Transforming the manufacturing department of centrale laitière into a business partner by achieving operational excellence

1. EHTP | MBA XIII |
Prepared by: Mohammed Marzak
Supervised by: Professor Stuart Chambers
Transforming the manufacturing department of
Centrale Laitière into a business partner by
achieving operational excellence
JUNE 2013

2. 1
The project is organized in five parts
Definition, theory and benchmark of Operational
Excellence
Centrale Laitière Diagnosis and the need of
transformation in the manufacturing department
Change management
Results obtained & conclusion
Implementation of operational excellence in the
manufacturing department

3. Centrale Laitière
 Centrale Laitière (CL) is the pioneer of the milk industry in Morocco with a market share
of 60%.
 The company employs 3000 employees and generates a net revenue of € 550 million.
 The manufacturing department has 1500 employees and operates four production sites
2

4. After a steady growth in a dynamic market, the
performance of Centrale Laitière started to decline in 2010
3
Evolution of operating margin of Centrale Laitière

5. The management conducted analysis that revealed many
externals changes and Weaknesses
4
Strenghts
• Strong brand with well recognized equity
• Blockbusters and value-added products with high
margin (Activia, Yawmi, Raibi Jamila, Danino…)
• High quality of products
• Capacity of daily distribution in more than 60000
outlets
• High technical expertise
• Social dialogue with the establishment of an inter-
unions charter
Opportunities
• Raising awareness and demand of healthy products
as yogurt
• Access to rural regions
• More synergy with Danone
• Leverage operation Excellence
Weaknesses
• High cost of manufacturing and distribution
• Many products with low margin (Milk, Lben, Moufid…)
• Supply and demand imbalances,
• High level of fixed costs and overheads
• Slow rate of innovation versus competitors
• High bureaucracy, slow to move
Threats
• Rising milk and raw material prices
• Intensive competition
• Hard economic conditions caused by the global
economic crises
• High level of temporary workers (interim) creating a
social issue

6. New Centrale Laitière Strategy : TRANSFORM 2015
 To regain its leadership in the Morocco dairy market and to improve its
performance, the management of Centrale Laitière decided to launch a new
strategy called Transform 2015
5
1 Conviction 1 Mission
Yoghurt is essential
3 Strategic Choices 5 Priorties
ONE TEAM
Bottom Line - Operational Excellene
TOP LINE growth1
2
3

7. 6
Technical
department focusing
only on fire fighting
Business partner
leveraging operational
excellence and creating
value
Professional project : Transforming the manufacturing
department
 In coherence with the global strategy, we decided to launch a
transformation in the manufacturing department
Current situation Target situation

8. POWERFUL TEAMSPOWERFUL TEAMSEmpowerd and motivated teams
SQCDMESUPERIOR RESULTSSUPERIOR RESULTS
PerformancePerformance
ManagementManagement
OrganisationalOrganisational
EfficiencyEfficiency
ProximityProximity
LeadershipLeadership
SQCDMESUPERIOR RESULTS
PerformancePerformance
ManagementManagement
PerformancePerformance
ManagementManagement
Performance
Management
OrganisationalOrganisational
EfficiencyEfficiency
OrganisationalOrganisational
EfficiencyEfficiency
Organisational
Efficiency
ProximityProximity
LeadershipLeadership
ProximityProximity
LeadershipLeadership
ProximityProximity
LeadershipLeadership
PERFORMANCE MANAGEMENT
IMPROVEMENT Tools, methods
and standards ( Top meeting,
Gemba Walk, reporting…)
Kaizen
ORGANISATIONAL EFFICIENCY
 Flat organization with Cell
structure=> Improvement of
communication, sense of
ownership and motivation
PROXIMITY LEADERSHIP
 LEADERS Development
 ONE TEAM =>TEAMS
Growth => Collective
performance
Professional project : Transforming the manufacturing department
 The program of operational excellence is based mainly on three majors
pillars:

9. 8
• Principle of 100% owner : Each cell has a person (Cell manager) in charge of objectives
• Simplification of the structure (Only 3 hierarchy levels instead of 5) => Motivation and
Empowerment
• Improvement of coordination between conditioning – Process – Quality and maintenance
• The cells have optimized size (number of lines <=4 , staff managed by the cell manger don’t
exceed 30 people)
Production manger
Cell manager 1 Cell manager 2 Cell manager 3
Operator Leader
Advantages of cell structure
Traditional structure Cell structure
Production manager
Conditioning manager Process manager
Foremen
Team leaders
Operators
Foremen
Teams leaders
Operators
Functional Quality and
maintenance resources
Coordinator/perf manger of cell
The cell structure was the cornestone of this transformation

