Improved operational efficiency helps Swire meet strong demand for soft drinks in China

Swire produces and distributes a total of 58 soft drink brands across a franchise population of more than 460 million people. The phenomenal growth of the Coca-Cola Company brand in China placed pressure on Swire’s network of bottling facilities not only in terms of cost, but also in terms of capacity. This highlighted the need to improve line utilisation and to develop front-line capability.

In order to handle this accelerated growth of the beverage market in China, Swire needed a solution to manage the forecasted growth of 13 of its plants, as well as build internal capability. Each of these plants operates relatively independently, but each facility does not manufacture all stock-keeping units (SKUs) that they sell. As a result, additional plants were needed to supply products due to facility capacity restraints.

Rather than selecting a pilot project on a specific bottling line, Swire management opted to roll out the full bundle of TRACCs at two pilot plants — Nanjing and Zhengzhou. The main aim was to improve net line utilisation (NLU) and machine efficiency (ME). Additionally, TRACC was implemented at the site level to optimise materials and resource capacities across each stage of the bottling process, improve plant throughput by reducing changeovers, and perfect the product mix of the individual bottling lines.

In spite of initial implementation challenges such as a lack of employee engagement, management actively participated in the launch campaigns. This was followed by the introduction of a formal reward and recognition scheme and the establishment of change implementation structures.

Since the introduction of TRACC, Swire has been able to cope with rapid growth in both complexity and sales volume against a background of more demanding customer service levels. This was mainly as a result of improved operational efficiencies and a stabilised workforce.

Net line utilisation increased from 67.9% to 80%, an overall improvement of 12%. Water consumption dropped by 15%. Wastewater discharged from the water treatment system is also recovered and reused, saving 25 million litres of raw water per year. As part of the site selection process, a source vulnerability assessment was conducted to avoid adverse water impact from future plant operation. Subsequently, a source water protection plan was drawn up to ensure sustainable water supply to the plant and the community.

“Since implementing TRACC, employee morale, motivation and sense of ownership have increased tenfold. Employees share their thoughts and offer possible solutions to problems during gemba walks, something that has never happened before,” said WCM Manager Huang Zhimin. “TRACC has provided our work teams with a common language and consistent improvement direction.”

Swire’s success illustrates the importance of best practice maturity and demonstrates how the growing Chinese beverage industry is embracing continuous improvement solutions while still applying local cultural principles. From the strategy level to the operational level, Swire synchronised its supply chain network, overcame operational challenges and reinforced its leadership position in China’s competitive consumer beverage market.

TRACC is currently actively deployed at 14 plants across 48 lines, including the large plants in Guangzhou, Huizhou and Luohe. More than 600 manufacturing and supply chain Profit Improvement Projects (PIPs) have been completed successfully over the past seven years — culminating in savings of close to RMB* 57 million. (*Chinese Yuan)