Lean Meat

Why ‘Lean’ meat production means healthy results at newly consolidated KR Castlemaine. How Lauras International, described as being “ great for our company”, helped increase output by introducing new performance systems which are still in place today.

Successful Australian small goods company KR Castlemaine consolidated its operations entirely in the central Victorian town earlier this year.

It is renowned for manufacturing high-quality sliced and bulk ham, bacon, salami and sausages and a range of low fat shaved and sliced meats used in healthy nutritional lunches available throughout the country’s schools.

The firm’s decision to close the Toowoomba site (the town’s Darling Downs Bacon (DDB) co-operative and Castlemaine Bacon Company merged in 2003) and concentrate all operations at the Castlemaine site from which it takes its name was made late last year following a business review. The business review decision was taken independently from any ongoing improvement activities.

Lauras International was engaged to assist this transition following on from the improvement system introduction by Lauras International at both sites early last year and production manager Lesley Kercheval, says : “Lauras were great for our company.”

A 40% output increase on the ham processing line and a 30% increase on a bacon line is a shared success story both for management at KR Castlemaine and Lauras improvements consultants who implemented the tools and strategies which facilitated the impressive results.

Australia based Lauras consultant Shan Shanmugathasan has every confidence that the improvements to both manufacturing and the overall work ethos will be sustained.

“There is a good work culture among the employees and Lauras is currently building a capacity constraint model for them. Improvements will continue.”

Project leader Shan has seen many positive changes at KR Castlemaine since he was first contacted in August 2005 during the firm’s centenary year - a time for reflection and optimism for the future of the business. Management wanted to build upon existing strengths and, with advice from Lauras, pinpoint key areas for improvement.

KR Castlemaine’s Chief Financial Officer Peter Barnett says the firm called Lauras in “because our mission is to be the number one small goods firm in Australia and we needed to have effective and efficient operating processes on the floor”.

He adds: “Because we were a new management team we wanted to have an overview of where we were at and how to increase efficiency.”

After an assessment, the first Improvement Workshop was introduced by Lauras in January 2006.

Shan explains: “We were asked to identify where improvements could be made on the ham processing line. There were major losses. There was a big demand for smaller portions and the output of the line was down. We needed to look at solving capacity constraints.

“To start with there were no key performance indicators or manufacturing performance measuring systems. To ensure focus was placed on the main areas of loss, we introduced a measuring system in the manufacturing process” explains Shan.

Lauras introduced de-bottlenecking analysis and applied some of its continuous improvement tools - Problem Cause Solution (PCS) and Cycle Time Reduction (CTR) - with the aim of improving iterative processes by reducing set times for certain aspects of production.

Skills were transferred to other work-force members via ‘Improvement Champion’ Alex Archipow.

“Alex utilised all the techniques in the Improvement Workshop and introduced end-of-the line communication boards showing hourly, daily and weekly improvements,” says Shan.

Within just five weeks of the workshop changes being embedded within the very core of the company’s day-to-day operations, there was a 40% output increase on the ham processing line.

In March 2006, Lauras moved to the bacon processing line and implemented a de-bottlenecking process and looked at ways to improve the work ethos.

Shan says: “We trained frontline managers, mainly in communication and leadership skills and transferred other skills via the Improvement Champion. Promoting teamwork was very important.”

A second Improvement Workshop, on a bacon line, resulted in a 30% improvement within a five week period.

Lesley Kercheval, KR Castlemaine’s production manager for Castlemaine, says: “When Lauras came we had very few systems in place. Lauras showed us how to deal with de-bottlenecking, sorting out the machines and setting up manufacturing performance review systems, how to organise people, and entering data to see the outcome. Lauras got involved with a lot of staff training, particularly motivational training to see how we could get the best out of people.”

“Before Lauras came we were a family run company and things had been done the same way for a hundred years. There was a lot of apprehension but the Lauras team had such a great way with people they won us over. People took to them. Lauras was great for our company and a lot of the systems they introduced are still in place.”

Shan, in particular, had extremely good people skills and was very knowledgeable. Shan was responsible for showing people how to work as a team.

“Motivation is still high. Shan won us over and everyone respected him. Alex was trained to pass on his skills. We still phone Shan whenever we need advice about a particular problem.”

After the second Improvement Workshop, Lauras moved to the Toowoomba site to embed a similar improvements system. There was a smaller percentage improvement (15-20%) as the site already had systems in place and improvement was being initiated solely by management.

When Lauras arrived, on site improvements “changed up a gear” and the skills transferred into the workforce resulted in rapid improvement. There was a better workforce morale and understanding of how performance targets could be achieved.

Peter Barnett comments: “It must be said that the concept of change management which Lauras were asked to bring in was a very big ‘ask’. Their work on the floor was very beneficial to change management. Lauras try to problem solve by using the work-force. This has to be done tactfully. They achieved it. They had the respect of the people on the floor and the management which is a major credit.”

Lauras managing director Steve Roger says: “KR Castlemaine knew of Lauras’ reputation for sustainable im-provements and called us in to help with site improvements. As a business, our key approach is to provide sub-stantial value to our clients by delivering significant improvements. Our structured approach ensured initial im-provements resulted in sustained continuous improvement.”

“The leadership team at KR Castlemaine were fully committed to the programme and this was a key factor in achieving the levels of success.”

Steve adds that as Lauras is a global firm, with offices in the UK, North America, Australia, Canada and China, it has gained an invaluable insight into the particular improvement systems required by many businesses worldwide.

“In the different countries, industries and sectors in which we operate, we continually find opportunities to help clients to make sustainable improvements.”

KR Castlemaine’s success is not solely due to an investment in world class processing and packaging equipment and a quality end product. The historic small goods firm demonstrates how embedding the correct improvements system can increase output, and how a motivated workforce can seize new challenges and business opportunities to benefit the future of the company - and their future roles within it.