IMPLEMENTATION OF LEAN MANUFACTURING IN FISH CANNING COMPANY: A CASE STUDY OF A CANNED SARDINES

PRODUCTION COMPANY IN MOROCCO

İ. Idrissi* IBN Tofail University Faculty of science kenitra Morocco Afflatus Consulting

A. Mesfioui IBN Tofail University Faculty of science kenitra Morocco

İ. Aftais

Padmanava College of Engineering Rourkela, Odisha-769002, India

A B S T R A C T K E Y W O R D S

A R T I C L E I N F O

Lean, Lean manufacturing, canned fish, optimization

Received 21 June 2015 Accepted 22 July 2015 Available online 1 December 2015

Lean is a powerful tool, which can bring significant

benefit to manufacturing industries by creating value

through reduction of waste. Although the lean concept

has become very popular in mass production industries

such as the automotive industry, more recently the

concept has been adopted in different batch

processing industries and service sectors. The

application of lean tools into the food processing

industry has not received the same level of attention

compared to the traditional manufacturing industries.

The paper discusses how the lean concept could be

applied to a fish manufacturing company. The paper

first presents the lean concept tools. The empirical

section discusses how a case company, operating as

a contract manufacturer in the food industry, has

applied the lean production concept and tools. In the

case study, three analysis tools are examined and the

structures of demand chains of different customers are

presented. The delivery times will decrease and more

flexibility will be needed from the contract

manufacturer. The case study shows that much

movement is possible toward the lean supply chain and

partnership-based cooperation. By implementing the

lean concept, food companies can increase customer

value through cost reduction or through provision of

additional value-enhanced services.

________________________________ * Corresponding Author

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1. Introduction

This paper focuses on improved understanding of the development of supply-

chain management in a food chain with a special reference to the lean production

concept. Womack and Jones (1996) defined a vision of the future organizational model

of manufacturing, the lean enterprise, as a group of individuals, functions, and legally

separate but operationally synchronized companies. This vision of the modern

production paradigm was described by Henry Ford in the early 1900s, and his writings

were later the basis for the Japanese production philosophy. The new manufacturing

paradigm, the lean management concept that places emphasis on outsourcing,

cooperation, networking, and agility (e.g. Womack, Jones, and Roos 1990), was

developed in the automobile industry and has been widely adopted in engineering-

oriented and assembly industries. So far, little has been written about the applicability of

the concept to the food industry.

This paper presents the lean production concept tools that are used to analyze

and develop production. The empirical illustration shows how a case company,

operating as a contract manufacturer of leading private-label products in the food

industry, has applied the lean production concept and tools.

A change occurred in the relationship between manufacturers and distributor

organizations in the 1980s and 1990s. Within a number of product markets, both food

and non-food, distributors launched their own products that inevitably forced

manufacturing companies to compete with the owner of the shelf space, in addition to

traditional competition with other manufacturers (Håkansson 2000). Store chains and

their brands have increased their market share in Europe and the USA. In Finland, the

share for store brands is about 20 percent. In other European countries the shares

exceed the share of store brands in Finland—e.g., 41 percent in England and 35

percent in Germany. The manufacturing of store brands—i.e., private-label products—is

more commonly assigned to small and medium-sized manufacturers that specialize in

particular product lines and concentrate on producing store brands (Private Label

Manufacturers Association 2005). These companies are called contract manufacturers

or subcontractors. The reasons for outsourcing include lack of inhouse capacity, need

for expertise in technology, financing (e.g., cost-cutting), union avoidance, product life-

cycle (outsourcing of old designs), and organizational changes in operations (Webster

and Beach 1999). According to Dolan and Meredith (2001), there are three reasons why

so many manufacturers have outsourced their products:

1) Money is in the brands, not in the machinery—i.e., the intangible assets are

more valuable than tangibles;

2) Globalization, which implies that production is easy to transfer to countries with

low labor costs; and

3) Only the biggest companies can fully utilize the capacity of their own factories.

