Quality a Good Bet at Kraft (sidebar)

Feb. 1, 2005
Food and beverage manufacturers are under incredible pressure to deliver products that are profitable and, just as importantly, conform to strict quality standards.

As Walt Staehle, director of MES and Shop Floor Systems for Kraft Foods Inc., in Allentown, Pa., puts it, “Food and beverage makers have the most intimate relationships with consumers. After all, consumers eat our products. How consumers respond to your brand will determine your success. Every day, they vote with their pocketbooks.”

As part of a broader Manufacturing Execution System (MES) initiative, Kraft launched a program called Manufacturing Quality Future State (MQFS). Says Staehle, “MQFS goes way beyond ‘Total Quality’ and ‘Quality Circles.’ ” At Kraft, MQFS is a joint manufacturing, quality and systems program designed to increase productivity while improving product consistency.

“For many years, people looked at productivity and quality as two separate things,” notes Staehle. “But when you look at asset management, you see that they are intertwined. Quality is the springboard to Overall Equipment Effectiveness (OEE).”

Staehle defines OEE as “equipment availability” multiplied by “equipment performance” (the rate of speed the equipment can be run) multiplied by the “first-pass quality.” Says Staehle, “The most expensive variable is first-pass quality. There is a positive and long-term relationship between productivity, availability and quality.”

MQFS is one of the five families of MES projects at Kraft, which are being rolled out over a five-year period that began in 2001 and will continue through 2006. In addition to the MQFS effort, these projects include selection and implementation of systems for:

Infrastructure—computers, local area networks and other hardware

Laboratory information management (LIM)

OEE, and

Statistical process control for finished goods weight control.

Says Staehle, “We approached these five families as one large MES initiative, with capital approved for a five-year plan. The sequencing and orchestration was integrated to hit certain milestones, with implementation staggered across the entire enterprise.”

Data for decisions

The four MES principles Kraft applied to the MQFS project are technology, information, education and ownership.

Choosing the right technology—the first principle—meant selecting tools that provide the right functionality at the right price. According to Staehle, “We implemented the Unilab solution in Simatic IT from Siemens as our overarching platform for quality laboratory management. It was the most robust, reliable and trustworthy platform to govern the links needed between our process control, laboratory and production systems.”

For the information principle, Kraft provides real-time data to those within the plant who can best use it to run the business. “This is the essence of MES—it deals with people’s relationships with the manufacturing processes by using data to make timely and meaningful decisions,” notes Staehle.

The third principle—education—means Kraft spends a good deal of effort training employees on how to use the new tools. “You don’t just go out, buy a system, have technical personnel bolt it down and then say, ‘Adios.’ You need to train the users on the new systems in order to get credible and accurate results.”

But it was the fourth principle—ownership—that posed the greatest opportunity for Kraft. Says Staehle, “Our biggest challenge was to prepare the organization to give employees the elbow room they needed to make decisions, and have them be confident in those decisions.” The MES projects are enjoying great success at Kraft, in large part because of the steps taken to ensure employee ownership.

“We needed to move out of the traditional mindset of who has control of the process—Is it Quality, Research & Development, Engineering or Operations?—and move toward an environment of shared information without prejudice,” notes Staehle. An important part of this process was to determine what real-time data was needed, and at what intervals, for each department and production unit across the enterprise. “There’s a range of real time. It might be seconds if you’re bottling salad dressing, but only once an hour if you’re smoking meat, and we had to determine that upfront for each process.”

MQFS brought together cross-functional teams to make these decisions, ensuring that all departments had ownership in the process. “We invited operators in to decide what data they needed to get, when they needed to get it, and where to get it from, so they would have faith in the accuracy of the data,” says Staehle. “At Kraft, the people who make our products are empowered with a lot of trust. We’ve given them power over their jobs. And you know what they now say? ‘Thank you for these systems. Thanks for making my job easier.’ ”

How are the projects paying off? The MQFS systems are installed in 16 plants across 12 Kraft categories. The weight control systems are installed on more than 700 lines, and the common LIM system is operational in 54 plants. To date, Kraft has invested about $30 million in capital and expenses, with an internal rate of return (IRR) of more than 30 percent, a 10 percent improvement in yield and an average 30 percent reduction in process variation. The cumulative savings for the programs total more than $32 million through 2004, of which $22 million are on-going annual savings.

Says a satisfied Staehle, “I love the MES environment. There’s almost unlimited potential to improve bottom-line performance in the food and beverage business. It just takes courage and the right tools to start the discussion.”

See the story that goes with this sidebar: MES Deals a Winning Hand