Wonderful Pistachios & Almonds Journey to Lean Organization

Transcription

1 Wonderful Pistachios & Almonds Journey to Lean Organization August 26, Introductions 1

2 The Wonderful Company $4.8 Billion Wonderful Family of Products Clementines Red Texas Grapefruit Navel Oranges Minneola Tangelos Valencia Oranges Lemons & Limes 2

3 Wonderful Pistachios & Almonds Wonderful Pistachios & Almonds is the world s largest vertically integrated grower and processor of pistachios and almonds. Pistachio business: 250+ million lbs. annually Largest pistachio processor in the world ~60% share of the California production Full range of Wonderful branded products and bulk packages Almond business: 100 lbs. annually ~5% of the California almond production Your Presenters Tim Benshoof VP Finance & Strategy Ted Keller Director of Accounting 95 to 97 Cost Accounting 97 to 02 Plant Controller 02 to 06 Corporate Controller 06 to 08 Cooperative Tax 08 to 15 International Current FP&A and Strategy 99 to 02 Plant Accountant 02 to 04 Plant Accounting Manager 04 to 06 Six Sigma Finance Manager 06 to 08 Plant Controller Current Accounting 3

4 2. The Beginning of the Journey WP&A History with Continuous Improvement GE Way required reading for all leaders. GE Way (1999) Six Sigma (2003) 6 Sigma team lead by former GE Executive. All management trained. 6 Sigma team embraces Toyota Way lead by former McKinsey employee. Toyota Way (2006) Lean Manufacturing (2013) Operations team engage former Toyota executive to help implement a Lean Manufacturing culture. Accounting/Finance begins to explore Lean Accounting. Lean Organization (2015) 4

5 Our Problem ERP Transactions & Financial Data Physical Flow of activities required to receive, process and sell Pistachios and Almonds We are attempting to explain performance 45 to 60 days ago using financial data that is reallocated from accounting buckets to products using assumptions that may or may not be true to an audience that can t understand and doesn t trust the process. In early 2015 we wanted to change Improve measures to better support Strategic long term goals of the company Align reporting with lean practices and tools (PDCA/FMDS boards) Support continuous improvement efforts in production Lead To Decision Support Provide information and reporting that ensures that our business decisions and strategy are consistent with WPA objectives. Continuous Improvement Active participation with business to support process improvement at all levels (Strategic to shop floor). 10 5

6 Important Discoveries Missing Pieces Found Value Stream Management & Costing Box Scores Plain English P&L Key Concepts Shift Control from transactions to Lean Practices Easier and more timely close Accountable Teams Desired Outcomes Information into Action Align reporting to operation Eliminate waste Better collaboration and accountability Right the first time 6

7 Our Ultimate Goal Current State Journey to Lean Organization Future State x Years Departments Budget Variances Standard Costing Product P&L Oracle Transactions Delays Poor communication Rework and claims Value Streams Box Scores Value Stream Costing Simple Value Stream P&L Control via Lean Practices Timely Accountable Teams Right the first time 3. Getting Started (Complete) 7

8 Get started strategy Just get started. If we keep the end goal clear we will learn as we go. Don t over communicate with in organization. Keep it simple Shift Control from transactions to Lean Practices Accept that this is going to take time Identified Challenges Strong top down command and control culture History of success Departmentalization at all levels of the organization Operations vs. Finance instead of partnership We are built for push not pull (Sometimes increases lead times) 8

9 Pilot Project Six Month pilot to introduce Value Stream reporting (Single Value Stream). Purpose: Demonstrate the benefits of Value Stream reporting Pilot the use of box scores as a management tool Work through company unique details. Why Firebaugh Facility 1. Easy to identify unique value stream Unique set of suppliers Unique set of export customers Geographic separation from other value streams making it the most self sufficient 2. Dedicated management team 3. Simple operation 9

10 Phase I 1. Kick-off Meeting December 18, 2015 Present Value Stream Management project to Firebaugh team. Walk the value stream with Firebaugh team (Gemba). 2. Development of current state Value Stream January 18, 2016 (four hours) Value Stream Map (Flow of products and information) Value Stream Data (Tack times and resource requirements) 3. Development of WPA Beta Box Score Jan 19 to Feb 1 Measures performance for defined value stream Production, capacity and financial measures Concurrent with development of Performance Measure Linkage (ensures Box Score measures link and support WPA Hoshin Pillar targets. 4. Weekly Review of Box Score Feb 9 to present Measures and targets have evolved Content stabilizing and benefits recognized FB Value Stream Map January 18, 2015 (4 hours) 10

