Leveraging Lean for Competitive Advantage
Fresca Foods is a full-service, natural food co-packer. They provide end-to-end supply chain management services, including custom recipe product development, sourcing high quality natural and organic raw ingredients, sophisticated co-pack manufacturing, unique packaging solutions, and global logistics expertise.
Customers concentrate on sales and marketing for their products while Fresca Foods takes care of everything else. Fresca Foods has 225 employees and operates over 80,000 square feet of manufacturing, distribution, and office space in Colorado.
“Fresca Foods was looking for flexibility in our factory and capacity management that would allow us to better utilize resources and reduce operating costs by reducing waste in the process. We more than achieved our goal when we learned how to see the waste. With the help of Transformance Advisors, we far exceeded our goal of 500% ROI. We realized significant cost savings and implemented the changes in a very short 3 months.”
– Lorenzo, Gonzalez, HMM Manager and Certified Lean Master, Fresca Foods
Quality is a number one priority in the food processing industry. Sanitation, changeover times, shift changes, maintenance, and inevitable schedule changes are just some of the constraints and challenges. A particular pain point for Fresca Foods was the inflexible routine of running one batch of product each shift and then shutting down for an extended changeover to the next batch. To complicate matters, the kitting for each batch included extra materials provided just-in-case there was time to produce more than expected. This would often increase costs as unused materials needed to be restocked at the end of each shift.
Fresca Foods challenged Transformance Advisors to provide advice and help them leverage the Certified Lean Master program to run their first lean improvement project. This project would follow the systematic approach to eliminating waste including the use of value stream mapping and proven techniques for changeover reduction. The team at Fresca Foods wanted to improve flexibility and increase capacity by reducing the time wasted during changeovers. This would allow manufacturing to run smaller production orders instead of the long runs required to support the cost of long changeover cycle time.
The instructors, from Transformance Advisors, provided education and guidance to help the Fresca Foods team understand lean tools and concepts. They used value stream mapping and kaizen blitz events to “see the waste” and measure material flows, inventory, scheduling priorities, capacity utilization, labor productivity, and other resources. The “lost capacity” identified during every shift opened everyone’s eyes to the enormous potential provided by improving the changeover cycle times. The team decided to revisit how everyone had defined batches and factory capacity.
Following the standard changeover reduction methodology, the team crafted a future state value stream map, created an implementation plan, and executed the changes. The production operators were involved from the beginning and they now track hourly output against the plan instead of just tracking if a batch was completed by the end of their shift.
Reducing the time wasted during changeovers and redesigning the flow of production has provided a 40% increase in capacity – all with nearly no new costs. Increased flexibility has provided a competitive advantage by allowing the schedule to better match customer orders and has resulted in reduced lead time and better service. Kitting for orders is now done to support the scheduled requirements and the wasted time for restocking has been reduced.
The improved flexibility and better productivity has allowed Fresca Foods to pursue more business at a lower operating cost.