29th May 2012, Fonterra and Hills Labratories

The 29th of May was a day of extremes in observing CI businesses and how they have implemented this management tool. Fonterra have been embedded in CI thinking for over 13 years and present a very disciplined, mature CI culture. Hills Laboratories introduced Labmax (Hills CI program) to the business in 2008 and have been concentrating on 5S and standard work during that period. Whilst both businesses are at varying maturity levels of CI adoption, both reported bottom line financial growth and improved engagement from employees.

The Fonterra business accounts for approximately 25% of the NZ GDP, they have 11,000 co-operative members (dairy farmers), over 16,000 staff global, a $20 billion turnover and manage over 2.1 million metric tonnes of milk, a very large organisation. The Fonterra Way (TFW) was first introduced 13 years ago and is now delivered by the Learning Team, based out of the Te Awamutu plant. 400 staff have been introduced to a number of CI tools, including TRACC management, problem solving methodolgy, learning with A3's, and one point lesson planning.

A component of understanding TFW, was observing the site stand up meeting, that is held daily at 10am. The structure and discipline of this meeting was something I had not seen previously. Within the space of 15 minutes the site manager was able to understand all business critical measures and performance from the across the plant. The Te Awamutu plant will process over 3 million litres of milk and relies on 300 staff to conduct themselves in a safe and effective manner. To understand how the 'job' is going within 15 minutes is really impressive.

Hill Laboratories have focused their efforts in imbedding a sustainable 5S and standard work practice ethos into their business. Under the stewardship of David Havard, ex Glaxo SmithKline 6 sigma practitioner, and Steve Howse GM of Hills, Labmax was born in 2008. Labmax is the Hills Laboratories CI program and has resulted in all departments across the country being trained in the above 2 tools.

The best example provided to us was a problem resolution exercise where Hills identified that over 60,000 repeat tests were being requested each year. The repeats (re-working) were costing the business over $300,000 in wasted opportunity or over resourcing. By redesigning work requests, refining calibration methods and improving ownership of the test process, these savings have been realised and surplus capacity has been used to add more value to the business.

Both business have highlighted to me the very basis of why CI is such a strong management tool. It has highlighted the power of waste identification, understanding the process flow and building sustainable work practices.

Location:Hamilton, NZ