Roberto Priolo visits Yeo Valley and discusses the yogurt manufacturer’s approach to standards and strategic planning with Steve Welch, Group CI and Yogurt Manufacturing Manager, and Chris Coles, Continuous Improvement Manager.
Roberto Priolo: How would you describe Yeo Valley’s lean strategy?
Chris Coles: In a traditional manufacturing environment, strategy and vision can be seen as dirty words as experience shows that visions written on walls quickly become daydreams if no action is taken to make them reality. Whilst we don’t have a written vision or mission statement for the group, our strategic intent has always been to grow sustainably and ethically and there is a genuine passion to make this a reality.
Steve Welch: Our lean journey has been very interesting, especially at the Blagdon site, where we had to restart our lean programme due to external influences, including an unprecedented volume surge, that took our eyes off the ball. You can’t predict these sorts of things, which have the power to throw your programme off course, especially at an early stage. Had we had a mature lean programme, chances are the volume would have rolled through us without making a difference, because leader standard work and visual management would have just carried on. But, as the practices were not embedded, this was not the case.
RP: You are gradually rolling out your lean programme through all your sites – how do you make sure the strategy is consistent?
SW: There are two main levers we can pull to grow the business: increasing salvaged capacity or reducing cost of sales. We talk about doing “the same with less or more with the same”. In setting each site strategy, we don’t talk about delivery as such, or about engagement. These are outputs, and givens to trading successfully.
Each site has its own unique characteristics, challenges and opportunities. Each of them has objectives that feed into the strategic intent. Some may be focused on reducing cost of sales because they have surplus or sufficient capacity for the foreseeable future. Others might be concentrating more on increasing capacity. If you do one, the other one follows naturally.
CC: Each site really is different from the next. They are also at different stages in their lives. When we develop a site vision, we begin by explaining the situation of the business and how the sites can contribute to the success of the group. We then identify the key strengths that allow us to excel, the weaknesses we must address, the exploitable opportunities and the threats in the background. This helps us to develop a site vision which really means something to the people working there. It needs to talk to them, or they won’t buy into it and want to make it a reality.
RP: What action is needed in order to achieve your strategic goals?
SW: The developed strategy, goals and tactics don’t mean anything unless they are completely owned by the site management teams. They have to drive the vision, delivering it in a language their teams understand. To support the management teams, we are developing a Better Than Ever [YV’s lean programme] facilitation team. Whilst the actions must be fully owned by the management team and cannot be “done to” a site, the facilitation team will work to support their actions, facilitate improvement groups and audit the routine, repetitive actions to provide the structure that supports the programme.
RP: How do leader standard work and visual management feed into this?
SW: We haven’t understood the value of leader standard work linked to visual management until just recently. Visual management is just wallpaper unless you take the right action when the metrics displayed on your visual management are going the wrong way!
We are putting visual displays on some of the machines, as we become more focused on metrics and management discipline. Through leader standard work, each layer of management knows what they should be doing, what good looks like and learn how to proceed when significant deviation from the norm is experienced.
When a machine breaks down, we ask what to do to make it start again trying to break the silos of engineering, production and the other departments involved and to realise how to punch through as a team. This was the real breakthrough, and it feeds back into the strategy, which, for Blagdon, is increasing capacity.
CC: The need to create a working lean culture to fulfil one’s strategy is obvious, but as culture is such an intangible thing it’s not immediately obvious where it comes from! Our light bulb moment came when we realised that we should draw on the lessons of David Mann [Creating a Lean Culture] and Mike Rother [Toyota Kata] and concentrate on visual management and the routines that support it. When KPIs drift away from normality we expect our team managers to investigate the problems, with their operators, to properly understand the causes and come up with root cause countermeasures. By doing this we concentrate on physical actions that we can both directly affect and monitor that create an environment that is conducive for the correct type of culture.
We want people’s input and ideas, but we don’t naively engage for the sake of engaging: our main purpose is not involving people, but packing more yogurt more effectively. Real engagement is a by-product of this.
RP: Has this helped you to understand what lean means to Yeo Valley?
SW: We are at the end of a two year confusing journey, and we now realise it is actually very simple. We know exactly what lean is to us and it doesn’t mean to us what it means to Toyota or BAE Systems. We don’t have masses of stock or flow lines.
