Sponsored by Computer Associates - Van den Bergh Foods.
Van den Bergh Foods
Activity: Margarine manufacture
Task: Low-cost, high-productivity production of branded consumer foods to high quality standards
Size: 370 employees
Outstanding Features: Preventive maintenance, human resource management, continuous improvement, manufacturing strategy, process control
Van den Bergh's margarine factory at Purfleet, Essex, brings to mind words like 'considered' and 'thoughtful'. Some factory managements are apt to engage in a great number of supposedly beneficial initiatives almost willy-nilly, without seriously considering their suitability: TQM - or some other ideology - is the current fashion, so it is adopted. This is not the case at Van den Bergh Foods where, as manager Neil Hufton is quick to point out, programmes have been selected after careful analysis of the gap between the factory's position at the time, and where it needed to be. In the judges' view, Hufton and his team deserve credit for not adopting a variety of initiatives but for choosing their solutions with care and intelligence.
The commercial imperatives are easily summarised. The Purfleet factory ('the largest margarine factory in the world,' according to Hufton) produces 250,000 tonnes of emulsified fats per year including a number of Unilever's best known brands, such as Flora, Stork, I Can't Believe It's Not Butter and Blue Band. However Purfleet is one of eight margarine plants which Unilever owns in Europe. Taking a view that the group might not always want as many as eight production units, Hufton and his colleagues set about turning their factory into a low-cost, high-quality showcase.
Their success in bringing this about is all the more remarkable given some of the constraints under which they operated. The factory has been on the site since 1918 - allowing ample time for inefficiencies based on custom and practice to become embedded. Changing people's mind-sets in an environment where labour turnover is close to zero - thanks to annual pay packages of some £25,000 - was a feat in itself. That Hufton and his team have gone on to generate such evident enthusiasm, and commitment to change at all levels of this workforce, is genuinely impressive. The price has been heavy investment in education, but - as these pages have noted in previous years - education is in the long run cheaper than ignorance.
The judges were struck by many aspects of the Purfleet factory - too many to describe in detail here. For one thing, it is exceptionally well equipped and laid out. 'That has not happened by accident,' insists Hufton. But rather it is the result of extensive research and benchmarking of competitors. It would be quite wrong, though, to assume that 'well equipped' means newly equipped. Much of the machinery on the packing lines is clearly old but is nevertheless very well-maintained.
That, too, is no accident. 'We were two years ahead of the rest of Unilever in deciding that Total Productive Maintenance was the way to go,' says Hufton. Purfleet's implementation of TPM is highly visible: for example, 'spyholes' cut into the oil sumps of machines indicate the exact oil level without need for dipsticks or instrumentation. Perspex panels, in place of metal ones, reveal any build-up of dust. Care of assets is excellent throughout, standing comparison with the best that the judges have found anywhere. The factory has adopted an anglicised 4S code of practice (inspired by the Japanese 5S model) which is specifically linked to housekeeping: 1 Sort though, sort out; 2 Simplify; 3 Shine and sweep your area; 4 Set standards.
Again, like other outstanding plants that the judges have visited over the years, the Purfleet site has been divided up into smaller units, or mini-factories, each with its own management, maintenance and measurements.
'We wanted to achieve the focus of a small factory, with the economies of scale of a large one,' says Hufton.
Smaller units, he is convinced, smooth the introduction of empowerment and help to reinforce the continuous improvement programmes.
The factory's renegotiated conditions of employment are also worthy of comment. In the old days, 'demarcation was rife, overtime was sky-high, stop-start shifts brought wastage and breakdowns, and any staff training was carried out in overtime shifts or not at all'. The revised conditions, under the heading New Look Employment, brought about a change that was 'more revolution than evolution'. It ended demarcation and introduced continuous seven-day working on an annualised hours basis.
The difference between the 1,779 hours that every employee is contracted to work each year, and the actual working hours implied by the present shift pattern, amounts to some 70-80 hours. These extra hours are available for training, planned extra production or for meetings. The deal - which involved a pay increase of around 30% - also extracted an undertaking that employees would, if required, work a further 282 'committed hours' per year, over and above the 1,779.
Payment for these committed hours is included in each month's salary, whether or not they are have actually been worked.
Indeed, the intention, as Hufton is at pains to stress, is that they should not need to be worked. 'We will only need to use them if we have failed in some respect, or if the plant has suffered from an unseasonaly high level of sickness,' he explains. The actual usage of this 'committed' time averages around 30 hours.
Employees telephone in to a freephone answering machine, and a taped message tells them whether or not they are required that day. Overtime working, which in former days boosted basic pay by up to 50%, has dropped to 'virtually nil'.
Van den Bergh's Purfleet plant is one of the very best that the judges have visited during the years that the award has been running. In 1996 it is unquestionably Factory of the Year.
Process Industry Award - Sponsor: Computer Associates
Computer Associates AS400 Manufacturing and Distribution Independent Business Unit (iBU) is a division of Computer Associates Inc, world leader in mission-critical business software. This new division is responsible for the development, support, marketing and sales of integrated financial, manufacturing and distribution software solutions around the world. The objective of CA's AS400 iBU is to provide a set of solutions (CA-PRMS, CA-KBM and CA-Warehouse Boss) that meet the needs of evolving manufacturing and distribution businesses, and are built on AS400 client/server technology.