Roberto Priolo (RP) visits yogurt manufacturer Yeo Valley’s Blagdon site and discusses the company’s lean programme and the main mistakes that were first made, speaking with group CI and yogurt manufacturing manager Steve Welch (SW), communications director Graham Keating (GK) and continuous improvement manager Chris Coles (CC).
RP – Can you tell us about the lean programme at Yeo Valley and how you got around to it?
SW – We started with three initiatives at our Cannington site, where I was the general manager. It was a Kaizen Blitz approach, but the real opportunity came when I was transferred as general manager to our Blagdon site. I had a chance to start from scratch, enrolling on the MSc in Lean Operations, along with Chris Coles, my CI manager, at the Lean Enterprise Research Centre in Cardiff. Over the last year we have created a lean transformation programme, which we have branded Better Than Ever and rolled out together with TWI to lock down the changes for the processes that transform the product. Tools are useless unless they are linked with a strategy.
SW – It’s all about rationalisation and repetition. For example, we have four blending shifts, all blending yogurt and fruit together in a slightly different way. You cannot achieve change, which is a gargantuan task in itself, that way. We are trying to identify learnings as we go and textbook applications often don’t make sense to us. It’s through practice that we understand what works and what doesn’t for Yeo Valley. Take inventory reduction, for example: it doesn’t mean anything to us, because we have limited inventory. Given the short shelf life of our products, what we have is flash inventory. However, the overarching principles are still applicable.
Another difficulty we had is that we couldn’t afford the time to, say, not produce for a week while we sorted out the best way forward, like the shut downs enjoyed in the motor industry. In the FMCG sector, you have to create time.
RP – What were the main mistakes you made in trying to ensure buy-in?
SW – The hardest part for us was convincing the management team. In the back of their minds they wondered if this was merely a short lived initiative. By the time you are done with the mid-level and front-line managers, senior management enthusiasm was starting to cool. We are now running cross-functional teams working on data-driven projects aligned to the site objectives. This creates belief in the process, as substantive actions are surfacing. It is a long and arduous process, taking a huge amount of commitment.
GK – Ten years ago, we were trying to improve our health and safety performance. In our industry, there are a lot of wet floors and fast movement, and we soon realised we had to change the way things were. Today people would be shocked if they saw a colleague doing something unsafe, that’s how embedded our health and safety mindset is. Lean is not there yet, although given the nature of the products we manufacture we have probably adopted some inherently lean practices since the very beginning.
Communication is a contact sport, and you should never forget you are asking people to do something difficult, and to be engaged. They have to understand why and what are the benefits, and then they have to be rewarded. When we realised that people read notice boards very infrequently, we introduced our ‘Gateway’ Intranet system and, for those without regular access to a PC, we invented YVTV six years ago, with digital signage screens in the canteens. People now expect effective communication. Blagdon salvaged 15 minutes at the start of each day for each department to have a brief, scripted by the operations manager, covering safety, quality, service and so on. What happened yesterday? Today? What is going to happen tomorrow? This orientates them for the day ahead.
RP – Lean is usually deployed to better respond to customer requirements, but you were already doing this very well, with a customer service rate of 98%. What was the driver for wanting to implement change?
GK – Our market has been changing. We produce retailer brands, and we also have our own brand. In the old days, own label often meant one product wrapped into different packs for different retailers. Now they all have uniquely differentiated products. This was a big change in our product development, but it also meant that our production runs have become shorter and shorter. We are also under pressure on price, as the UK market is highly competitive and about 60% of products are sold on promotion. From a manufacturing point of view, we experienced a perfect storm of greater complexity, shorter lead times and increasing costs. Our world is ever more frenetic and demanding, so we had to keep unnecessary costs down.
RP – Where did you start with the deployment of your lean strategy?
SW – As the company grew, the amount of time we spent fire-fighting repetitive issues increased. Historically, whilst a lot of energy has gone into these activities, it wasn’t coordinated with collaboration between different departments. As a result, the root cause is often not determined thus the fix is not permanently embedded, and the problem just comes back.
Directors and senior management teams have a clear sense of purpose, but our management processes weren’t great at communicating it to all levels of our workforce. This often resulted in localised improvements that might or might not help the business to reach its top-level goals. To combat this, a concise set of clear business goals were generated, broken down into operational tactics and deployed through the different levels of management, who then break the tactics down further into clear actions.
Selected cross-functional teams set to work, a member of the management team facilitating the process and meeting once a week. We provide full access to all relevant data and minuted actions and responsibilities are captured as the work progresses. Individual members of the senior management team “observe” the work teams, demonstrating a show of commitment to the process but being careful not to take over the controls.
