49309 Quality Planning and Analysis

Guest Lecture

Tim Norris, UTS, 29 May 2008

 AGENDA
• What is Six Sigma?
• SunRice Direction
• Training Completed
• C03 Pilot Projects
• C04 Projects
• C05 Projects
• C06 Projects
• Direction in C07
• C08 Projects
• Critical Principles for Success
 SUNRICE
• Ricegrowers’ Cooperative
• Approx. 2,000 rice grower members
• Based in the Riverina
• Australia’s largest exporter of processed
branded food products
• Business - 80% export - 20% domestic
• SunRice is the flagship brand
• Brands strong in Asia, Pacific, Middle East,
NZ and Australia
• $750M turnover
• 1000 employees
SUNRICE

Version: A2006
WHAT IS SIX SIGMA?
 Strategic Deployment Plan
Annual Six Sigma
goals projects
Strategic
goals
Key
strategy

Vision
Key
strategy

5 years 1 year
Time
Source: Juran Institute
 Infrastructure

Executive Champion

Champion
Master
Black
Belt
Black Belt

Green Belt
 Six Sigma Projects
Define Identification of customers and their expectations;
Comparison with business goals; Project selection.

Business process analysis; Benchmarking;

Measure
Definition of improvement targets.

Evaluation of process parameters (Risk analysis);

Analyse Identification of optimum conditions for
improvement.

Improve Verification of changed (improved) conditions.

Control Monitoring and maintaining improved conditions.

 Six Sigma Projects
(VOC)
The Voice of the Customer
(VOB)
Strategic analysis The Voice of
Define the Business
Phase
Critical-To-Business (CTB)

Project Definition

(VOP)
Measure The Voice of the Process
&
Analyse
Vital Fews

Improve Optimisation
&
Control Monitoring
 CEO’s Cause and Effect (CE) Chart
Riverina CopRice Global Supply Chain Trukai

Coleambally Supply SC to PNG Plant Capability

Chain

Deniliquin Leeton Asian SC Strategy

to Aust/NZ Development
Leeton Tongala Shipping Material Production
Business
Planning
Services
Cobden Quality Claims Synergie
Supply
sOH&S
Chain Quality
Paddy Commercial Engineering
Present Procurement
Future
Supply
C04 Chain
C05 Beyond
Supply
Manufacturing Plant Chain Global Footprint
COGS Efficiency Synergies
Market Direction Plant Operational Supply Option
Flexibility Efficiencies Business Spot Vs
Supply
Services Contract US
Chain Future Synergies JV Synergies
Synergies Capability OH&S with USA
with Riviana Quality
Market Direction Engineering
Procurement
Supply
Chain

Type here
SRFG Rice Cakes Riviana Global Strategy
SUNRICE DIRECTION
WHY SIX SIGMA?
 SunRice Funnel
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Comm older
unity r eh
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Cu o r yee
sto rp Su o
ppl pl
me
rs Co iers E m
Business level

Operational level

Process level

Pr
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ec

oj
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je ec Pr o
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 Communication Strategy
• Letter from CEO to all pilot project team members
• SunRice Six Sigma logo
• Roadmap poster
• SunRice Six Sigma article in “In Focus”
• CEO roadshow includes slides on SunRice Six Sigma
• SunRice Six Sigma video
• Toolbox template & guideline documents
• Desk top flip charts
• SunRice Six Sigma Website
• Latest news
• Guideline document
• Forms
• Project material
• Official CMT launch in February C03
• Site launch presentations in April C03
TRAINING COMPLETED
 Project Skills
• Training Program
• 220 trained personnel by March 2007
• 50 in C03
• 120 in C04
• 20 in C05
• 30 in C06
• Current Skills
• 30 Champions
• 54 Black Belts
• 136 Green Belts
• Statistical experts on all key sites
C03 PILOT PROJECTS
 C03 Pilot Projects
• Paddy Drying Project
• Reduce drying moisture losses – 300K
• Milling Yield Project
• Recover whole grain from hull stream –
250K
• Packaging Improvement Project
• Use more effective packaging material –
300K
• Supply Chain Claims Project
• Reduce distribution claims by 60% - 150K

• Total Pilot Project Savings – approx. $1M

C04 PROJECTS
 Strategic Direction C04
• Manual created with Champions’ CE charts
• February Management conference
» Official launch

• February Corporate Management Team Meeting

» Compile C04 Champions’ CE Charts & CTB Projects

• Select appropriate Black & Green Belts

• Develop C04 training requirements
• Manufacturing sites launch presentations in
April
 C04 Projects
• Finance
– Waste reporting across all areas of business
– SunRice Six Sigma savings recording tool

