sprint team driven process improvement at the hershey …...hershey’s global operations vision *...

Sprint Team driven Process Improvement at The Hershey Company

Presentation

• Hershey’s Continuous Improvement Model

• Understand the Sprint Team Process

• Example of a successful Sprint Team

Draft

3

Deliver lowDeliver low--cost advantaged product consistently to meet the unique needs ofcost advantaged product consistently to meet the unique needs of

global customersglobal customers

Deliver Hershey world-class standards of safety, quality and

performance

Leverage scale and market presence to create low cost

competitive advantage

Manage across the internal and external value chain to deliver on business strategies

BestEnd-to-End

Delivered ValueCost

Advan

taged

Reliable

Integrated

Hershey’s Global Operations Vision

* Hershey’s Global Operations division includes all Manufacturing Plants, DCs, and supporting

groups: Continuous Improvement/Indus Engg, Engineering, Packaging, S&OP, R&D, Quality, etc.

Core Global Operations Strategies

1. Optimize end-to-end supply chain responsiveness, reliability and asset utilization (ROIC).

2. Deliver annual controllable cost reduction

3. Continuously improve business processes across the organization to increase visibility, integration and effectiveness.

4. Strengthen product quality processes and systems.

5. Create an environment that fosters employee engagement and a culture that is agile, adaptable, aligned and accountable.

Draft

Quality &

Safety

* ROIC = Return on Invested Capital = (Net Operating Profit less Adjusted Taxes)/(Invested Capital = Operating Working

Capital1 + Net PP&E + Goodwill)

To achieve these goals, we need…

• To be aligned as an organization to work on the mostimportant opportunities

• To standardize processes which maintain accountabilityto what our (internal and external) customers value.

• To develop working (“operating”) methods which promote agility and adaptability by:

» Focusing on delivering customer value» Eliminating waste; Reducing variation» Promoting collaboration/communication» Enhancing knowledge and learning

An ONGOING PROCESS to drive the results and create ownership for

improvement

The ongoing process for improvement is established in the framework of Hershey’s Continuous Improvement System

A philosophy to actively engage employees in improving

performance daily.

Identification

Agree which opportunityto focus on

Realize the opportunity as

effectively as possible

Continuous Improvement

Prioritization

OrganizationalBehavior

ImprovementTools

ResourceManagement

KNOW THE CUSTOMER VALUE

KNOW THE PROCESS

QUEST FOR PERFECTION !

The Hershey Continuous Improvement System

Now, let’s understand what is a Sprint Team and its relation to Hershey’s Continuous Improvement Model

A Sprint Team is…

…a cross-functional group…

…which targets a specific opportunity…

…to realize a large value in short time…

…by challenging existing constraints, …

…identifying the root causes…

…and implementing solutions…

…that are permanently sustained over time.

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MARATHON OPPORTUNITY:Delivers Results in the Future

$$$

$$

$

Long Time Invested

Full Benefit Gained

Marathon Activities produce the gains over the long term and do not produce tangible financial results, but they do significantly contribute to overall returns.

Marathon Activities produce the gains over the long term and do not produce tangible financial results, but they do significantly contribute to overall returns.

* By Marathon we mean 5S, Standard Work, Visual Factory tools, etc.

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SPRINT OPPORTUNITY:Delivers Results Immediately

$$$

$$

$

Short Time Invested

Benefit Gained

Taylor

Sprint Activities have focused outcomes which are directly measurable and usually produce a noticeable and rapid return.

Sprint Activities have focused outcomes which are directly measurable and usually produce a noticeable and rapid return.

7 Steps of a Sprint Team

Step 1: Charter the Team

Step 2: Build Pareto & Radar

Step 3: Understand Key Constraints

Step 4: Problem Solving Loop

Step 5: Implementation Plan

Step 6: Implement & Verify

Step 7: Reapplication Opportunities

Charter theTeam

UnderstandKey

Constraints

ProblemSolvingLoop

Implement-ationPlan

ImplementVerify & Sustain

Build Pareto & Radar

Re-ApplicationOpportunity

1 2 3 4 5 6 7

Ian

Majority of Sprint Team’s time is spent in this step

Sprint Team and the CI Model

Identification





Prioritization


ImprovementTools

ResourceManagement


KNOW THE PROCESS



Sprint Teams use the full Hershey Continuous

Improvement System Model

Identification





Prioritization


ImprovementTools

ResourceManagement


KNOW THE PROCESS



Clarify the process used •SIPOC, Process Maps, Value Stream Maps

Identify the key outputs for the process

•SIPOC, Constraint AnalysisApply the customer point of view of value to the process

•Zero-Based Analysis•Value added and non-value added

* Zero Based Analysis (ZBA) calculates the total opportunity in a perfect world (zero defects/

waste, zero efficiency loss, most optimum labor, etc.).


