Lean manufacturing began to gain ground around the 1990s with Henry Ford and it has caught on quickly ever since. A lean production approach focuses on systematically reducing any non-value adding or wasteful activities, to increase efficiency, productivity and employee morale.
Implementing lean manufacturing processes can be an excellent way to improve efficiency and productivity in the factory, and it can be particularly useful for companies in the business of coffee roasting.
This article examines how the lean manufacturing approach to production can benefit your coffee roasting business to help you maintain efficiency, productivity and of course, profitability.
The Basics of Lean Manufacturing
The primary goal of the lean approach to manufacturing is to reduce wastage as much as possible, wherever possible. Wastage hinders productivity and decreases efficiency, keeping the customer waiting and resulting in wasted finances and resources.
The food and beverage industry is an ideal candidate for lean manufacturing processes, given the usually perishable nature of the items under production. Specifically, the lean approach is a useful method to adopt for coffee roasters, since reducing production times will help ensure that the coffee is fresh when it reaches the customer.
A Case Study: Green Mountain Coffee Roasters Inc
Green Mountain Coffee Roasters Inc has experienced exceptional levels of productivity and profitability since its inception. The company’s annual revenue has soared nearly 700% since 2007 to $2.7 billion. During the same timeframe, profits climbed to $199.5 million, up from just $12.8 million four years earlier.
Despite coming up against serious challenges in recent times, including major revenue misses, plummeting stock and an SEC inquiry, the Green Mountain coffee company is a good example of how lean manufacturing can benefit coffee roasters.
Despite the massive threat that came with the Great Recession of 2008, the coffee roasting company managed to maintain high levels of expansion throughout. During this period, demand continued to increase for the company, so Green Mountain began to implement lean manufacturing processes to keep up.
To improve plant-floor efficiencies, Green Mountain invested in new packaging equipment and lean manufacturing concepts. Implementing these new technologies and procedures saw productivity increase dramatically. Before, the production line could only produce 60 “K-Cups” per minute, and after, more than 600 “K-Cups” a minute.
Implementing the Lean Approach
Since implementing such policies have an inevitable effect on production processes in the factory, it is important that managers ensure staff members are trained in the new procedures. This means helping them to identify key areas of potential wastage to eliminate said waste as much as possible.
For example, when roasting company Coffee By Design invested in a new roastery, the managers knew that getting the production plans right was key. The project manager gave full training to factory workers in principles of lean manufacturing, and even gave them each a notebook to record any key areas for potential waste. This is also an example of change management, which can help make the transition to new software and processes easier on team members.
In a follow up meeting, factory workers identified a list of 95 areas for potential wastage, each of which were then incorporated into the production planning procedures. One particularly significant area with potential for wastage was packaging. Packaging traditionally had been backed up, and the work was finished some 2 hours after the roasting process, meaning the coffee was becoming less and less fresh as time went on. A redesign and standardisation of four packaging areas in accordance with lean production methods produced immediate improvement, so that packaging is now complete only 15 minutes after the roasting process.
Using this lean method for production has clear benefits for coffee roasters. Not only does this method improve efficiency, it will also help managers with inventory control processes. Inventory control will benefit a great deal from a lean approach, as there is less capacity for the accumulation of obsolete stock. Likewise, lean processes can improve inventory control procedures by reducing the risk of running out of stock, because production is fast, efficient and accurate.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.