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PRATIQUES LEAN ET SIX SIGMA - LEAN SIGMA IN FOOD PROCESSING

LEAN SIGMA IN FOOD PROCESSING EN

Lean Sigma implementation scheme in the food industry business.

The steps of the implementation scheme are NUMERAL ADVANCE know-how.


                   


1) Business objectives for quality in food industry :

The objectives are to develop brands for the different product lines and to open new markets, especially for export (European Union, ASEAN, ALENA…).

In building a relation with its market and its consumers, the brand will use some quality criteria.


Food quality criteria :

Quality criteria are what consumers are expecting…as well as what the public authorities are controlling. In fact, the food quality criteria have different levels of compliance, from mandatory for safety reasons to “good to have” for comfort reasons. The consumer is looking for a variety of food, some pleasant tastes and convenient to prepare (comfort criteria), but most of all, not to have is health damaged (safety criteria).

The generic quality criteria classification of food industry is:

Quality criteria classification in food industry

 

 

   Criteria

Description

  1 

  Safety/ Reliability

Food for human consumption has to be safe for the health.

  2   Compliance Product and food processing must comply to the national food laws

  3

  Product mensuration

Food industries have to deliver food packaging respecting the announced measures such as weight, size, trace element composition, fat content…

  4

  Product nutritive quality

Processed food must be delivered with its original vitamins, proteins, trace elements and all other components for a balanced diet.

  5

  Appetizing product

Smell, colours and texture have to be attractive and compliant to the local usage.

  6

  Ease of used and packaging

Ease of use is going from cooking information, prepared food to manageable packages.

  7

  Product information

All legal and practical information on the product must be available (on the package, website…)

  8

  Processed in respect of SRE

All precaution for environment protection and waste management are taken during processing and for the raw material.

A brand has to fulfil criteria 1, 2, part of 6 and 7 for legal reasons. But the brand can also use these criteria and the “comfort” criteria for competitive purpose. A quality criteria is used for product differentiation.


Business plan for quality criteria :

Quality criteria are linked to the business by the fact that consumers will pay for it as long as they think the criteria bring them some value. Good taste, easy preparation, full of vitamins and environment protection are values that the consumer is ready to pay for.

So, as for any business objective, quality criteria must be selected on the cost/revenue principle. This is building the business plan of the mandatory and the “comfort” criteria in accordance with the marketing plan.

If the business analysis shows no revenue with the mandatory criteria, then it is best to drop the product line.


2) Laws if food industry :

Food industry is a business dealing with safety and health of human being. Public authorities are supervising that all professional are able to assure and maintain food safety for the consumers.


Texts laws :

Professionals of food industries have the responsibility to deliver safe food. Public authorities have the responsibility to assure that professionals are qualified to deliver safe food. To reach this objective, laws and standards on food safety are used.

European level :

The European Union main food safety law is CE 178/2002 applicable from the 1th of January 2005 (General principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in the matter of food safety).

Then it was complete with the laws EC 852/2004, 853/2004 and 854 / 2004.

This whole package is called the Hygiene Package.

Then each country is organising its implementation with local law text.

European country level:

Each European country is adapting to its national regulation system the European text. In France, it is the “arrêté” 8 Juin 2006” modified by the “arrête”  of  27 april, 5 June 2007 and 8 June 2008.

Examples of world region food laws:

  • Farm Bill Act for the USA
  • Japan Food Sanitation Law of April 2006.
  • Chinese Food Safety Law of 1th June 2009 with three certificates :
    • Food distribution certificate,
    • Catering service certificate,
    • Food production certificate.

Getting the food licence :

Once the rules are described in the country text law, each food business operator must be certified for the food licence. Only public authorities can deliver and maintain a food licence and each country has its own organization do deliver such certificates.

Doing business in the food industry is starting to get a food licence. The costs of managing this licence have to be integrated in the quality business plan, at the stage of the compliance criteria.


3) Quality organization :

In order to deploy the regulation requirements, food processing companies are using standards and certification.

It is important to notice that being certified will not grant for having the legal acceptance but, of course, it will be of a big help (less controls from the public authorities).


Processes and standards :

In order to act on its operations, food processing company deploy processes and procedures. In the food business, processes are aim for production, supplying, delivering and controlling.