Identification





Prioritization


ImprovementTools

ResourceManagement


KNOW THE PROCESS



Identification & Prioritization

•Identify the main opportunities•Identify the key constraints•Use measurements, analysis and facts to drive decisions•Use of a formal prioritization tool (Radar) to focus on the highest value and lowest complexity opportunities first


Identification





Prioritization


ImprovementTools

ResourceManagement


KNOW THE PROCESS



Resource Management•Use Goals and Action Lists to drive results•Work only on the “pink” opportunities•Follow standard meeting agendas•Clear roadblocks

Tools/ Behaviors•Use the standard tools to make improvements•Live the Hershey Values (formally defined; heavily emphasized)•Practice improvement mindsets•Incorporate marathon (long-term improvement) behaviors into daily work


Identification





Prioritization


ImprovementTools

ResourceManagement


KNOW THE PROCESS



Quest for Perfection•Re-apply solutions to all applicable areas of the company.•Seek to break all constraints (eventually)


• Sprint Team Tools which support tie-in of Sprint Team with CI Model are shown in greater detail in the next slide.

• This is the recommended road-map when a Sprint Team is resourced to capitalize on an opportunity

• Consider this roadmap also as a principle which can be applied to even smaller problems on a daily basis

Have a problem? - Analyze the problem- Resource it- Improve/study- Put controls to sustain

Sprint Team Roadmap/ Timeline

The Sprint Team occurs in 7 phases

Sprint Team Structure

Sprint Team Structure

• Usually 4-8 members

• Usually full-time for 4-8 weeks

– Can be part-time for a longer period

• Initiated by a Steering Group

• Always has a sponsor representing the Steering Team

• Works on specific goal

Sprint Organization

Steering Team

Sprint Leader

Sponsor Facilitator

Sprint Team

Steering Team

• Usually a management group

– Sr. VP Staff

– Directors/Plant Managers Staff

– Managers/Business Unit Teams

• Owners of a radar of opportunities

– Opportunities driven by corporate goal or the key radar areas: People/Quality/Service/Cost

• Manage an overall improvement plan

• Empowers the Sprint Team to act

Sponsor

• Represents the Steering Team at the Sprint Team

• Helps set the goals and plans for the team

• Maintains controls to ensure team progress

• Makes some of the resource ($$$) decisions for the team

• Removes roadblocks

Sprint Team Facilitator

• Usually the CI Integration Manager or Plant Industrial Engineer

• CI Subject Matter Expert

– CI Tools

– Sprint Team “Super User”

• Aids/ coaches a Sprint Team Leader (but not full time)