Tools are then pulled in as required. Finally, verification and further action if neccessary, following the PDCA cycle, signifies the disbanding of the original team and the creation of the next one in a continual cycle of change.
CC – Our response to procedural non-compliances has often been on a case by case basis. Traditionally issues have been seen as solely the fault of the operator and dealt with by re-training in the procedure, whether it is valid or not. By looking at recurring problems and identifying issues inherent in the system, we are able to stop many issues from occurring. When we are doing this, we talk to the operators who aren’t creating non-compliances, as well as those who are, to ensure that we get the whole picture.
RP – Would you consider the Kaizen Blitz in Cannington an error or a necessary step in identifying the real problems and root causes?
SW – It was great in terms of our learning curve. I would do it in the same way again. It made us understand that a transformation programme won’t stick unless you have enabling factors. Active learning backed up by a theoretical frame work is essential. LERC have been very supportive.
CC – We were taught the best way to use tools. It’s now called for by the team. The guys are asking us to help them do that. We have the experience of the Kaizen process, and we can apply it at the right time, constantly keeping data at the core.
RP – Do you believe in rewarding individual success within a lean programme?
CC – It is often impossible to quantify the value of an individuals contribution to the programme. For this reason, we chose not to link rewards to the level of contribution as this could lead to individuals being demotivated if their contribution is not as highly valued as another. We ensure that recognition is given when people are involved in activities that have not previously been considered as part of their job. This can be a certificate for attending a course, an article on our YVTV internal information system, or could even be as simple as a thank-you from one of the management team.
RP – What sort of support do you provide managers with?
SW – When you are on a site, the key is keeping the enthusiasm alive and reinforcing the belief, my job is therefore managing conversations. Keep attention and interest on what Better Than Ever can achieve. It’s constant reassurance. Some struggle to buy in, but we will keep trying to convert them, usually through involvement in the transformation.
With TWI, we have taken procedures that were 17 pages long and reduced them, through the efforts of the operators, to two or three pages. That makes people want to make the next set. When they get a new team member, and it takes 20 minutes rather than an hour to go through a procedure, team managers realise it’s easier for them. With crossfunctional teams it’s different, but only when they know the angle and the importance of ‘busting problems’. They are cautious to start with, because responsibility and accountability comes with recognition.
SW – Openness and honesty go a long way in breaking down barriers, so admission of past mistakes underlines the message that the old way of working is not good enough. When engaging with the workforce, everybody would be instantaneously ‘zoned out’ if I didn’t capture the moment. I use previous mistakes and learning as an opener and I mention the fact that this process is not perfect and that we are still learning and making mistakes. It’s going to be a difficult and bumpy road, but eventually it will make our lives easier, our jobs more secure, our business better. We will still encounter moments of confusion, but I believe it is humbling when you hear a general manager say, “We don’t have the answer, let’s find it together”. I don’t want a list of things going wrong, I want to see what we can improve. Excitement is contagious, you need to have the courage to put your beliefs out there, knowing that the conversion process is a bumpy journey.
RP – In conclusion, what were the main mistakes you made at the beginning of Yeo Valley’s lean journey?
SW – My lack of understanding of the requirement for strategy. Forget the Kaizen Blitz, it culturally didn’t fit. I tended to try and fix a problem before I understood it. Strategy takes an opposite approach, and six months ago I got it: one strategy aligns a company towards its goals and a set of objectives and tactics are developed to achieve them, with feedback loops continually correcting the process, similar to landing an aircraft. In Cannington, it was all about fixing this and that, but not the whole picture. The other mistake was a lack of appreciation of the system. You have to understand what you do as a business.
Culture is something that will only change over time and the process is very difficult to quantify. It is invisible and yet all around us. We found that, until we had a clear idea of what we wanted, we couldn’t take steps in realising it. Our beliefs have been strongly influenced by the work of Dr. Pauline Found from LERC and others, whereby the ‘below the waterline’ enabling factors from the Lean Iceberg model (strategy, alignement, leadership, behaviour and engagement) have to be firmly in place before improvement can be considered.
Going forward, we are rolling out the Better Than Ever transformation programme to the group in the new year, supported by Graham Clarke (ex-director of TRW steering systems and business associate of Cardiff University) and Lloyd Warlow, our knowledge transfer partnership associate. We will apply the model developed at Blagdon but anticipate further steep learning curves as we continue our journey.