4. The results
This section reports the results of the three months pilot. We distinguish the following elements:
a) the degree to which the planned cycles have been executed
b) the manufacturing regularity and the resulting improvements in yield and quality
c) customer service
d) inventory and work in process
e) organizational consequences
f) financial consequences
These elements will be discussed here subsequently.
Cyclic planning
The cyclic planning has been realized rather precisely. The starting point was kept, the run-sizes
(in number of tanks) of the cyclic blends were kept. The disturbances in extraction led to a runsize
variation in the breathing blend of up to 10% . The finishing time of the fixed part of the
cycle did not vary more than 15 minutes.
Manufacturing regularity, quality and yield
There are two elements of manufacturing regularity. In the first place the cyclical regularity of
the fixed cyclical sequence. This makes it possible to give more attention to the change-overs. In
the variable period the sequence is also kept as constant as possible. The second element of
manufacturing regularity is the regularity of in-process times. The in-process times with an
important quality impact are the time between extraction and centrifugation, the time between
centrifugation and packaging and the time between packaging and freezing. The standard
deviation of the time before centrifugation and the time between centrifugation and packaging
have both been reduced with about two hours. The time between packaging and freezing has also
been reduced because there are now 6 freezing tunnels in use which makes it possible to
synchronize packaging and freezing.
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There was indeed a small yield increase and a substantial yield variation reduction. The people
involved tend to subscribe these changes to the introduction of cyclic production. But the pilot
has been too short to draw final conclusions here.
Customer service and inventory
The changes have not been discussed very explicitly yet with the Opco’s. This is partly due to
the fact that within Sara Lee the contacts with the customers are the end responsibility of Value
stream management (VSM), a unit that does not fall under plant management. That makes the
decision process about changes in these relationships more complicated.
The delivery reliability for the non-collaborative Opco’s is defined as the percentage of the
deployment plan that is realized. That percentage has not changed. For the collaborative Opco’s
the local sku inventories are relevant. There is a norm safety stock that varies from 3 – 5 weeks
(depending on the blend). During the pilot it appeared to be possible to keep the safety stocks
right on this norm, while before the pilot, the safety stocks varied from 0 to 8 weeks. This
improved control of safety stocks resulted in a reduction of overtime stock. The pilot has also led
to a more systematic measuring and reporting of the run-out times at sku level.
The total inventory has increased. The total inventory was at the start of the pilot below the
critical limit. The increase during this period is partly normal, because of demand seasonality and
because of the yearly winter-stop. The run-sizes for the cyclic blends in this pilot were above
average, to realize this increase. Thereafter the run-sizes have been reduced.
Organization
The first, very general impression is that all operational people (planning and scheduling people
and production people) are indeed more aware of the material flow. The production people
understand better how their decisions influence the synchronization of the subsequent production
steps. The SCCG people, in making their short term planning, are more aware of the scheduling
consequences. The short term plan is closer to execution than before. Before it was the output of
rather mechanistic MRP type calculations. In-attractive scheduling consequences were discussed
of course, but only if the people of the DPSG group asked for adaptations. The sku allocation
through the excel LP-solver makes a decision routine necessary that is not embedded in SAP.
Downloading, allocation and uploading necessitate a well maintained script. The distance
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between the SCCG group and the floor is smaller and the role of the DPSG group is smaller with
respect to liquid production and packaging. Working in cycles with a week pattern that starts on
Friday complicates the DPSG task a little. They have to upload the production runs of two
subsequent cycles (Monday to Thursday of one cycle and Friday to Sunday of the next one) to
SAP, because SAP works with calendar weeks.
An important change that is not completely coupled with the pilot, but that is certainly inspired
by it, is the introduction of the daily production meeting (DPM). It helped to implement cyclic
production, but it is also used to make the communication in general more effective and to
activate the problem solving potential.
All operational people are asked about their experiences and opinions regarding all changes.
These are in general positive. But it is hard to determine what the contribution is of the
individual elements cyclic production, 5-shift system and DPM.
The packaging line works in a 5-shift system now. They are expected to be able to follow
centrifugation rather closely, to keep the flow time between centrifugation and packaging stable.
The production speed ratios of packaging and the other resources depend on blend and box size.
It necessitates a high flexibility of the packaging line. This turns out to be difficult for the
packaging operators. There are many small stops now. That is perceived as a problem by the
packaging people. As long as the stops are not longer than half an hour, it does not lead to
quality problems.
Financial consequences
There are many financial consequences:
a) Transfer to a 5-shift system for the packaging line. This has been combined with a
reduction of the shift size. Reducing the fixed shift size led to the need to deploy more
temporary personnel.
b) Transfer to a 5-shift system in the freezing facilities. This includes the deployment of an
extra freezing tunnel.
c) Transportation cost. Transportation from the plant to the freezing facilities is at regular
intervals. Since the packaging line works longer per week now, there are more transports.
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d) Planned maintenance is done now on weekdays instead of during weekends. In the
weekends unplanned breakdowns may occur that need immediate repair. This has also
financial consequences.
e) Energy use. More stability leads to less use of energy.
f) Yield and quality effects. It is not clear yet how big these are.
g) Inventory reduction. This has not been realized yet. But it is possible to realize it from
now on, because the run-out time variations have been reduced indeed.
h) Influences on the size of the planning groups. On one hand there is more work, because
of the more complex downloading and uploading procedures. On the other hand there is
more repetition and simplicity. It is not clear yet what the total effect is.
It is not possible to draw final conclusions. The first estimate of the financial consequences is not
right away positive, but there are many possible improvements that could not be estimated yet or
deployed. The management decided to continue this way of production. The financial results
were not considered to be prohibitive and the potential improvements were sufficiently
attractive.