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American Society of Baking Chicago Marriott

March 3, 2014

Improving Bakery Manufacturing Performance How to Identify the Correct Tools and Develop an Implementation Plan

Continuous Improvement is not about the things you do well thats work. Continuous improvement is about removing the things that get in the way of

your work. The headaches, the things that slow you down, thats what continuous improvement is all about.

- Bruce Hamilton (President; Vice Chair of The Shingo Institute Board of Governors&

Member of The Shingo Academy & Shingo Examiner)

Why performance improvement is necessary

Increased competition Consumer demands Higher costs of raw materials and packaging Increased labor costs

Objectives

Categories of performance problems in your bakery Present available tools for improving manufacturing

performance Selecting the proper tool or combination of tools to solve

specific problems Developing a targeted implementation plan for the use of

these tools

Benefits

Enhance associate engagement Reduction of manufacturing costs Sustainable quality improvements Competitive advantage in the market place

Categories of performance problems

Training Rework Raw Material Waste Quality Waiting - Changeovers/Downtime

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The only thing worse than training your employees and having them leave is not

training them and having them stay. - Henry Ford

Training Aim to develop the knowledge, skills and attitude necessary

for effective performance of the work Reasons for Training

Product and quality service New technology Role and career flexibility Cost control Associate retention

Areas of training Knowledge Technical skills Techniques

Rework Mixing/Makeup

Dough re-added to the mixing or make-up process Wrapping

Having to re-code product Re-tie product Re-bag product

Warehouse/Shipping Staging the wrong product in the wrong area

Raw Material Waste Over scaled ingredients Product giveaway Overuse of dusting flour Over/under proofed dough Over/under baked product Damaged products in wrapping

Characteristic: Unbalanced workloads Process flow stops due to unplanned

interruptions Queues or idle time

Causes: Inconsistent work methods System Interruptions Lack of process standardization Capacity doesnt match volume Complexity Training systems

Waiting Changeovers/Downtime Waiting Changeovers/Downtime

Changeovers Scheduling production

accordingly Pan changes Allergen vs. Non Allergen

5S Shop layout Tool accessibility

Downtime Preventive maintenance

leading to Predictive maintenance to avoid equipment wear and tear

Robust training systems

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Quality Tools for improving manufacturing performance

5S Kaizen Value Stream Map Poka-Yoke Six Sigma

5S

5S is a program to reduce operational steps and improve the overall

cleanliness of a work area making it safer and more productive

Sort Set in Order

Shine Standardize Sustain

5 S Checklist

Floors clean Tools stored Gages clean Std WIP Safety Guards

5 S

Unnecessary

MAY 1996 JUNE 1996

JULY 1996

5S Process

From this

To This

5S Example Benefits of 5S

Reducing changeover, & cleaning time Reduce errors in set up & inventory Reduce waste in:

The amount of space needed for storage Work In Process (WIP) and Warehouse inventory Searching waste (when items are hard to find) Motion waste (poorly located equipment & supplies)

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Kaizen

Kai Zen

Change/Improvement Good/Continuous

Kaizen Usually team-based, where the scope and boundaries of a problem are

clearly defined Implementing do-now solutions through waste elimination

Stimulate change

Facilitates employee engagement and training/development Promotes problem solving skills Systematic approach to Lean production

Value Stream Map Hand drawn map of the process

Used to explain the process and the materials used at each point of the process

Assists in identifying line efficiency opportunities (bottlenecks)

Example of Value Stream Map

Benefits of Value Stream Maps Understand details of work flow in all functional areas to

satisfy customer needs Quantify lead time, travel distance and resources consumed Vehicle for waste elimination

Poka-Yoke Designing work processes to eliminate error

1. Control Approach Shuts down the process when an error occurs

Keeps the suspect part in place when an operation is incomplete

2. Warning Approach Signals the operator to stop the process and correct the problem

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Poka-Yoke Examples Benefits of Poka-Yoke Control approach

Eliminates the error

Warning Approach Eliminates the potential for error

Six Sigma Methodology to measure and improve companys

performance, practices and systems

Benefits of Six Sigma Assists in measuring, detecting, and maintaining quality

standards Data collection and decision making Leads to standardized processes Associate engagement and accountability

Selecting the proper tools to solve specific problems

Example of Training and Rework Utilizing Kaizen, 5S

Example of Raw Material Waste and Quality Utilizing Six Sigma

Example of Changeovers and Downtime Utilizing Value Stream Map, Poke Yoke, 5S

Lack of Training Assume there is a newly hired associate with NO knowledge of a baking process. The associate is not provided with an in-depth training program and receives 1 week of training shadowing with another associate. After 1 week of shadowing, the associate is placed on 3rd shift wrapping, running 2 baggers for an 8 hour shift.

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Rework is created During the 8 hour shift, the other

associates notice that 4,000 units of product has been placed in the wrong bag due to picking the wrong box

When the associate was trained, he/she grabbed the box from the area shown by the other associate

The veteran associate understands how to verify the type of boxes, the new associate does not have the experience

All units must be re-opened with the assistance of the other 2 wrapping associates and placed in the proper bag causing 4 hours of overtime

Estimated cost of rework =$300 Estimated cost of wasted packaging =

$200 Total Cost of Rework = $200 + $300

= $500

Utilization of Tools Kaizen Event takes place in the wrapping department Why? Data is collected and shows Lost Time The objective: Identify reasons for lost time

Team is assembled including: 2 wrapping associates 1 production supervisor 1 maintenance associate

Layout of Wrapping Area is created to understand where Lost Time is occurring

Utilization of Tools The team observes the wrapping process for a 2 week period

on multiple shifts, they conclude that rework is the main cause of Lost Time

An average of 1000 loaves have to be reworked per 3 shifts because of product being placed in the wrong bag

An average of 1 hour is needed to complete the rework after the associates shift has ended

The kaizen team decides to create an SOP and conduct 5S to provide clarity of varieties vs. bag types and train all wrapping associates

Utilization of Tools 5S Needed?!?