10. 4 main tools were chosen to drive the cell organization
and ensure a correct implementation
TOP meetings
Plan tour (VTT)
Problem solving Groups
Safety dialogues
Groupe de Progrès
Diagramme Causes / Effet
Remplir le document à la main sur le terrain.
Causes
Effet : décrire le problème
Partir du problème. Poser la question « pourquoi » 5 fois jusqu’à trouver la cause racine
Périmètre :
Plan d’action
Remplir le document à lamain sur le terrain.
Chantier :
Date
du
constat
Problème
Des faits concrets, mesurés.
Tirer un trait sous la dernière cause
Cause
Un problème peut avoir plusieurs causes.
Tirer un trait sous chaque cause.
Solution / Action
Concret et précis.
Une seule action par case et un seul pilote.
Pilote de l’action
Date prévue pour Do
Date constatée du Do
M = maintenant
P
D
A
C
page:
P é r i m è t r e :
P l a n d ’ a c t i o n
R e m p l i r l e d o c u m e n t à l a m a i n s u r l e t e r r a i n .
C h a n t i e r :

11. 18 juin 201610
Some visuals illustrating TOP meetings
Action plan
Table of performance
indicators ( SQCDMN)
Table of 3P ( Presence,
Punctuality & Performance)

12. Plant Tour Gemba walk plan
14
2
4
8
3*
5
6
7*
9*
10
11
13
15
7*
16
18
19
20
21
Contrôle propreté zone
déchets
23
12*
17*
D
22
1
Occasion to practice MBWA ( Management by
Walking around)
Very formalized plan with check list
Cover the entire factory
Reduce the variability with systematic
monitoring
After Gemba walk, employees should
provide feedback in the form of a grade
explaining if they like or not the tour
Objectives

13. Elimination of wastes
 We conducted many studies and action about wastes ( products,
unnecessary movement, space…) and managed to reduce them by
almost 50%
12
Operator’s movement / shift = 14 km !
Added
Value / shift
10 %
Experiment carried out with the use a
Cardio frequency meter
Example of operator movement in line during a shift of 8 hours

14. We conducted a change management program based on
communication, training and team building sessionsOral
•Meeting with
factory managers
and staff
representatives
•Kick-off meeting
outside the factory
•Ceremony & review
after 3 months
Written
•Posters
•Special edition
of the internal
newsletter
Other
•Intranet
•CEO speech about
the change
•Film about the
implementation in
Salé
•Logos, Caps, Tee-
shirts…
Problem solving (2 days)
Need of change / discover other ways of
working in operations (2 days)
Non-hierarchical management (2 days)Maintenance (2 days)
Communication plan
Training of leaders
Paint-ball
Beach-
volley
Team building session

15. The project Motto : own your performance with the
CAP project
CAP : Cellules Autonomes de Production

16. 18/06/2016
Rituals poster : Improve your performance with new rituals

17. 16
1.80 m
2.20 m
2.45 m
1.20 m
We carried one day convention par site
19291900 1960 1990
Theme of the convention
How to reach a new level of performance with an
innovative organization and new methods ?
Back first
The roller
scissors
Feet first

18. 17

19. 18

20. 19

21. 20
0,0
5,0
10,0
15,0
20,0
25,0
2009 2010 2011 2012
Accidents Frequency Rate (Number accident/ 1 million hour)
Safety
Reduction of accidents
frequency from 22 in
2009 to 5,8 in 2012
82%
84%
86%
88%
90%
92%
94%
96%
98%
100%
2009 2010 2011 2012
Quality Conformity
0,0
100,0
200,0
300,0
400,0
500,0
600,0
2009 2010 2011 2012
Labor productivity (Tons/Full Time Equivalent)
*
Quality
Improvement of quality
conformity from 88% in
2009 to 98% in 2012
*
Cost
Improvement of labor
Productivity by 38%
We achieved very interesting results (1/2)

22. 21
Delivery
Improvement of
operational efficiency
from 68% in 2009 to 77%
in 2012.
*
Mobilization
Improvement of training
hours by more than
300%
*
Nature
Reduction of water and
energy consumption
We achieved very interesting results (2/2)
62,0%
64,0%
66,0%
68,0%
70,0%
72,0%
74,0%
76,0%
78,0%
2009 2010 2011 2012
% Operational Efficiency (OE)
0,0
5,0
10,0
15,0
20,0
25,0
30,0
2009 2010 2011 2012
Training Hours/employee
200,0
205,0
210,0
215,0
220,0
225,0
230,0
235,0
240,0
245,0
2009 2010 2011 2012
Energy Ratios (Total kWheq/Ton)

23. Social Responsability
 This program of operational excellence has a
major Corporate Social Responsibility (CSR)
contribution, in particular, in terms of:
• Reinforcing the social mission of the company of bringing
health through food to the largest number of people
• Improving the safety of employees, empowering them and
boosting their motivation
• Helping the government promoting operational excellence
in Morocco.
22
Tunisia
Algeria
Egypt
MoroccoAlgeria
Article in the l’ECONOMISTE
newspaper

24. How the MBA helped me in this project ?
 I used materials from many courses
• Operations
• Supply chain
• Strategic management
• Understanding organization
• Change management
• Negotiation
• Human resources
• …
 Have big picture of situations and business
• => helped me to position the manufacturing department as a business
partner creating value and non only as a technical department
 Improve my capacity to mobilize and empower teams
 Constructive negotiation
23