Sprint Team Leader

• Functional leader of the team– Sets the daily and weekly direction of team

– Sets goals

– Gets assistance from support resources

• Holds team accountable to complete actions

• Communicates with affected groups

• Models Mindsets

Role of Sprint Team members at different stages of the Sprint Team process

Sprint Team Management

Time Management & Schedule

• At the beginning of each week confirm time allotted by each member of the team

• Post a team meeting schedule

• Follow the standard meeting plan if possible

• 20 minute daily startup meeting

• 30 minute daily wrap-up meeting

• 60 minute weekly review meeting

MEETING SCHEDULE

7am Daily: (20 min)�Clarify day’s actions

3pm Daily: (30 min)�Review metrics

�Review progress (action list)�Develop new actions

1pm Thursday: (1 hr Review)�Review metrics

�Review progress (weekly goals)�Discuss roadblocks�Develop goals for next week

MEETING SCHEDULE

7am Daily: (20 min)�Clarify day’s actions

3pm Daily: (30 min)�Review metrics

�Review progress (action list)�Develop new actions

1pm Thursday: (1 hr Review)�Review metrics

�Review progress (weekly goals)�Discuss roadblocks�Develop goals for next week

* A Sprint Team generally runs from 4-8 weeks

Share the workload

• Assign responsibilities to team members

– Update metrics

– Progress board

– Communication boards in work areas

– Action List

– etc

Set weekly goals

• Specific• Measureable• Achievable• Relevant• Time-Bound

Status Goal Owner

By end of week, build Pareto of wrapper downtime opportuntiy. Rachel

By end of week, prioritize all team opportunities on the team radar John

By end of week, understand top 3 constraints on Line 3 wrappers. Steve

Action Lists

• Review twice per day

• Clear unambiguous actions

• All actions are owned and have a date

• No assignments to the absent

• Complete on time

• Help team members who are late

Purpose:

•To launch the team for the day.

•Make sure everyone is clear about what to work on.

• This meeting should not become a long meeting for discussions.

Duration: 10-20 minutes

Agenda: Clarify the day’s actions

Morning Meeting

Evening Meeting

– Purpose:� The team will evaluate progress against goals and generate actions as required.

� Avoid problem-solving new issues in the meeting.

� Schedule another appointment with the required team-members when problem solving is required.

– Duration: 30 minutes

– Agenda: Review performance metricsReview progress (on the action list, and against weekly goals)- Action done: check off- Action not done: develop plan

to remove roadblockGenerate new actions

Weekly Review Meeting

– Purpose: � The team reviews its progress against the overall goals outlined in the project charter to ensure that it is on-track to meet them.

� Sponsor Alignment and preparation of any updates to the steering team.

– Duration: 1 hour, weekly

– Agenda: Review performance metricsReview progress (against weekly goals)- Goal achieved: check off- Goal not achieved: develop

plan to remove roadblockDiscuss any other roadblocksGenerate goals for the following week

Sponsor Stage Gate Review

Purpose: A Steering Team/Sponsor risk mitigation tool to promote alignment and remove team roadblocks.

1) Charter Stage Gate Review: to ensure that the Sprint team’s chartered objectives align with the organization’s strategic plan.

2) Opportunity Stage Gate Review: To ensure that the Sprint team is focusing on the highest value lowest complexity opportunities.

3) Implementation Plan Stage Gate Review:

• To analyze the costs/benefits of the proposed implementation plan

• ensure that all operational factors/risks have been taken into consideration.

• Agreement reached on how the proposed solution will be funded.

4) Process Control Plan Stage Gate Review: Toreview the efficacy of the team’s control plan to ensure future sustainment of improvements

Visual Record of Progress

• Keep metrics posted in room– Annotate the graphs with explanations

• Use flip charts on wall to record test plans and findings

– A visitor to the room (the sponsor) should be able to understand what the team is doing

Communicate outside of the team

• Post progress updates in area where work is being completed

– Metrics, Progress, Plans

– New learning

• Update to process owners, peers

– emails

– Meetings

• Steering Team

– Metrics, progress, roadblocks, plans

Sprint Teams Vs Kaizen Blitz Teams

Sprint Teams Vs Kaizen Blitz Teams

• Generally speaking, Kaizen Blitz teams are shorter duration (2-10 days) whereas our Sprint Teams are longer duration (4-8 weeks)

• Scope: – Kaizen Blitz…

• may focus on a very specific opportunity with a smaller scope due to limited time

• More pre-work completed before the team kicks off

– With a Sprint Team…• we are looking at attacking larger opportunities (reduce scrap at Line X, Improve efficiency of Line Y).

• Pre-work is done only to understand which large opportunity should be resourced with a Sprint Team

• the team itself collects data to prioritize multiple sub-opportunities within the target opportunity

Reese’s Pieces Sprint Team

Background

• Reese’s Pieces were first produced at Hershey’s Stuarts Draft, VA plant in 1982

• Product sales have grown to $87 MM as of 2009

• 24/7 operation

• Minimal advertising after the movie E.T.

*ET ate Reese’s Pieces candy in the movie ET: The Extra-Terrestrial. Sales went up 65% after the release of the movie. Source: Time Magazine, July 26, 1982

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Reese’s Pieces Production Process

• Moulding: Peanut Butter paste is molded into lentil-shaped pieces at low temperatures

• Lentils are made smoother and rounded, and then transported to Coating pans

• During the Coating process the lentils are coated with ingredients that make up Pieces’ outer shell.

