Achieving continuous improvement in manufacturing

Continuous improvement helps organizations navigate ongoing global uncertainty. Here’s how an integrated approach to continuous improvement unlocked greatness for seven global manufacturers.

In our increasingly globalized economy, disruptive events in one corner of the world reach further and farther than ever before. The power of continuous improvement in manufacturing to help organizations withstand such volatility is particularly important now.

In terms of scale, the COVID-19 pandemic has had an unprecedented impact on supply chains and business operations. Organizations, whether ready for it or not, have had to embrace digital transformation and remote working as quickly as possible to stay relevant and productive.

Ongoing uncertainty is a reminder that change is constant. To maintain sustainable business performance, organizations need to embed a culture of integrated and continuous improvement (CI) into their operational cores.

 

What is continuous improvement in manufacturing?

Continuous improvement is a deliberate, purposeful and ongoing mission to make small but meaningful differences that can guide manufacturers toward operational excellence across the value chain. It empowers each team member to constantly rethink how things can be done better, faster, safer and more efficiently, with the overall objective of improving organizational performance.

Among the most common continuous improvement methodologies in manufacturing are the lean philosophies of the Toyota Production System (TPS), Six Sigma and Kaizen. Yet organizations that rely on traditional or siloed production processes apply their CI methods in a piecemeal fashion that is unable to drive positive change across the company.

An integrated approach to continuous improvement in the manufacturing industry is a far better fit for organizations on their digital transformation journeys. A digitalized production environment dismantles functional silos and requires holistic manufacturing improvement initiatives that are integrated and incremental.

 

Download the eBook The definitive guide to integrative improvement for more on this holistic and sustainable approach to continuous improvement.

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Integrative manufacturing process improvement: Key focus areas

Integrative continuous improvement is made up of three key focus areas:

1. The customer End-to-end processes are arranged to address customer needs rather than functional requirements.
2. The employees All employees are involved in driving and delivering innovation and continuous improvement initiatives to improve processes and systems. This not only improves buy-in from team members; it increases an organization’s innate problem-solving capabilities as well.
3. The leadership Company leaders must be committed to leading the continuous improvement process throughout the organization. Their actions and behaviors are crucial to creating an integrated CI company culture.

When CI methodologies are applied company-wide, global organizations are able to respond to changing consumer demands and supply chain disruptions with greater agility. Manufacturing improvements are transformational and enduring, uniting people, systems and processes to effect positive and sustainable change.

 

The benefits of integrated continuous improvement

The overarching benefit of an integrated approach to continuous improvement in manufacturing operations is that it strengthens an organization’s resilience. When CI is built into a company’s cultural DNA it creates an end-to-end value chain that is robust and agile. These organizations are able to navigate disruptive events, periods of difficulty and crisis, as well as moments of opportunity with stability and success. Specific benefits include:

  • Embedded operational excellence
  • Sustainable competitive advantage
  • Empowered and accountable employees
  • Reduced costs and waste
  • Improved productivity and operational efficiencies
  • Increased bottom-line revenue
  • World-class maturity and capabilities

To express these benefits in tangible results, here is an outline of the typical ROI achieved through an integrative CI solution. The results are broken down into three business segments – Customer, Cost and Cash:
Customer, Cost and Cash

7 top examples of continuous improvement in manufacturing operations

Some of the world’s biggest manufacturers across various industries follow an integrated CI approach and have achieved notable successes. Here are seven examples of how continuous improvement in manufacturing can unlock greatness in an organization’s value streams.

1. Cargill

Cargill Inc. is one of the world’s largest agribusiness corporations. As a primary player in the US corn processing industry, Cargill’s corn milling site in the remote mid-western town of Eddyville is one of its flagship plants. The site’s status took a hit when profitability and KPI performance began to dip. Fortunately, plant management acted quickly to halt further deterioration.

