The Coca-Cola Supply Chain Management Company (SCMC) manufactures and supplies non-carbonated drinks for Chinese markets. The Dongguan plant — the focus of this case study — was experiencing challenges on its Krones hot fill line. Read this case study to find out how they turned the line around, achieving improvements in machine efficiency, unplanned downtime, production volume and yield.
With the odds seemingly stacked against success in the early stages, the Krones hot fill line was chosen for the TRACC pilot implementation. Challenges included:
- Language — TRACC hadn’t been translated into Mandarin and few personnel could speak or understand English
- A skills shortage
- High staff turnover (more than 25% a year)
- Extraordinary production pressures because of erratic machine performance
Despite the challenges, the changes rapidly yielded impressive results.
Implementation on the pilot line kicked off with the foundation best practices. Despite the challenges, the changes rapidly yielded impressive results. Dongguan started with one task force, but nowadays the current five task forces are all driving the world class operations (WCO) implementation in their own areas. WCO implementation would also be rolled out to non-core operation areas. Profit Improvement Projects (PIPs) constitute a significant part of the improvement drive. Operators and supervisors were trained in the DMAIC problem-solving methodology and are solving problems that rival any Six Sigma black belt project.
Mechanical efficiency (ME) increased by 10%, 16% and 20% (pilot line) on the three production lines in the first year. ME improvements have since been sustained year-on-year. Improvements over the starting baseline are 13%, 17.5%, 37% (pilot line) and 49% (new production line). Unplanned downtime dropped by more than 50% since the project’s inception, while the order fulfilment rate increased from the low 90s to 98%.
Production volumes continue to grow exponentially and several all-time production records were shattered that year. In January of that year — traditionally a low-season production month — Dongguan matched the 2004 equivalent of five months’ production (when the programme started).
Material yields were consistently improving in leaps and bounds reducing the yield losses by between 21% and 79% in the first few years. This resulted in the Dongguan factory leading the field in the supply network yield benchmarks. Most impressive are the energy and water usage savings since the start of the world class operations (WCO) programme. Water usage per litre of beverage improved by 49%. Electricity consumption per litre of beverage declined by 35%, while fuel consumption per litre dropped by 41%.
When asked what sets the Dongguan implementation apart, the answer is simple: Dongguan’s site management has taken on WCO with a dogged determination and it’s now an integral part of SCMC’s corporate philosophy. Former group HR manager Wendy Ruan said, “All plant managers know there’s no career progression for managers who aren’t WCO literate.”
The SCMC entered an exciting new phase as the WCO process was rolled out to the Suzhou, Beijing and Xiamen sites. While early implementation challenges at Dongguan had been overcome, each site undoubtedly presented its own set of challenges. Fortunately there’s a strong team in Dongguan, as well as a forceful culture of sharing knowledge.
This resulted in the Dongguan factory leading the field in the supply network yield benchmarks.
Ainsley Mann, former CEO, summarised the extraordinary progress made since the implementation of WCO. He said, “As the black sheep in the family, Dongguan was spurned widely for its poor performance. It’s hard to believe that it’s now being visited regularly by industry peers as a reference factory.”
|At the time of publishing, the company operated through a supply location network of 11 Coca-Cola bottling plants in China, of which Dongguan plant in Guangdong Province, some three hours’ drive from Hong Kong, was the largest site. It operated four beverage lines with both hot and aseptic filling technology. Dongguan was the first site to implement TRACC best practices at the beginning of 2005.|
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