In other words, contract manufacturers are able to obtain economies of scale in their

factories.

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The role of the customer company and contract manufacturers varies within the food

supply chain. The main responsibilities of a contract manufacturer are product planning,

sourcing and allocating materials, preparing and maintaining manufacturing operations,

and product manufacturing. The customer company should provide the product label,

manage the supply chain, and arrange marketing and after-the-sale service.

2. Lean Production

The Lean Production concept, introduced by Womack, Jones, and Roos (1990)

based on a comparative study in the automobile industry from Japanese and other parts

of the world, could be seen as a quantification of earlier “world class” and just-in-time

(JIT) manufacturing studies (Schonberger 1982; Monden 1983; Shingo 1981, 1985).

Womack, Jones, and Roos (1990) described the supply co-ordination system from the

Japanese point of view. Lamming (1993) developed the concept of the Lean Supply

Model, describing supply-chain management practices within lean production. The

origins of lean thinking can be found on the shop-floors of Japanese manufacturers. In

particular, the early work of Toyota has been highlighted. Lean production was first

defined by Womack, Jones, and Roos (1990) as a system that create outputs using less

of every input, similar to the traditional mass-production system but offering an

increased choice for the end user. This definition of lean production was based on the

concept of waste (“muda”) introduced by the Toyota Production System (Shingo 1981).

Waste means non-valueadding activities that, in the eyes of final customer, do not make

a product or service more valuable (Hines and Taylor 2000). The main pillars of lean

production are management of processes and the integrated logistics flow;

management of relationships with employees, teams, and suppliers; and management

of the change from traditional mass production (Hines 1994). After 1990, lean

production focused away from the shop floor. The value-stream concept evolved and

was able to extend beyond manufacturing to the single company stretching from

customer needs right back to raw-material sources. Womack and Jones (1996)

crystallized Value as the first principle of lean thinking. They define the Lean Enterprise

as a “group of individuals, functions and legally separate but operationally synchronized

companies. The notion of value stream defines the lean enterprise.” As such, lean had

moved away from a merely “shop-floor-focus” on waste and cost reduction to an

approach that sought to enhance value (or perceived value) to a customer by adding

product or service features while removing wasteful activities (Hines et al. 2002).

The mechanism of a lean enterprise is defined as a conference of all firms along

the stream, assisted by technical staff from “lean functions” in the participating firms, to

periodically conduct rapid analyses and then take improvement actions. Womack and

Jones (1996) also note that someone must be the leader of the lean enterprise and

argue that the firm bringing all of the designs and components together into the

complete product should be the leader. However, the participants must treat each other

as equals and the lean system must be transparent (i.e., participating firms should have

the right to examine every activity in every firm relevant to the value stream as a part of

the joint search for waste.). Womack and Jones (1994, 1996) also highlight the fact that

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a single company will participate in multiple, competing streams with different upstream

and downstream partners in order to learn from companies that think in different ways.

This is a key to continuous improvement. The purpose of the firm itself as a part of the

lean enterprise is to be the link between streams. The links are the means to make

maximum use of technologies and capabilities accumulated by the firm’s technical

functions. They also provide the means for shifting resources between value streams.

3. Case Company

The case company was founded in the early 2010s, based on production of canned fish.

It then shifted its focus into the European market; the case company had been certified

HACCP (Hazard analysis, critical control points) IFS Food Version 6(International

featured standard) and BRC Food Version 6(British retail consortium) Although the

employees’ general level of education is not high, the case company still decided to

implement some lean projects in order to reduce its operational cost, to improve its

financial performance and to better face an increasingly competitive market situation. A

Lean committee was established to facilitate the implementation process, including

building infrastructure, proposing and selecting projects, tollgate review and decisions

related to rewards. As there were many aspects to be improved, the projects were first

prioritized systematically and two projects were selected in the first year. Champions,

usually the leaders of all the departments and supporting units, were then in charge of

monitoring progress and ensuring the success of each selected project. Every year, all

the champions had to propose some candidate projects according to their department’s