• Next in Polishing, glaze is applied and the candy gets the shiny appearance

• The Candy is next packaged into bags of various sizes


Team’s Goals: • Improve Production Capacity of the Reese’s Pieces Operation by 10%

Why?• Additional capacity for future sales growth• Reduce Weekend Prod Days/ Overtime reduction• Reduce outsourcing of Reese’s Pieces from Hershey’s VA plant to Illinois plant (VA plant has the cost advantage)

Team Members• Sprint Team Leader (Reese’s Pieces Production Supervisor)• 3 Production Operators (1 from each shift)• 1 Maintenance Mechanic• Sprint Team facilitator (part-time)• Industrial Engineer (part-time)• R&D Scientist (part-time, not part of the initial team)

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When?Sprint Team Kicked off in March 2008; improvements fully in place by July, 2008.

Sprint Team Kickoff - Kick-off speech by Plant Manager (Sponsor), explaining the need for improvement

- Sprint Team leader explains high level process analysis and opportunities

- CI Facilitator trains the team members on the Sprint Team processes

- Introduction to SMED process, basic problem solving tools

- Message to the team: Challenge everything; no idea is a bad idea; use the Sprint processes to focus on the most important opportunities first; get all the help from Plant leadership to resolve issues unsolved before

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Sprint Team Key Actions

Capacity Improvement � Bottleneck Analysis:Bottleneck Step: Coating Operation –Pre-work was done to understand Theoretical Max output from each of the process steps

Team’s Largest Opportunity: Coating Process

• Multiple coatings of various ingredients with ‘standard’ time for each coating step

• Cleaning the Coating pans at a specific frequency resulted in Production Time losses

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0

1000

2000

3000

4000

5000

6000

7000

8000

Moulding Coating Polishing Bagging CasePackers

Bottleneck Analysis

Finished Product - Lbs/Hour

Theoretical

Actual (finished lbs/hour)

Coating Cycle Optimization

$Y

Cleaning

Time

$X

Reduction of Time between Coating

Rounds$Z

X

X

X

Coating process was the

Operation’s bottleneck

Prioritizing Opportunities within Coating on the basis of Value/ Complexity


• Challenged the sequence and duration of each coating sub-step

• Requested a Food Scientist from R&D to help optimize coating cycle

• With a low investment made equipment changes to increase Coating Pan speeds

–Increased speed allowed for faster turn around, spread, and dry times

–Modified the sequence/ frequency/ duration of syrup application steps

–Multiple tests were carried out by Plant QA and Corporate Product/Process Review Group and Sensory to make sure Quality was not compromised

–Actually, the appearance was improved from before due to optimized syrup application steps

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Next Opportunity in Coating: Time to Clean Coating Pans• Cleaning time was in high single digit % of Line’s available time

• Cleaned every coating pan after 10 rounds due to product build-up in fins of the pan

• Team had operators from all 3 shifts who helped with this Cleaning process

• Observed all 3 shifts; did time studies; created Spaghetti charts to track movement of operators during cleaning

• Used the SMED process to remove/shift unnecessary steps. Came up with the idea to use hot water for cleaning to reduce cleaning time (capital investment)

• Developed and implemented the best Cleaning process for all shifts

• Achieved 40% reduction in Cleaning time� Gained production capacity

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Next Opportunity: Bottleneck now moved to Moulding• Challenge: How to improve Moulding speed?

Team’s Key Actions• Use of 5 Whys to understand constraints limiting Moulding Speed

• Team found the correlation of Moulding Speed with Peanut Butter paste temperature

• Tried various options; but came up with a temporary solution to reduce temperature by reducing Pipe Jacket temperature

• Resulted in an increase in Moulding Speed by 14%

• A more permanent solution to control temperature was implemented later (capital project implemented in Dec 2008)

• Using a structured Problem Solving Process, team members concluded increasing Puddle size of Peanut Butter paste on the rollsets to reduce temperature while moulding faster

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Results

25000

27000

29000

31000

33000

35000

37000

39000

2007-Avg

2008-Jan

2008-Feb

2008-M

ar20

08-Apr

2008-M

ay20

08-Jun

2008-Jul

2008-Aug

2008-Sep

2008-O

ct20

08-Nov

2008-Dec

2009-Jan

2009-Feb

2009-M

ar20

09-Apr

2009-M

ay20

09-Jun

2009-Jul

2009-Aug

2009-Sep

2009-O

ct20

09-Nov

2009-Dec

Avg Lbs/Shift

Avg Monthly Output (Lbs/Shift)