Vs.

The newly trained associate and veteran associates had to find the proper bag type for the appropriate product in this warehouse during a changeover

Are we setting the associates up for Failure?

5S is implemented, bags are condensed to 1 rack

Organized by variety, usage, and date received

Appropriate signage is posted for each box and variety

Training and Rework Analysis Assume that over a year the associates have been conducting rework on a daily basis on all 3 shifts 3 hours per day 15 hours per week

Rework = $60,000 Estimated cost of wasted packaging =

$30,000 Total Cost of Rework = $60,000 +

$30,000 = $90,000 per year

5S / Kaizen Implementation Rework is monitored after the 5S and

Kaizen Study

Rework has been reduced to 0.50 hours per day

Rework = $10,000 Estimated cost of wasted packaging =

$6,000

Total Cost of Rework = $10,000 + $6,000 =

$16,000 per year

Raw Material Waste & Quality Following the previous example in the wrapping department,

associates are having difficultly bagging product Similar varieties are coming to wrapping in all different

shapes and sizes Steps need to be taken to reduce or eliminate the variation of

product coming to the wrap

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Cost of Waste from Variation Assume that non-conforming product is 1 in every 100 units

Cost of labor and materials Assume 2000 units a day is wasted Labor and materials = $500 per day Cost of waste per year = $125,000

Cost to remake product 2000 units of product to remake = $75 per day Cost per year = $18,000 per year Total cost per year = $18,000 + $125,000 = $143,000

Implementing Six Sigma Six sigma can be implemented to reduce variability

within the process Current State:

Key characteristics within the process are not being monitored and recorded

Associates define quality standards with their own judgments Efforts to reduce waste is based on perception not data

Implementing Six Sigma Desired State:

Data is recorded and monitored constantly Product complies with consumer and company standards Decisions are made based on data not perception to improve quality

and reduce waste Associates understand data and are data driven to make decisions

Vs.

Implementing Six Sigma Six Sigma is now implemented to reduce the number of defects in your

bakery, associates are actively engaged and monitor process control The number of non-conforming units is decreased from 1/100 to 1/1000

Cost of labor and materials Assume 200 units wasted Labor and materials = $50 per day Waste per year = $12,000 of waste per year

Cost to remake product 200 Units of product to remake = $7 per day Cost per year = $1,500 per year

Total cost per year = $14,000 Cost has just decreased from $143,000 to $14,000 per year

Waiting - Changeovers Assume the process within your bakery consists of an average of 10 changeovers that are at least 30 minutes long per production day at the divider area. Value Stream Mapping, 5S, and Poka-Yoke are conducted to reduce changeovers and downtime.

Cost of Waiting Changeovers/Downtime Assume that you have an average of 30 minute changeovers

due to different pan types, allergen to non allergen, and scheduling

Assume that there are 10 changeovers per day

Changeover could cost up to = $400,000 per year in labor and materials

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Implementing Value Stream Maps It is noticed that during a

changeover that an associate must travel to 5 key areas in order to change pans and guides

Needed tools are not at the

proper locations for cleaning purposes

Mobile Equipment

Worker

Pallet

Mobile Equipment

Worker

Pallet

Implementing Poka-Yoke/5S Poka-Yoke

This takes the associate an average of 5 minutes to adjust pans and guides

Solution: All guides are now preset to set

collars 5 minutes has been reduced in

the changeover

5S All tools needed for a

changeover are placed on shadow boards within 5 ft of the associates work area

The 5S shadow boards reduce the changeovers by 10 minutes

Cost comparison Before

An average of 10 changeovers per production day

An average changeover at the divider is 30 minutes

6 different guides must be set-up taking on average 5 minutes

Tools for divider clean-up are scattered throughout the bake shop, costing time for the associate to search

Changeover costs = $400,000 per year

After An average of 10 changeovers per

production day Guides are now set automatically

when selecting a variety at the divider

Tools are placed next to the divider on a 5S shadow board

The changeover time changes to an average of 15 minutes

Changeover costs = $200,000 per year

Developing a targeted implementation plan

Understanding if you have in-house resources available to carry out implementation plan or if consultants are needed

Understanding of the company culture,

associates, and work environment to roll out implementation plan

Implementation Plan In House Resources

Do your associates have the knowledge needed to implement improvement tools?

Do your in-house resources have time needed to properly conduct these tools?

Benefit of utilizing associates with the knowledge of improvement tools: Understand the processes and

culture within your bakery

Consultants Outsources needed? Consultants provide training and

implementation Focus all their attention on the

efforts to help you improve Company provides objectives,

consultants provide the knowledge to develop plans for execution

Consultants are scalable Can contract for variable time

periods

Implementation Roll Out Sponsorship of senior leadership and plant leadership Alignment with organizational goals Providing resources necessary to implement tools Selection of key associates for implementation team

Associate empowerment to provide and carry out plan Monitor team direction, ensure data driven decisions

Commitment from all associates to engage on tools On-going communication of project status and results

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Conclusion Importance of improvement in todays competitive

environment Benefits of improving quality, profitability, and associate

engagement Wide availability of tools, choosing the correct tools for your

bakery culture Opportunities are inherent in any manufacturing facility Utilizing the tools available and engaging associates in the

proper use of these tools will result in productivity and performance improvements, both in process and associates

Questions?