Case Study – Flowers Owing to client confidentiality, the grower’s business cannot be named. However, this is a real case study from 2014. The case reflects ‘improvement activities’ following a number of Value Stream Mapping diagnostics at a provider of fresh cut flowers.

2

Background to the Business

The client is a provider of fresh cut flowers (bouquets) to major retailers and the challenge for them is to manage their business through rapid growth (from £10m to £60m) in an eight year period

Their primary challenge is their operating processes are no longer fit for purpose, and the need for proper infrastructure has put pressure on ‘costs’

They are also striving towards achievement of retail customer accreditation standards.

3

Highlights of Lean Improvement Activities

Focus is primarily on supplier compliance and quality, effective stock management to reduce ‘out of life’ product, and on pack-house efficiencies to enable an ever-stretching challenge of delivering peak volumes to be cost effective

Peaks are typically 400% higher production levels than normal working  - for example at Christmas, Valentine’s Day and Mother’s Day. 

To get to this point there have been several Value Stream Mapping (VSM) activities and rapid improvement workshops that are driving performance through the use of effective KPI’s and performance management, alongside robust problem-solving methodologies (Plan, Do, Check, Act, Root Cause Analysis, etc).

4

Actions Taken When setting up KPIs a number of supply

issues were identified, and reports were generated that help the team understand the challenges in supplier ordering profiles and stock management

Demand amplification was high and systems have been put in place that allow for level-loaded orders, leading to a significant reduction in demand amplification.  The team are striving to attain 80% stock dwell time from as low as 20%. After six weeks, progress is excellent – now running at 60% with a view to attaining 75%  by the 10 week period.

On some high-volume bouquet lines – product would be sat for up to 45 minutes before being put to water or into final packaging.  This resulted in damaged product, overheating, and line inefficiencies.  A single piece flow on the line has been introduced which now allows for a three minute process of make to box, which has increased productivity by up to 50% for some products

‘By putting in a robust project governance process alongside a sound management process around the KPIs has allowed the client and us to drive performance in the way we need it to’.

5

Benefits Delivered & Next StepsBenefits:PDCA is starting to become a way of lifeProblem-solving rather than firefightingRoot cause analysis Managing by fact not emotionsProduction are experiencing productivity savings of up to 35% on some lines – the challenge is now either filling the lines with new products or letting go of staff to allow the financial savings to be realisedBack office operations have allowed for release of staff (10%) to focus on necessary new processes / infrastructure rather than recruiting new staffWaste is projected to be down by 3% when the stock management project is at full speed (This will take two months)

Next Steps:•Started work on New Product Development (NPD) processes - currently the focus is all around ‘product’, but the team are starting to challenge whether new clients, packaging, assets etc. should become part of the ‘end to end’ process to allow for a wider breadth of offering. •Rolling out to the supply base forms part of the plan for 2015-16 along, with transferring knowledge to other parts of the business to embed learning across the business.

6

Benefits SummaryActivity Benefit Quantifiable

Measuring hourly outputs – management process

Understanding performance drives throughput/efficiency improvement. Issues and problems on the line are identified/resolved in real time

Creates visibility of work and early release of staff

Mon – Wed – Potential 8 ops x 3 hours x 3 days x £9.70 x 48 weeks = £33.5k

Dedicated line feeder Ensures bouquet makers are at their benches maximising production times and changeovers are reduced from 5-10 minutes to 1-2 minutes (3 hours per day)

Approximately 25% line efficiency (Capacity creation)

Maximum 30 bouquets on line Batch and queue is removed, value add moments are closer allowing line to be more effective

Operations are balanced Creates flow, eliminates waiting time, increases efficiency

Additional line efficiency (Capacity creation)

Clear, standardised plan No waiting for product. Everyone is clear on what is required/to be achieved

Standardised manning levels – 15 operators = 1 line feeder on line

Standardised manning ensures products are made to cost

Potential for £3,500+ contribution weeks vs £400 = approx£150k+