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Increasing productivity in the dairy sector

Source: Date:2010-06-22
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An Operational Cost Reduction progr amme helps a leading dairy to enhance competitiveness and profitability
WHEN Yasser Abdullah began his job as a shift supervisor for Saudi Arabia's leading dairy and food company, SADAFCO, 14 years ago, he focused solely on his own individual performance. Today, he better understands the role both he and his team play in the company's overall success; he often volunteers new ideas to improve the team's performance, and he has established a new network of colleagues all across the company. Mr Abdullah has also learned new trouble-shooting methods, which enable him to resolve problems faster and has enhanced his own personal communications and team leadership skills - all as part of the Tetra Pak Operational Cost Reduction (OCR) programme. The Tetra Pak OCR programme is a process that assists customers in analysing and reducing their overall costs and improving productivity. The programme was launched in 2007 to help its customers enhance their competitiveness and profitability through focused improvement in operational efficiency. This programme has helped SADAFCO (Saudia Dairy & Foodstuff Company) achieve machine up-time of 37.5 hours per week and reduce operational costs - whilst at the same time creating a more collaborative team culture for employees like Yasser Abdullah. Business challenge SADAFCO is the Saudi Arabian market leader in tomato paste and long life white milk. Established in 1976, the company now produces 49 per cent of all long life milk sold in the country. The company also sells flavoured milk, instant milk powder, drinks, ice cream and a variety of cheeses and snacks, all under the flagship Saudia brand - one of the oldest and most trusted brands in the Kingdom. In 2006, SADAFCO began a restructuring process to transform itself into a more consumer-focused, results-oriented company - a process that continues today as the company strives to meet the needs of increasingly demanding consumers. Saudi consumers demand food safety, quality, great taste, more variety and more innovative product offerings - all at a competitive price. At the same time, rising prices of key dairy ingredients, such as skim milk powder, have increased pressure on margins. To compete, manufacturers must find ways to become more efficient and productive. Solution In September 2007, SADAFCO was invited to participate in Tetra Pak's OCR programme, becoming the first Middle Eastern company to implement the initiative. Tetra Pak's OCR initiative is based on industry standards from World Class Manufacturing (WCM) and its relevant tools and methodologies. Originally derived from Japanese techniques, these tools and methodologies have been adapted for application to dairy as well as Juices, Nectars and Still Drinks plants that run Tetra Pak processing and filling lines. Tetra Pak's specific methodology, which is called 'Focused Improvement', involves focused activities to elevate the performance of a specific part of a plant with the objective of reducing operational costs, increasing production capacity and improving line performance. In the pilot phase of the SADAFCO OCR project, which the company conducted at its Jeddah factory, the dairy company's management team worked with Tetra Pak to conduct a detailed analysis of its operating costs. This included everything from labour costs to utilities' costs to the costs associated with packaging and product waste, service and spare parts. Based on this analysis, the company then identified key improvement areas and set targets for savings in each area. SADAFCO selected one line for improvement and trained and coached three teams in OCR focused improvement - Cleaning-in-Place, Filling and Distribution Equipment (DE). Over a period of eight months, they achieved the following savings: CIP team set-up time reduction: targeted 27 per cent and achieved 17Womens Running Shoes

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