Go lean, get faster, do better

There’s revolution in the FMCG air. In fact there are two revolutions – and we are fast approaching their “tipping point”, Professor Dan Jones (Lean Enterprise Academy) told delegates.

The first is a convenience revolution in retailing. The second is a revolution in compressing supply chains. And when the two converge, he warned, they will “take us beyond the achievements of ECR”, create new opportunities for “win-win-win co-operation between suppliers, retailers and consumers” and open up new business opportunities.

That was the starting point for a powerful account of the merits of “lean consumption and lean thinking in practice” by Professor Jones, graphically supported by the experience of chewing-gum manufacturer Wrigley. It was now possible in manufacturing to “break through from the world of batch production, constant short-term plan changes and unnecessarily long supply chains”. The key was not to start with low-volume, volatile or promoted products – “red products” as he termed them – but to “see where you can begin to flow quickly with the six per cent of your SKUs that account for 50 per cent of your production – green products”.

Doing this, he added, “energises your employees, simplifies your planning, enables you to embark on the path to producing every product every week and beyond to twice a week or even every day”. With these green products you could create a buffer stock to level orders and a stable production plan with fixed volumes and a fixed sequence. It became easier to track and eliminate root causes of interruptions. And as economies of repetition kicked in, it became possible to speed up the cycle and incorporate more products.

“What seems impossible is actually possible,” said Professor Jones – as Wrigley production director Alan Richards then went on to demonstrate.

Wrigley began its “lean journey” two years ago, driven by the need to improve efficiency, cut costs and reduce stock levels. Previous attempts to improve MRP production methods at the company’s Plymouth factory in the UK by working harder and faster had led to one simple conclusion, Richards said: “If you always do what you’ve always done, you’ll always get what you’ve always got!”

After reading about lean principles and undergoing training at the hands of the Lean Enterprise Academy, the company decided to ditch MRP and adopt flow procedures instead. All products were categorised as green or red, a new production plan was drawn up every six weeks and adhered to, the factory layout was changed to reduce cycle times, and the production plan was visible to all, including suppliers who were encouraged to adopt similar processes.

The results were dramatic. “We do more product changeovers now and we do them faster – the average time has gone from 90 minutes to seven minutes,” said Richards. Efficiency had improved by 12 per cent in the first year and costs were down by 10 per cent. Stock levels had been reduced by 30 per cent, waste was down by 60 per cent and there was now 40 per cent more manufacturing capacity. Workforce morale had also improved. Every Wrigley factory around the world is now adopting lean principles, he added.

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