The Challenge Cargill is committed to purchasing and processing sustainably produced corn. Its CI initiatives were thus directed at three key segments: the farmer, the customer and the environment. The issue was that there was no CI cohesion at the Eddyville plant. The improvement projects in place lacked buy-in, leadership and support.
The Solution Plant management chose the TRACC Value Chain Improvement Solution to ensure a quick turnaround. Its Rapid Best Practice Deployment program focused on operational areas, leadership behaviors and mindsets, manufacturing processes, organizational culture and training.
The Result All employees were included in the development and delivery of a fully integrative CI system to improve accountability, project execution, KPIs and shop floor involvement. This ensured an enduring transformation with sustainable and positive results.
  • Eddyville plant moved up the divisional performance standings in just 6 months
  • More than US$700,000 realized in project savings
  • Plant got back on track to achieve 150% of its normal target
  • Best practice deployment initiatives to be rolled out across the Cargill Group

2. Colombina

Colombina is a global food and candy manufacturer with Latin American roots. Its fast growth on the world stage introduced the organization to some new and disruptive challenges. The company realized it needed to act quickly and decisively to stay relevant and sustain its growth.

The Challenge Navigating the international arena presented the management team with new levels of market competition, regulatory requirements and ever-changing customer demands.
The Solution The company introduced a best practice system – based on the TRACC solution – called Colombina World Class. An implementation and multidisciplinary task force developed a new way of work based on the continuous development of products and processes, cooperation and autonomy.
The Result The result was a strong and committed leadership culture supported by engaged and accountable employees, all focused on achieving the organization’s strategic objectives. Colombina’s investment in the World Class best practice system resulted in the following improvements:
  • 6 to 1 ROI increase (benefits and savings vs expenses)
  • 13.8% increase in overall production efficiency (OPE)
  • 26% decrease in work-related accidents
  • 69% reduction in variable manufacturing costs
  • 76% decrease in product returns
  • 2% increase in production plan compliance
  • 3.4% improvement in operating ratio

3. Distell

As Africa’s leading producer and marketer of wines, spirits, ciders and other ready-to-drink (RTD) beverages sold globally, Distell operates an internationally networked supply chain. In 2013, an executive-led transformation of Distell’s end-to-end capabilities improved its global supply chain efficiencies.

The Challenge Distell relied on siloed manufacturing and supply networks. This became untenable as market competition strengthened and growth in cider declined. What is more, despite large investment in IT and R&D, supply chain performance remained poor.
The Solution Distell partnered with Competitive Capabilities International (CCi) to support and streamline its supply chain optimization strategy and E2 (Empowering Excellence) initiative.
The Result To achieve sustainable long-term performance and world-class status, an integrated and holistic supply chain solution was developed and implemented. Not only did it address existing bottlenecks and inefficiencies, but it exceeded customer expectations and increased shareholder returns too.
  • Over R2.5 billion (US$174 million) in savings across the supply chain in 5 years
  • 10% increase in on time in full (OTIF)
  • 25% improvement in reliability
  • 10% increase in OEE
  • 30% increase in productivity
  • Between 20% and 40% reduced Cost of Goods Sold (CoGS) over 5 years
  • 20% reduction in stock days

4. DuPont

DuPont operates in more than 70 countries around the world. Its Shenzhen plant in China struggled to realize the benefits of lean and Six Sigma. The company needed a way to apply these CI tools in an integrated and systematic approach across its manufacturing operations.

The Challenge The Shenzhen plant was battling to improve employee empowerment and shop floor engagement. Hierarchical team structures and zero cross-functional alignment led to disengagement and a high operator turnover rate.
The Solution The DuPont Production System (DPS), powered by TRACC, enabled the plant to prepare, pursue and achieve its ambitious goals according to the DPS principles. There were four stages of implementation led by a Site Steering Committee.
The Result Over a five-year period, DuPont’s Shenzhen plant upskilled its shop floor employees, which improved overall workforce engagement. In recognition of its excellent commitment to advancing CI practices and sustained performance improvement, the plant received the Global DPS Excellence Award.
  • US8.1 million hard savings on improvement projects
  • 75% improvement in equipment downtime
  • 40% improvement in operator turnover rate

5. Finlays Kenya

Finlays is an international B2B supplier of tea, coffee and botanical solutions. Its tea farm is located in Kenya’s highlands west of the Great Rift Valley. When the company decided to integrate two of its extract factories, challenges arose that needed urgent attention.