The main standards of processes for food industries are :

  • Hygiene Good Practices (HGP) are promoted by each food channel (milk, meat, backery…).
  • HACCP is described in the Codex Alimentarius and formalized in the European law CE 852/2004.
  • Traceability is described in ISO 22005.
  • Environment protection is detailed in ISO 14001.
  • ISO 22000 is taking the ISO 9001 architecture and practices including the combination of :
    • HGP,
    • HACCP,
    • Traceability.

So being certified ISO 22000 and ISO 14001 is the best way for obtaining a food licence.


Costs of organization :

The quality organization involves people, process and infrastructure. All this implies costs that can be expressed as a percentage of total cost or total revenue. The quality business plan must include all these costs.


Value of organization :

The revenues of a quality management system are created from the sales increases due to customer satisfaction. Customer satisfaction is the result of delivering to the level of quality expected for each criterion.

As a result, value of the quality organization is the difference between the revenues and the costs. The management of this value (how to create it, how to develop it…) has to be included in the quality business plan.


4) Lean Sigma in the food industry :

If the origin of Lean Sigma is with the mechanical and high tech industries, some important food processing companies have successfully been using Lean Sigma method for several years to improve their performance, mainly in the area of packaging and supply chain.

Lean Sigma is the most efficient method in managing the quality criteria in accordance with the business objectives. Indeed, Lean Sigma is an improvement method and each main food standards such as HACCP, ISO 9001, ISO 22000, ISO 14001 can benefit from this continuous improvement activity. From this starting point, it is easy to “plug-in” a Lean Sigma approach into the different QMS. The processes and the procedures stated in the QMS and controlled by the public authorities to grant the food licence will not be changed. Business improvement can start with this initial scheme.


Lean method :

Lean method has for objective to reach optimum efficiency in the production and logistic areas. Its three main business criteria are:

  • time delivery,
  • amount of stock and work-in-progress,
  • cash flow in production and stock.

In the food processing, Lean management system will be often integrated with the traceability management system.


Six Sigma method :

Six Sigma method has for objective to reach the right level of quality. The market has expectations about quality criteria such as reliability, ease of use, availability, flexibility… With Six Sigma, the business metric of quality is unique and universal: DPMO (Defect Per Million of Opportunity against market expectations).

In the food processing industry, the main quality criteria are:

   Quality criteria

 

   Examples of Defect

  Safety / reliability

  Salmonella, Trichinella

  Compliance

  Missing information on label

  Product size

  140 instead of 150 gram of beef in the barbecue recipe

  Attractiveness

  Bad looking colour of the food – “Artificial” colour of the food

  Nutrition

  Over cooked food “killing” the vitamins – No oligo – Poor rate of fiber

  Ease of use

  No recipe on the package or winter recipe in summer time

  Availability

  No stock on the retailer shelf spaces during a promotion campaign

  Environmental harmony

  Polluted water from production unit not being reprocessed

Combining Lean and Six Sigma will lead to quick delivery and low cash-flow with no defect.


Benchmark for quality :

One of the advantages of the Six Sigma universal scoring (DPMO) is to easily benchmark performance levels against competition. NUMERAL ADVANCE,in parallel of its participation in the ISO working group on Six Sigma, has built several benchmarks on all industries containing about 150 companies around the world. The food processing sector is represented by about 15 companies, mainly located in Europe.

Quality level per sector for the period from 2005 to 2009

 

 

Channel stage

 

   Sector

Supplier

Producer

Retailer

  Food processing

 

*

*

  Chemical & Pharma

*

Medium/High

 

  Mechanical

*

 

 

  Electronic

*

*

 

  Infra & building

*

*

 

  Energy

 

*

 

  Automobile

Low

*

Medium

  Aerospace

 

*

 

  Banking & insurance

 

*

 

  Finance

 

*

 

  Telecom & media

 

*

 

  IT services

 

Medium/High

 

  Retail and service

 

 

*

  Administration

 

*

 

* complete levels are given during the diagnostic phase.