• Domestic Aust/NZ - $500K - Estimated potential

savings
– Reduce Skippy COGs – $250K
– Reduce Pour & Store COGs – $250K

• Coprice - $200K – Estimated potential savings

– Quality improvement & waste reduction Leeton Feed Mill –
$200K
 C04 Projects
• Operations - $1.5M – Estimated potential savings
– Northern Region – $375K
» Mill downtime reduction – $50K
» Produce flour to market splits at defined rated capacity –
$185K
» Zero changes to production plan week 0 – $60K
» Sustainable 75% packing line efficiency – $50K
» Full utilisation of warehouse & labour efficiency – $30K
– Southern Region – $310K
» Improved process controls Mill 1 – $50K
» Recover whole grain from hull stream – $30K
» Improved packing line efficiency – $200K
» 50% reduction in load performance claims – $30K
 C04 Projects
• Operations cont.
– Supply Chain – $620K
» Class A – $200K
» Reduce cost of supply – $300K
» Further reduce distribution claims – $120K
– Paddy – $100K
» Increase milling yield, optimised drying costs – $65K
» Paddy quality consistency to mill improvement – $35K
– Quality – $175K
» Standard fumigation practice – $100K
» Implement generic shippers – $75K
» Further roll out of SunRice Six Sigma

• Total Project Savings – approx. $2M

 C04 Project Review Strategy
• Black Belt presents project at half way
point to Champion
• Halfway presentations July -
September
• Formal project presentation on
completion to Champion October -
March
• Project presentations to CEO on
completion
C05 PROJECTS
 C05 Strategic Direction
• April Corporate Management Team
Meeting
» Compile C05 Champions’ CE Charts & CTB Projects

• Select additional Black & Green Belts if

required
• Develop C05 training requirements
• C05 SunRice Six Sigma Project Manual to
be presented to CEO end May
 Moving Forward - C05 Direction
Consolidation
• Target training for new project leaders
– Black Belts
• Confirm that metrics across all
functions are meaningful and
conducive to continuous improvement
– Success in Operations
– Slower progress in other areas

• Needs to be visible
– Behaviour
– Results
 C05 Achievements
Mills: Efficiencies, OH&S, Quality $310K
Supply Chain: Inventories, Synergies $580K
(Including Global Trading and Riviana)
Coprice: Raw Materials, Efficiencies $538K
SRFG: Efficiencies, Rice Cakes, Utilisation $207K
QA: Fumigation $40K
Trukai: Supply Chain, Efficiencies $1.005M
Total Six Sigma savings: $2.680M
Original Estimate May 2005: $3.018M
Achievement: 89%
C06 PROJECTS
 Strategy
Use Six Sigma to meet the challenges of
C06:
– Big crop
– Competitive pressures (deregulation)
– Tight budget
Targeted training
Focused support
 Projects for C2006
Mills: $1.018M
Coprice: $550K
SRFG: $110K
QA: $200K
Trukai: $905K
Marketing: $300K
Targeted Total: $3.083M
C07 DIRECTION
 SunRice Project Structure

Major Six Sigma Rapid

Business / Capital Projects Improvement
Projects Projects

BB Project Lean
GB Project Tools
Selection of Lean Tools

Tools that could Stand-alone

be integrated tools

• 5S (housekeeping) • JIT
• Value Stream • TPM
• 7 Forms of Waste • Takt Time
• Root Cause Analysis (5Whys) • Kanban
• SMED • Poka Yoke
• Visual Management • Heijunka
 Summary of Status for C2007

• Initial estimated total: $2,099k

• Reduction due to drought: $259k
• Benefits not until C08: $357k
• Added: $200k

Revised C07 total: $1,683k

Complete or well progressed: $1401k (83%)

To be confirmed $490
 Sunrice Six Sigma - Annual savings since inception

$12,000

$10,000

$8,000
$000

$6,000

$4,000
$3,638
$2,728

$2,000
$1,625 $1,391
$1,000

$-
2003 2004 2005 2006 2007

Annual savings Cumulative savings

C08 PROJECTS
 Summary of C008 Projects

Leeton Mill: 3 Projects $63k

SRFG: 4 Projects $170k
Rice Cakes: 1 Project $210k
Total Leeton Manufacturing: $443k
Coprice: 2 Projects $270k
Quality/Tech: 7 Projects $90
Trukai: 1 Project $400
Supply Chain, AGS, Thailand: TBA
Total C08: 18 Projects $1,203
SunRice Six Sigma
Review of Manufacturing Projects - May 08
Leeton Milling Projects
• White Mill Data Recording
– Accurate downtime recording
– Dashboard being used by Millers to review orders and daily
operations
– Shift and Daily reports being generated in SharePoint
– Completed link from SQL Database to SharePoint so live data
can be distributed across the business
• Power Consumption
– Consumption analysis has been completed
– Focal area initially was intake pits into brown mill
– This project will gain more significance for next year – starting
and stopping
– Needs to be an ongoing project
Leeton Packing Plant
• Dedicated Brown Supply ($118K)
– All required equipment has been delivered
– Will be installed and operational by end of May

• Line 22 Upgrade ($49.5K)

– Conveyors on site
– Low priority as Line 22 has low volumes allocated to it for
the coming year.
SRFG Projects

• Project Overload ($120K)