KPI (key performance index) and submit them to the committee to be approved. Several

important issues, such as improving customer satisfaction, lowering product defect

rates, reducing recruit cycle time and shortening new product development time were

discussed in the committee. Every possible alternative was prioritized by using the C&E

(cause and effect) matrix. Criteria being considered to select the most critical projects

included the effects on KPI, impact on customers, data accessibility, project hard

savings and the time needed to reach the improvement goal. Among all these candidate

projects, lowering product defect rates was considered the most critical, as it is highly

correlated to KPI and customer impact.

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Figure 1: Flowchart of mackerel fillets production

4. Methodology

First, a lean team was formed with the people from different departments in the

company, who were knowledgeable and experienced about the products, processes,

equipment, and planning. Lean team leader collected the production data and

generated the process map by studying each stage of the manufacturing processes with

the help from the team members. Strategic areas for implementing lean tools were

identified based on the data and observation. Among many issues related to

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manufacturing, high waste in raw materials and motion, high consumption of water,

electricity and liquid nitrogen, lack of 5S and Total Productive

Maintenance (TPM) in practice, high machine downtime during changeover and lack of

communications between departments were considered for investigation. Five Key

Performance Indicators (KPIs) were identified: Safety, Quality, Volume and delivery,

Cost, People and Morale, and Environment. The lean projects strongly relevant to the

KPI of the company were carefully and systematically selected and implemented in

order to achieve immediate tangible benefits with minimum investment. A data collection

procedure and structured problem solving technique were established. Boards were

displayed in the shop floor to communicate action lists and control charts. The progress

of lean implementation was regularly reviewed in senior management meetings as well.

5. Results of Lean Implementation

Although a number of lean techniques were applied in the production, packaging

and warehouse areas, in this paper the results were presented based on mainly four

lean principles: Waste reduction, 5S, Single Minute Exchange of Dies (SMED), and

Overall Equipment Effectiveness (OEE).

5.1 Waste Reduction

Data collection on food waste over a six-month period indicated that Interim

storage of cooked fish dewatering over 2 hours, No qualification of the workforce,

Incorrect exploitation of equipment, Lack of manpower, Insufficient space to work the

cooked fish, Poor filling before cooking grids Lack of supervision, Fish small mold

causing duplication of work, and insufficient Storage capacity of refrigeration room

represent the high waste areas (Fig. 2). Waste was generated in the cooling process

more frequently than the other areas in production. With the application of good

practices, the daily due to No qualification of the workforce, incorrect exploitation of

equipment and Lack of manpower were drastically reduced.

Table 1: Data collected to make the pareto chart

Name Value Relative frequency Cumulative frequency

Interim storage of cooked fish dewatering over 2 hours 36 35.78 35.78

No qualification of the workforce 24 23.85 59.64

Incorrect exploitation of equipment 12 11.93 71.56

Lack of manpower 9.5 9.44 81.01

Insufficient space to work the cooked fish 7.9 7.85 88.86

Poor filling before cooking grids 7.8 7.75 96.61

Lack of supervision 2.4 2.39 99

Fish small mold causing duplication of work 1 0.99 99.99

insufficient Storage capacity of refrigeration room 0.01 0.01 100

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Figure 1: Pareto chart

5.2 5S

The housekeeping tool 5S has been implemented in the daily routines across the entire

site from production to office space to improve the organization of production. 5S areas

of responsibilities were distributed among the employees to own the process. Single

point lessons were learnt from each activity and 5S audits were carried out regularly to

generate 5S score point. New 5S audit boards for production, packing, warehouse, and

office were put in the shop floor to communicate the activities and scores. Although, the

initial score was low (between 30 and 40), gradually the score was improved as shown

in the data collected for six months. Dramatic improvements were achieved in

housekeeping and cleanliness, which was absolutely essential in food manufacturing.