Low

Medium

High

Very High

2,78< Sigma < 3,82

3,82 < Sigma < 4,59

4,59 < Sigma < 5,22

Sigma < 5,22

Sigma level

Defects per million of opportunities

3

66 807 

4

6 210 

5

233 

6

3,4 

Benchmark results from the food industry sample of NUMERAL ADVANCE will be used in the diagnostic phase (See 5. “Deployment of Lean Sigma with NUMERAL ADVANCE”).

         


Business improvement with Lean Sigma :

Lean and Six Sigma are quantitative methods (statistical and analytical) for tracking defects and optimizing workflow.

The business improvements that Lean Sigma will bring are:

  • to focus on quality criteria expected from the market,
  • to benchmark its quality and efficiency level and to compare it with the European level,
  • to link financial and operational objectives through the quality criteria,
  • to use the future Lean Sigma ISO standard (ISO 13053).

Experiences of using Lean Sigma as an improvement method have demonstrated decrease in general costs from 25 to 40% without new investment.


5) Deployment of Lean Sigma with NUMERAL ADVANCE :

The Lean Sigma programme will be introduced in four steps:


Diagnostic and benchmark :

This first step is to evaluate the quality level (Six Sigma) and the efficiency (Lean) of your organisation focused on the selected criteria. This diagnostic will include a benchmark on quality and efficiency. It will also include a benchmark with the European Union laws on food safety, in order to prepare your organization for this market.

  1. The first step is to settle the most competitive criteria of the organisation.
  2. Then, market prices are collected in order to establish the Quality/Price benchmark on those criteria.
  3. Then, a second benchmark is processed for the costs of quality to fulfill those criteria.

NUMERAL ADVANCE can supply benchmarks for the major geographical regions around the world (Americas, Europe, Africa, Asia) and the main European countries.

So NUMERAL ADVANCE proposes:

  • selection of the criteria,
  • evaluation of the company quality level on the different criteria,
  • benchmark with the market levels (markets expectations),
  • benchmark of the costs of Quality Management System (QMS),
  • diagnostic comments.

See details for criteria and business


Entering new markets with Lean Sigma :

The resulting numbers form the previous benchmarks will fuel the plan to open new markets. Indeed, knowing the type of criteria and the level of quality that are expected, it is easier to build a business plan that will take advantage of the strong points (nature origin, traditional recipe, bio practices, high concentration of vitamins, unique taste, cooking method…) and turn them into revenues.

This quality business plan shall be build on the principles of Lean Sigma method : business objectives, quality contribution to business, team organisation, sponsorship, monitoring and corrective actions…

At a global level, criteria and their quality level are different from one region to the other (Americas, Europe, Asia…). The business plan will include a step by step approach starting with the markets that give quick results and preparing for the long term markets.

So NUMERAL ADVANCE proposes:

  • selection of markets from the previously selected criteria,
  • food regulation requirements costs analysis on these markets,
  • financial figures from Lean Sigma to build the quality business plan (costs of QMS in its life cycle),
  • implementation of the quality business plan in accordance with the general marketing plan.

Lean Sigma implementation :

This step is to deploy the Lean Sigma practices and procedures designed to reach the business objectives. These practices and procedures will be integrated into the existing QMS (ISO 9001, HACCP, ISO 14001 ISO 22000…).


Training and coaching Lean Sigma procedures :

The personnel will be trained and coached for the Lean Sigma practices and procedures that were previously implemented.


Prices and practical informations :

Prices

Diagnostic starting at 840 EHT

For a diagnostic and a preparation plan for Lean Sigma deployement, contact : numeraladvance@gmail.com

         


6) Food industries references of NUMERAL ADVANCE :

  • Kelloggs (Six Sigma on packaging),
  • Britvic Soft Drink (Six Sigma on packaging and logistic),
  • Mars (Six Sigma on packaging),
  • Twining (Lean and Six Sigma on conditioning and packaging),
  • Virgin Drink (Lean in logistic),
  • Socopa (Meat processing, Traceability and Lean Management),
  • Fleury Michon (Six Sigma diagnostic through Consumer Help Desk),
  • Euroserum (Entremont) (milk processing, traceability and Six Sigma management),
  • Hero France (canning industry, traceability and Lean Management),
  • Coop de France (Agriculture whosaler, Lean management),
  • Rungis fishery (Quality management and Lean management).