Ironically, several lean elements have been tried in the past but, at the time, we didn’t know anything about lean. We talk about leader standard work now. Four years ago we talked about DWMs.
SW: Daily, weekly, monthly routines. We believed that, for example, a junior manager needed to do certain tasks daily, others weekly or monthly. It was okay, but it wasn’t explicit enough: you need to be very specific as to what you want, otherwise people will go freestyle rather than following standards.
CC: The difference between DWMs and leader standard work is that with DWMs managers were told what to do, whereas with the latter we get the guys involved in developing the routines by asking them what they need to do and what they need from their boss. After we establish what tasks a manager must complete each day, we must have the discipline to ensure that the tasks are completed every time that they are scheduled. Part of each manager’s standard work is checking that their staff have completed their tasks. On top of daily checks, we expect our managers to ask their subordinates three questions every week about the tasks they should have completed: “Have you done everything?” If not, “What stopped you from doing it and what did you do to make sure it happens next time?” And finally, “What can I do to help you?” It’s all about cutting through the junk that is preventing them from doing their real jobs.
RP: How are people reacting to the introduction of LSW?
CC: When I told one of our plant managers we needed to get his managers doing the same things at the same time each day, he told me that it could never happen because they have too much to do. The mindset is still one of fire-fighting and getting the product out of the door. We have been very good at fighting fires for 25 years, but we have mostly moved on before figuring out how to put them out once and for all.
SW: Cross-functionality is very important to us. Traditionally we worked in different departmental silos where you can make a change here or there which can cause disaster further down the line. We try and cut through with cross-functional teams to get to the best total solution, which may not be the best for each individual silo. It is difficult when you start involving people, but when everyone is aware that the strategic intent is the bigger picture we have to look at we can make decisions for the good of the whole system.
It’s a very long term view, a nirvana almost. In this business, we now have a clear strategy for transformation. We had one, but now we are clearer on how policy deployment works, and that’s when leader standard work and management discipline roll in. It’s that simple, but getting people to believe it isn’t.
RP: How do you ensure the strategy is meaningful to all employees?
SW: Management at each site knows what a challenging market we operate in, they understand the strength of our foreign competitors and the need for growth to allow us to re-invest, but the workforce weren’t all aware.
CC: Effectively, at every level we explain what we would like to do, why we would like to do it and then work with the right people to identify how we can do it.
SW: We try to ensure that the current condition is properly understood before actions are taken. Take A3 planning: 80% of your effort is spent on the “left side”, where you try to understand the current state. We regularly find that if you spend enough time understanding the problem, the solution becomes obvious. We are normally wary of tools, but we find A3s support proper problem solving.
RP: How do you make sure your vision is always realistic?
CC: We keep the deployment process as easy as possible by taking baby steps rather than trying to achieve everything at once. We will deploy one goal and work with visual management, routines and cross-functional teams until standards become habits and then we build on those.
Everything we do is driven by data, including assessment of progress against strategy. For example, if we are attempting to reduce our operating costs, we find out where they come from and keep breaking the information down until we get to things that we can actually affect. At every level we follow the data, and that’s the key.
SW: We are not focussed on creating a lean culture per se, because that is an outcome. It’s the behaviours we are trying to change. Repetition is key to putting a strategy in place, and that’s the approach we are adopting.
RP: What can you tell me about Training Within Industry at Yeo Valley?
SW: We are deploying it across the business. We had a real need to identify the one best way to complete tasks and then embed it as a standard. Let me tell you, it’s a bit of a nightmare. In our blending department, there are four shifts that do 60% of the same thing. You don’t only have variation on a task in every shift, but also variation between the different people on each of the shifts. If you try to put an improvement in and you have 24 variations on doing the job, which in itself has 12 elements, can you really be surprised if things don’t go according to plan? The procedures used to be explained in 17 pages of text, but the job breakdown sheets have made the difference.
CC: The real work with TWI comes when you have the standard and try to make people work to that and not deviate from it. The standard TWI system was created for manufacturing lines where tasks take 45 to 60 seconds. At Yeo Valley tasks can last 35 minutes.
We monitor tasks every day and if someone is not following the standard we ask them why they are performing that task in a different way. If they tell us, “Because I think it’s quicker” or “easier” or “safer”, we immediately want to hear about it. If it really is, we can improve our standards.
We had to adapt TWI to work for us, but it has been a great success