11 WPA PILLARS SAFETY Create and maintain a culture of safety and wellness for our employees PEOPLE Create community that fosters employee engagement and development Profitable Growth $.15 Management income after paying growers $.05 more than competition WASTE REDUCTION Relentless elimination of waste CUSTOMER SATISF 100% internal & external satisfaction on agreed deliverables STRATEGIC MEASUREMENTS LIR/SDR % TRAINED MANAGEMENT INCOME GROWER RETURN VS. BENCHMARK 5% DECREASE IN LABOR 5% DECREASE IN PLANT OVERHEAD 5% DECREASE IN SG&A INVENTORY LEVELS CUSTOMER QUALITY CLAIMS MISSED ORDERS INT/EXT REWORK VALUE STREAM GOALS X QUANTITY ACCIDENTS X QUANTITY PDCA TRAINING FUNCTIONAL CROSS TRAINING INCREASE REVENUE PER HEADCOUNT 5% SALES PRICE VS. BENCHMARK OR COMPETITION VALUE STREAM PROFIT OF X VS HURDLE RATE 5% DECREASE IN LABOR 5% DECREASE IN PLANT OVERHEAD 5% DECREASE IN SG&A ALL INVENTORY TURNS MONTHLY DECREASE ORDER LEADTIME TO 3.25 DAYS 0 CUSTOMER CLAIMS 100% ON TIME SHIPMENTS 0 REWORK VALUE STREAM MEASURMENTS TOTAL ACCIDENTS EMPLOYEE TRAINING HOURS/EMPLOYEE REVENUE PER HEADCOUNT SALES PRICE VALUE STREAM PROFIT TOTAL LABOR COST (ONE HOURLY BUCKET) TOTAL HOURLY HEADCOUNT (ONE HOURLY BUCKET) TOTAL OVERHEAD TOTAL SG&A (DIRECT) WIP LBS OVER XDAYS OLD PACKAGING INVENTORY DAYS ON HAND AVERAGE ORDER TURN TIME CELL CRITICAL SUCCESS FACTORS CLEAR SAFETY PRECEEDURES INCREASE TRAINING AND CROSS TRAINING USE STANDARD WORK CI PROJECT ENGAGEMENT TOTAL HOURLY HEADCOUNT (ONE HOURLY BUCKET) REDUCE OBSTICLES TO FLOW MAKE PRODUCTS ON TIME # QUALITY CLAIMS QUALITY AT SOURCE # MISSED ORDERS % FIRST TIME THROUGH CELL GOALS 0 ACCIDENTS CELL MEASUREMENTS 8/15/2016 Performance Measure Linkage HOSHIN PROCESS BOX SCORE SHOP FLOOR Started out too many measures that were too complicated Performance Measures should: 1. Motivate employees to improvement 2. Provide operational control 3. Reflect the business strategy of the company at every level 4. Gathered and reported simply and easily 5. Actionable Purpose by level: Cell Enable process teams to monitor, control, and improve their own activities. Still improving Value Stream Guide the value stream team in their continuous improvement pursuit of perfection Business (Hoshin) Enable senior managers to monitor the achievement of strategic goals and initiate strategy changes Basic Box Score Reviewed weekly by Firebaugh management team 11

12 4. Pilot Phase II (In Progress) Next Steps 12

13 Production Order E.U. LT:4HR %C&A:99.5 Staff:5 Batch: 44k Run Silo PT:10 Min OEE: Shifts:1/10/40 P/NP:85/15 Barriers to flow: Venting/Fumigation Production Order E.U. Production Order E.U. LT:Zero %C&A:85 Staff:4+1MNT Batch: 44k Barriers to flow: Request Batch Number PT:40 Min OEE: Shifts:1/10/40 P/NP:85/15 Production Order E.U. Request Blending Stock Request Batch Numbers LT:2 Days %C&A:90 Staff:13 Batch: 44k Request Blending Stock Barriers to flow: PT:10 Min OEE: Shifts:1/10/40 P/NP:85/15 Blending Stock Delivery Materials Request Delivery Delivery of Material Request Material LT:2 Days %C&A:92 Staff:4+1MNT Batch: 44k Create Tag PT:5 Min OEE: Request Sample Shifts:1/10/40 P/NP:85/15 Barriers to flow: Aflo/Quality Failures Request Pass/Fail Info Request IEH To sample BBI Receive BBI Info Forward BBI Info Request Release of Product Receive Pass/Fail Info Back Direct Load LT:5 Days %C&A:90 Request Release of Fumigation Staff:6+1MNT Batch: 44k Request Container & Order Number PT:3.25 Days OEE: Shifts:1/10/40 P/NP:85/15 Barriers to flow: Containers & Fumigation (78HRS & 45 MIN) Load time (3MIN) Receive delivery of Container and Order Number Confirm Shipped Product Receive Ship Dates Requst Ship Dates Order Schedule Receive Replacement Container Return Damaged Container Complaints Response to Complaints Enter order Order Ship to Customer 8/15/2016 Next Steps Go Deeper at Firebaugh Go Wider at Almonds FB Pilot Project Next Steps 1. Expand the scope of participation and Measurements Currently the Box Score only measures Firebaugh Facility. Phase II would expand scope to include additional LH functions (ie. CS, Quality). Phase III would expand to measure full value stream (i.e. Sales, SG&A) Value Stream Map Current State Firebaugh Inshell Bulk #2200 Phase Sales III Full Value Stream Customer (Bulk Pistachio Business View) Production Scheduling Control Quality Oracle (APEX) King Road Logistics Receiving Oracle (APEX) Assurance Phase II Expand Scope to include LH (Full Contract Processor View) Customer Service Oracle Silo Unloading Pre-processing Sorting Packaging Shipping 4 Hours Zero Phase I - Current Box Score Scope (Satellite Contract Processor View) 2 Days 2 Days 5 Days 5 Days Total Lead Time 10 Minutes 40 Minutes 10 Minutes 5 Minutes 3.25 Days 3.25 Days + 65 Minutes Total Process Time 13

14 5. What else we have learned Investment of Resources Required 14

15 Other Lessons Be conscious of terminology Don t over measure Don t be afraid of your auditors, they might be the easiest Educate your key stakeholders aggressively Get started then get help Key Resources 15

16 S U S T A I N A B I L I T Y Questions and Answers 16