Supporting Cost Reduction Projects with a Food Industry Multinational
STARTING POINT; CLIENT NEEDS:
Nowadays, there are not many industries where top management is not focusing on cost reduction targets in their production processes. This was the exact case with our meat processing clients employing ~2000 people. The first and mid-management of the company, including: plant, maintenance, MEO, shift leaders and group leaders were directly supporting production. They have already participated at a leadership development programme where they already got acquainted with hard and soft skills elements necessary for handling leadership challenges. Besides the classic leadership trainings, they’ve participated at Lean management trainings too. The production director was expecting to see the rise of cost reduction projects, where leaders would start up and follow through cost reductions on their respective areas. Since this was not happening, the director asked us to support these people with launching real development projects that would finally become auto-running in the mid-and long-term.
Development concept:
Since participants were familiar with the basics and tools of Lean management, therefore we had to focus on the following things:
- first-hand experience of project management in practice
- conscious project selection: preliminary cost reductions and cost budgeting
- how not to have dead-end projects
- how to have real and measurable results
- gathering project presentation experience
We made sure to plan 2 project circles in both plants. Firstly, participants learnt a bit of SixSigma project management methodology (DMAIC), yet they’ve already started working on their individual projects meanwhile. Therefore, 8-10 projects were running in every plant unit. In the first round, there were project consultations every second week; in the second round, we met only once a month, therefore teams had to become more and more self-reliant.
Essence of the consultation was:
- progress report presentations
- presenting achievements of the past period (2-4 weeks) highlighting their results and difficulties that were overcome
- plans for the upcoming 2-4 weeks
- supporting the project with ideas coming from the operating team and the consultant.
Results:
After the end of a project cycle (6 months), the teams presented their results to the production director. Thanks to the presentations done at consultations with us, these ones were straightforward and smooth.
We’ve prepared a follow-up support table system – as requested by the production director – where he could check the real-time cost savings of the projects after their closure time.
The production director measured a saving of ~750.000 EUR coming from the projects supported by our consultants. These projects included the following topic areas:
- waste reduction in primary commodities
- reduction of machine down time
- increase of efficiency
- machine switchover time reduction (SMED)
- packaging waste reduction
- water and electricity consumption reduction
- spare part inventory optimization
- ergonomic development
The most important part of the project: leaders were running cost reduction projects on their own in the following period with great success.
