APS1028:Operations&ProductionManagement

ANIDEALOPERATIONALFRAMEWORKFORTHEFOODMANUFACTURINGINDUSTRY

HatemElagouz

AyeshaShahzad

PreparedBy MariamOmar

VritaPatel

RadiaTasnim

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ExecutiveSummaryYoovitaisafamilyownedbusinessthatislookingtoenterthemarketforaffordablegroceriesthroughYoovi, anorganic, fruit-flavoreddrinkable yoghurtproduct. The recent trend towardsmorenutritious

food options combined with the numerous benefits of yoghurt make Yoovi’s market prospects veryattractive.Yoovita’smission statementhighlights thekeycharacteristicsofYoovita’sproducts,whichhave taken

the customer’s needs into consideration. The products will be affordable meaning low cost, highlynutritious, which means no additive and using organic ingredients and no preservatives, and lastly,highlyflavorful–meaningthatitalsotastesgood.Asitisafamilyownedbusiness,itsfuturestatevision

istobecomethenumberonedrinkableyoghurtinNorthAmerica.Yoovita is planning tobuild amanufacturing facility located inOntario, Canada. Inorder tobuild and

operate amanufacturing facility for this productionprocess, there aremanyoperational aspects thatrequire careful consideration, including planning and supply chain. There is a need for benchmarkingand analyzing the best practices of the already competitive fast moving consumer goods (FMCG)

industry. Inorder toachieve this,Unilever’splant inBramalea,OntarioandNestlé’splant inToronto,Ontariowereanalyzed. Theseplantswere chosenbecause theyareboth in theapproximate locationwhere Yoovita wants to build its facilities. This comprehensive analysis covered plant layout and

organization,endtoendoperations,safety,quality,production,maintenance,productionmaintenancedynamics,supplychain,financesandhumanresources.Itsaimistofindoutwhatwhichinitiativesaresuccessful and where gaps might still exist. The comparison would then be used to build an ideal

operationalcaseforYoovita. Nestle andUnilever are both considered giants in the food andbeverage industry. Thereweremanysimilaritiesintheiroperationalpracticesbutsomeglaringdifferenceswerenoticedinsomekeyaspects

whichweresafety,maintenanceandconcurrentengineering.The safety culture at Unilever was enforced through initiatives such as near miss reporting and the

safetybehaviorsobservationbasedonthesafetytriangle.Nestlehadimplementedthefriendshelpingfriendsprogramtoinduceachangeinthesafetybehavioroftheiremployees.Buttheimplementation

was fragmented,especiallyon theshop floor.Forany facility, safety shouldbea toppriorityand thiscomparativeanalysisshowshowitcanideallybeimplementedforYoovita.

Unilever performed both preventative and reactive maintenance. Their practices were based on theethosoftotalproductivemaintenance(TPM)whichwasenforcedbythetwelvepillarsofleanthinking,integratedwith a base of 5S. TPM also led Unilever to be able to identifywhere in their facility the

biggest losses were occurring. 12 step Kaizen events were then conducted in order to reduce theselosses.One thing to note is thatUnilever’smaintenance department’s softwaremanagement system

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wasnot integratedwiththeERPsystemusedbytherestoftheBramaleaplant.Nestlé’smaintenancephilosophy is still entrenched ina “fire-fighting”culture that largely focuseson reactivemaintenance,

ratherthanproactivemaintenance.NestlehasbeentryingtoimplementandconvertitsTorontoplantto TPM. However, there is no integration from the top-down and also from the bottom-up. TheirimplementationofsomeTPMtoolsareadisjointedeffort,atbest.There isneedforachange intheir

organizationalculture.Inmanufacturingfacilities,concurrentengineeringisveryimportant.Thesmoothdynamicsbetweenthe

production and themaintenance teams can ensure smoother plant operations. In both Unilever andNestle plants, a blame culture exists. There is a lack of cross-functional collaboration and instead ofworkingtoachievethecompanygoal,toomuchtimeisspentdiscussingdepartmentalgoals.Nestle is

alsofacingresistanceduetoalackofacceptanceinthechangeoftheirorganizationalstructure.Analyzing theoperational frameworksofNestle andUnilever allowedYoovita to identify the industry

bestpracticesandwheretheycouldimprove,inordertofillinthegaps.Withthisidealoperationalcaseinmind,Yoovitaisgoingtoproceedtowiththeconstructionofitsmanufacturingfacility.