– Significantly reduced batch times in VE Plant
– Developed from shop floor idea
– Anticipated savings of $120K pa
Rice Cake Projects
• Rice Cake Waste ($180K)
– Reduction in waste from 10.8T/wk to 8.2T/wk
– Estimated saving of $8k/week (Original Thin)
– Accurate waste recording
– Excellent feedback to team members

• Corn Cake Improvement ($150K)

– Trials with Corn and Rice combinations proved successful
– Overhauling Incomec machine highlighted issues with 6
head moulds
– Enzyme modification trials completed
Rice Cake Projects (Continued)

• Project Start-up/Shutdown ($100K)

– New method of recording start-up performance
– Reconfigured RDO’s
– Team Shutting down now starts up
– Communicated start-up performance through SharePoint

• Incomec Automation ($25K)

– Now that the oil system has been installed project will be
completed at the end of May.
Rice Cake Projects (Continued)

• Flavour Recovery ($200K)

– The first flavour recycling system installed and operational
– Spinning Disc Oil system has been installed
– Working on ways to reduce carry over and develop
standard operating conditions
Manufacturing Overall
• Upgrade 4TQ (SharePoint)
– Forms are reducing paper work and stream lining meetings
– One central place for all information across all
manufacturing sites
– Upgrade to MOSS in April - ongoing project

• Employee Management System (MEMS) ($10K)

– Solution developed in SharePoint allowing for centralised
Casual Employee Management
– A second version of the Roster to be generated once the
MOSS system and Kronos are fully installed
– Accurate FTE Report
C08 Projects - SharePoint

Project Objective: To improve Manufacturing systems

and paperwork. Communicate more effectively across sites
and departments. To develop consistent processes and
reporting across work areas.

Expected Benefits: Improved goal alignment and

understanding of expectations. Better comparison of work
across sites. Better visibility of performance.

Anticipated Savings: There will be no direct savings

associated with this project.
C08 Projects – Power Consumption

Project Objective: Build on previous work done in the

electricity consumption audit. Reduce electricity
consumption to in turn reduce utility costs.

Expected Benefits: Savings in electricity cost, education

and analysis techniques.

Anticipated Savings: Anticipated savings of 5% of

Budgeted Variable Electricity Costs $63K
C08 Projects – Start Up

Project Objective: To have systems and training in place

for the potential re-opening of Coleambally or the Deniliquin
Sites.

Expected Benefits: Smooth transition from the decision

to reopen to the operation of the plants. Ensure consistency
with other manufacturing sites.

Anticipated Savings: There will be no direct savings

associated with this project.
C08 Projects – Rice Cake Waste

Project Objective: Reduce waste and customer

complaints through the optimisation of the new Spinning
Disc System.

Expected Benefits: Reduction in waste resulting in

improved MUV results. Reduce Waste from 6 tonne per
week to 4.5 tonne per week.

Anticipated Savings: Savings of $210K, (based on

$4.50 per carton and 12 slug cartons, assuming waste is
converted to Finished Product)
Critical Principles for
Successful
Implementation

- Current Status &

Opportunities
 Principle 1 – Establish a Process
Management Framework
• Current status
– Operations
– Finance
– Marketing/Sales
• Opportunities
– Coprice (Underway)
– International Marketing/Commodities
– P&C
– Grower Services
 Principle 2 – Establish a Customer
and Marketing Network
• Current Processes
– Customer Service Survey
– Consumer Relations Centre
– DIFOT Measurements
• Opportunities
– Key/large customer meetings to discuss and
develop critical customer requirements which
are measurable
 Principle 3 – Linkage of efforts to
Top Level Strategy
• Current Process
– C03 and C04 Strategic Direction documents
– CEO and CMT develop business
» Customer Diagrams
» Voice of Customer Statements
» Department CE Charts
» Critical to Business Diagrams
» Project Registration

• Opportunities
– Use facilitator to assist with the identification of key
business projects
 Principle 4 – Commit to Full Time
Six Sigma Team Leaders
• Current Status
– Currently zero dedicated Black Belts or Team
Leaders
• Opportunity
– Dedicate full time resources
 Principle 5 – Establish Incentives &
Accountabilities for New Performance
Standards
• Current Process
– Project outcomes linked to SunRice
Performance Management and Incentive
program
• Opportunities
– Currently linked to pre Six Sigma P&C
programs. Potential for new program that
creates new behaviour
 Principle 6 – Projects must Produce
Real Savings, Revenues or Customer
Satisfaction
• Current Process
– The current SunRice Six Sigma Program has more
than “paid its own way” with real savings achieved
across multiple projects. Savings further improved in
normal crop scenario.
• Opportunities
– Finance taking a more proactive role in identification
of business opportunities
– As “low hanging fruit” disappears a more
sophisticated approach is required for more
complex/cross functional problems
 Principle 7 – Leadership must be
Committed Over the Long Term
• Current Status
– Strong commitment in Operations
– Some commitment in Sales/Marketing
– Limited involvement from other business sectors
• Opportunities
– Aggressive CMT Leadership and Commitment
across business