Sprint Team Started

Most Sprint Team Improvements Implemented

New Output Standard Implemented

All Sprint Team Improvements Implemented

Reese’s Pieces Business Unit Team (BUT)Metrics Tracking

Coating Operations - Cleaning Time

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

Date-1 Date-2 Date-3 Date-4 Date-5 Date-6 Date-7 Date-8 Date-9 Date-10 Date-11

Hours

TARGET TIME

Time between Coating Rounds

0

5

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30

Date 1

Date2Date2Date2Date 3

Date 3

Date 3

Date 4

Date 4

Date 5

Date 5

Date 5

Date 6

Date 6

Date 6

Date 7

Date 7

Date 7

Date 8

Date 8

Time between Rounds

Target Time

This was ID’d as a complex opportunity needing capital investment that could not be justified. Sprint Team recommended tracking this metric to ensure variation was under control, and to increase awareness

about this metric

Time to clean Coating Pans was reduced by 40%. The BUT is tracking Cleaning Times to make sure improvements are

sustained.

What is a Business Unit Team?

At Hershey’s, for a Manufacturing operation, a Business Unit Team is a

team of Production, Maint, Quality and Engg resources that meets every 2

weeks to focus on long-term improvements for the Business Unit. A

Business Unit could be one line or a group of similar lines/operations.

BUTs also exist for Maintenance, Warehousing, Administration depts

Sprint Team Benefits

2009…• Mindset shift that improvement is possible

• Weekends off; more time for preventive maintenance

• Significant Dollar Savings due to reduced outsourcing to IL plant (reduced by 50% in 2009), and reduced Overtime at VA plant

• Increased theoretical capacity by 15%; committed to output increase of 10% in the financial output standards; delivered this goal throughout 2009.

2010…• Re-introducing Reese’s Pieces along with Hershey’s new product line-up Pieces (�); result is increased sales. Running again 7-day; and supporting increased sales.

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A very important goal of our Sprint Team efforts is to instill CI mindset in our

teammates and to encourage them to use it on a daily basis.

Why the Reese’s Pieces Sprint Team was Successful?

• Experience of Team Members with the Reese’s Pieces operation

• The team members had a very positive mindset and challenged the status quo.

• Acted on Team Members suggestions early on to bolster team’s confidence

• Requested a R&D Scientist who specializes in Panning; learning experience for team and the scientist

• There are only 5 operators in the moulding side of operation in each shift; easy to communicate changes, get buy-in, track performance

• Control plan for sustainment: On an ongoing basis, the operators are tracking: cleaning time, turn-around time – manually. The Reese’s Pieces Business Unit Team (BUT) looks at these metrics every 2 weeks during the BUT meeting.

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Closing Remarks

• An important goal of running Sprint Teams is training and introducing more Hershey’s teammates to the Mindset for Continuous Improvement, and influencing them to use CI principles/ tools on a daily basis

• Many Sprint Team leaders have become more successful in their roles as Production Supervisors and are constantly applying the Sprint mindset in daily process improvements; conversely successful Production Supervisors are effective Sprint Team leaders

• Sprint Team hourly members have got jobs with higher responsibilities or become part of multiple Sprint Teams (even in areas outside their own)

• Sprint Teams have challenged conventional wisdom on multiple opportunities throughout Hershey’s plants in North America

• Some Sprint Teams are more successful than others; but over time plants are learning how to make Sprint Teams more and more successful

• When Cross-functional resources come together remarkable results can be obtained– Success of Sprint Team concept has led to creation of more teams to drive process improvements– Sprint Teams are increasingly resourced to improve Safety and Quality, and not just waste/ efficiency opportunities– Recently, Sprint Teams have been implemented across multiple plants to improve OEE of Key Operations; a

Steering Committee at the Operations level oversees all these teams– Sprint Team concept (with members only working part-time for the team) is being applied to improve Inventory turns

in a separate initiative– Sprint Team concept is making Company Leaders confident that improvements can be achieved if a CFT is given an

opportunity to dedicate their time and energy on a specific goal

sprint team driven process improvement at the hershey …...hershey’s global operations vision *...

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