWheq/Ton)

Social Responsability

This program of operational excellence has a major Corporate Social Responsibility (CSR) contribution, in particular, in terms of:• Reinforcing the social mission of the company of bringing

health through food to the largest number of people

• Improving the safety of employees, empowering them and boosting their motivation

• Helping the government promoting operational excellence in Morocco.

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Tunisia

Algeria

Egypt

MoroccoAlgeria

Article in the l’ECONOMISTE

newspaper

How the MBA helped me in this project ?

I used materials from many courses• Operations• Supply chain• Strategic management• Understanding organization• Change management• Negotiation• Human resources• …

Have big picture of situations and business• => helped me to position the manufacturing department as a business

partner creating value and non only as a technical department

Improve my capacity to mobilize and empower teams

Constructive negotiation

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