Furthermore, 5S activities generated standard operating procedure, reduced the time

searching for tools, improved 5S awareness, and increased employee motivation

through ownership.

5.3 Single Minute Exchange of Die

African food manufacturing industries are characterized by wide range of product mix,

frequent changeover in the production line and shorter production runs. In some food

processing operations such as in this case company, one product does not run through

a particular production line everyday rather multiple products are manufactured even in

a single day. This shorter production run means frequent changeover, which leads to

increased machine down-time and labor hours. Single Minute Exchange of Die (SMED)

is a lean tool, which can dramatically reduce the changeover or set-up time. Set-up time

is defined as the time between the last good piece off the current run and the first good

piece off the next run. Several SMED activities were carried out at the packing and

forming areas. Using Video analysis and reviewing the process, the changeover time in

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the forming machine was significantly reduced. By working as a team in a Formula 1 pit

stop style, the operations of cleaning with hot water, standardizing equipment position in

the line and standardizing changeover procedure reduced the changeover time resulting

in better production capability, flexibility, and production efficiency.

6. Discussions

In this study, the lean tools have not only been implemented but also the tangible

benefits to the company have been measured in each case. Although a significant

waste of expensive raw materials was eliminated in the mixing area, it was difficult to

estimate in terms cost saving. However, the activity surely contributed to the

improvement in process yield. The elimination of waste not only helped the company

financially, but also brought considerable environmental benefit, reducing the company’s

carbon footprint. Whist the exact changes in environmental impact are yet to be fully

determined, it is clear that these changes are very much in the spirit of the company’s

long-term mission. It should be emphasized here that financial benefits were achieved

with a minimum amount of investment, which could be paid back in a short time in most

cases within a year. It has been demonstrated earlier that simple changes to the

machines (cutting and seaming) saved a lot of waste in oil and fish. Therefore, working

closely with the equipment manufacturers could be a way forward in order to improve

the machine design for reducing waste, easy maintenance and quick changeover.

Although the general shop floor workers were not familiar with the concept of lean

manufacturing, they quickly learned it through a structured training program and hands

on practical work in the team. This created a learning environment through team

working and a continuous improvement culture in the company by involving everybody

from operator to senior management. This also generated friendly competition between

shifts resulting in improved production efficiency. Finally, the establishment of

continuous improvement team in the company ensured that a long-term improvement

plan was in place for sustaining the lean program and the quest for continuous

improvement was carried on.

The biggest challenges in implementing the lean were the resistance to change from the

operators and personnel changes in production management. The implementation of

lean manufacturing does not happen overnight; it needs time, stamina, better

communication and support from the top management to make the changes a reality.

As the competition is rising continuously, it is absolutely vital to accomplish and sustain

the incremental changes towards achieving the long term stability and competitiveness

in the business.

7. Conclusions

This case study clearly demonstrates that it is feasible to apply lean principles in a fish

canning company. The systematic application of lean tools has started with the waste

elimination in different process steps of the manufacturing cycle across different product

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range. Waste reduction in Interim storage of cooked fish dewatering over 2 hours, No

qualification of the workforce, incorrect exploitation of equipment, Lack of manpower

Insufficient space to work the cooked fish, Poor filling before cooking grids, Lack of

supervision and Fish small mold causing duplication of work has resulted significant cost

savings for the company and created more value for the customers. The introduction of

5S across the whole factory including office areas has led to a more organized, clean

and safer production area and also increased efficiency due to motivated operators and

shorter time for searching tools. The SMED activities have increased the opportunities

for set-up time reduction leading to quick changeover and shorter lead times. In

summary, the lean activities can facilitate the food company to be competitive in the

market by reducing cost, improving productivity, teamwork, and consistency of product

quality.

Acknowledgments: The supports from the fish canning company and Ibn Tofail

University are sincerely acknowledged to carry out this study.

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