Daily Management System yields sweet operational wins for Mackay Sugar

Executive summary

Mackay Sugar Limited introduced a TRACC-powered Operational Excellence programme aimed at increasing efficiencies and reducing waste. Visual Management was the first TRACC to be implemented and since then, the site has developed an effective five-tiered Daily Management System (DMS). The implementation of Leader Standard Work (LSW) was also trialled on the site with favourable outcomes.

RESULTS
  • 20% reduction in time wasted in meetings equating to AUS$636 000 per annum saving
  • Increased employee accountability
  • LSW resulted in increased discipline, improved alignment of KPIs to processes and more predictable performance outcomes
Challenges

During the implementation of the Visual Management TRACC, a survey was undertaken. It found that over AUS$3.18 million worth of employee time was consumed by meetings each year; more than 20% of this time was found to be wasteful.

Mackay Sugar was previously data rich but information poor. Team meetings only occurred at Production Management (MDT) level and KPIs were not visually displayed. There were also no established protocols to deal with issues.

Solution

A data and results-driven approach to formal daily and weekly conversations at all levels of the organisation was established. Any operational issues were visually displayed for problem-solving to occur. Team members were assigned clear accountability to follow up on specific actions.

Overall, there were now more meetings; but the time spent on issues had decreased dramatically.

This was achieved via effective implementation of a five-tiered Daily Management System (DMS):

Tier 5 (weekly)Executive Management
Strategic/Systemic issues
Accountability-style approach
Tier 4 (weekly)Operations Management
Strategic/Systemic issues
Accountability-style approach
Tier 3 (weekly)Factory Management
Strategic/Systemic issues
KPI/Accountability-style approach
Tier 2 (daily)Production Management (MDT)
Systemic/Situational issues
KPI-style approach
Tier 1 (per shift)Production (Shop Floor)
Situational issues
KPI-style approach

Key Performance Indicators (KPIs) were tracked; green indicated the target had been met or exceeded and red highlighted deviations. Countermeasures were developed and assigned to team members to action any deviations from the KPI targets. All work areas and departments, including support departments (Finance, HR, etc.), within the business started using the DMS.

Overall, there were now more meetings; but the cumulative time spent on issues had decreased dramatically. All team members understood what the focus was for each day and communication processes improved.

The benefits achieved from the DMS process were complemented by a Leader Standard Work (LSW) trial. A pilot for LSW was undertaken with the electrical team. The Farleigh shift electricians commenced a trial to implement a standard work process at Tier 1 level that was highly visual, interactive and simple. This would provide a baseline by which all can see whether things are ‘in control’ and ‘being taken-care-of’ in terms of Production Maintenance.

LSW is about setting clear standards of expected behaviour and practices which focuses the leaders on doing the right thing (processes and results). It enables a systematic approach to daily tasks supporting stability and reducing variation, and it drives accountability by aligning strategic objectives to the process.

Mackay Sugar commenced the LSW trial via the use of Kamishibai cards (K-cards). These are laminated cards displayed in the work areas showing processes routinely undertaken that address KPIs specific for each role. K-cards are submitted to one-up managers weekly who discuss causes for misses with employees, as well as realistic countermeasures to avoid future occurrences.

Results

The implementation of a structured five-tiered Daily Management System (DMS) at Mackay Sugar resulted in a transparent data and results-driven approach to formal daily and weekly conversations at all levels of the organisation. The DMS is closely aligned to the hoshin kanri process and is a direct result of a three-year strategy and annual plan. The plan is signed off at director level on a single A3 page and cascaded through the A3 process to factory level. KPIs and targets are also derived from this strategic plan.

Kamishibai explained

Kamishibai is a form of storytelling using visual cards/boards. This originated in Japanese Buddhist temples in the 12th century, where monks used emakimono (picture scrolls) to convey stories with moral lessons to a mostly illiterate audience.

Today it is being used as a management tool for performing audits within a manufacturing process as part of the Toyota Production System (TPS). A series of cards is placed on a board and selected at random or according to schedule by supervisors and managers of the area. This ensures that safety and cleanliness of the workplace are maintained and that quality checks are being performed.

KPIs at each level are tracked and actioned as required, with clear accountability for follow-up actions assigned. While the implementation of this process resulted in more meetings, the meetings were more productive with more than 20% reduction in time wasted, equating to AUS$636 000 per annum saving to the business.

The LSW trial resulted in increased discipline, improved alignment of KPIs to processes and more predictable performance outcomes. The weekly reporting of the K-cards to one-up managers also provided a good coaching opportunity to address and develop countermeasures for any actions not undertaken.

Company Background

Mackay Sugar is Australia’s second largest milling company with over 140 years’ experience. There are currently four operating mill sites at Farleigh, Marian, Racecourse and Mossman. Products include raw and refined sugar, molasses and renewable energy.

Disclaimer:

This resource has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained herein without obtaining specific professional advice. Competitive Capabilities International (CCi) does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this resource or for any decision based on it.