The Challenge Integrating the two manufacturing systems was challenging due to one factory still operating manually and the other being automated. To bridge this gap, team upskilling and integration was required to bring everyone to the same level of operational capabilities.
The Solution Finlays partnered with CCi to establish a system of continuous improvement of production and processes across its operations. Through a TRACC-based World-Class Operations (WCO) program, the two plants’ people and process capabilities were developed for a more seamless integration.
The Result The company’s entire culture has changed for the better. Open communication enables and encourages teams to solve problems together as well as take full accountability for their work. As a result, customers are satisfied and Finlays has gained its competitive advantage.
  • OEE improved from 42% to 81%
  • First pass quality up from 85% to 99%
  • Availability leapt from 78% to 93%
  • Yield on made tea increased from 25% to 33%

6. IPL

Incitec Pivot Ltd, or IPL, produces a wide range of explosives, fertilizers and industrial chemicals in manufacturing facilities around the world. In 2010, the company’s newly appointed CEO recognized the need to build a high-performance culture of continuous improvement.

The Challenge The 2009 global financial crisis reduced IPL’s productivity and plant reliability while increasing its energy, labor and operating costs. During this challenging period, IPL acquired Dyno Nobel, which came with a relatively mature lean manufacturing culture. IPL wanted to leverage this maturity and introduce a CI culture across the group’s factory floors.
The Solution The IPL Business System, or Business Excellence (BEx), underpinned by the TRACC system, helped improve overall equipment effectiveness (OEE) and increased production volumes.
The Result BEx kicked off in 2011 and key manufacturing improvements proved beneficial almost immediately.
  • About AU$300 million reduction in working capital
  • 20% improvement in OEE at Initiating Systems plants
  • Over AU$570 million in EBIT gross benefits
  • 35% reduction in recordable safety-related injuries as well as an 85% reduction in injury severity
  • Record outputs at IPL’s largest chemical plants

7. Swire

Swire Beverages is one of the largest Coca-Cola bottlers in the world. When its Huizhou plant in China came under increased cost and capacity pressures, it needed an integrated CI solution.

The Challenge The Coca-Cola Company brand’s growth in China put Swire’s bottling facilities under enormous pressure with its Huizhou plant carrying the biggest load. To fill its capacity gap in high seasons, overcome resource constraints and fulfil demand, the Huizhou plant was paying other Coca-Cola plants to make and ship products.
The Solution Swire introduced CCi’s integrative improvement solution, the TRACC-based World-Class Operations (WCO) program, to its Huizhou plant. The WCO campaign emphasized leadership commitment and support, capability building and the application of leader standard work (LSW) to encourage accountability and ownership.
The Result The true benefit of WCO goes beyond cost savings. The Swire Huizhou plant benefited from enhanced resilience thanks to an embedded CI culture of positive and enduring change.
  •  Total savings of over RMB (Chinese Yuan) 7.6 million from 2011 to 2018 on PET Line #12 alone
  • ROI in excess of 300% on Line #12 alone
  • Number of material rejects reduced by 80% over seven years
  • Line efficiency increased by more than 4%
  • Better employee engagement and a strong talent pipeline
  • Supply chain agility and flexibility
  • Living CI culture

Today, organizations need to embrace continuous process improvement to stay relevant in an increasingly competitive and global market. Integrated CI approaches have consistently demonstrated greater overall business performance remarkable ROI for manufacturers and industrial companies across the world. That’s why continuous improvement is the key to success for today’s businesses.

 

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