How O.R. Improved Performance and Profitablilty for a Regional Baker

The Problem
The Solution
The Value

A medium sized bakery’s new managing director inherited a successful business containing a large number of ‘legacy’ operational information processes that he felt could be improved. O.R. people were brought in to help management turn existing data into useful information for shop-floor dissemination.

The Problem

The two main objectives were:

to identify redundant effort in data collection (for example, collecting data that were never used or duplicate entry)
to consult the shop floor via a series of interviews and provide a solution as to how the existing shop floor communications could be improved

During the process of the undertaking the project, the objectives evolved to include the provision of a means for the members of the senior management team to communicate performance issues more effectively.

The Solution

The results of a shop floor interviewing exercise determined that shop-floor employees were interested to have access to more information regarding the performance of the business. It also became clear that the concept of ‘performance’ had not been considered for a number of years and, furthermore, what constituted ‘good’ performance varied depending on which member of the management team was consulted! Clearly, before information needs could be addressed, the idea of what constituted ‘good performance’ needed to be addressed by means of a ‘process mapping’ exercise.

Extensive O.R. work, using what is called ‘Soft Systems Methodology’, was undertaken to identify actions for change that would be culturally acceptable to the company. Subsequently, a Balanced Scorecard approach was devised that incorporated Quick Response Manufacturing and Theory of Constraints philosophies that would assist management with decision making.

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The Value

The outcome of the project is that the bakery now uses the Balanced Scorecard concept to provide management and shop-floor staff with relevant information; the process mapping exercise allowed for the switching off of certain processes that were adding no value to the business. Shop-floor workers received the information they needed via new notice boards and the production of one product line was trialled at the speed recommended by the model – management decided that a similar analysis would probably be beneficial with certain other lines.

Despite some initial doubts as to whether or not they would see a useful end result, the bakery management were left in no doubt that there is value in Operational Research for a company of their size.

“Our management reports have been supplemented by a Balanced Scorecard. Our reporting systems have been mapped and refined to reduce duplication and deliver a ‘single version of the truth’. We wanted an outcome that was tangible: we got that and a lot more!”

Unsurprisingly, the Managing Director was keen to continue such work in the future and felt that O.R. could also make a contribution to the reduction of unplanned downtime and levels of factory waste.

An unexpected benefit of the investigation was the discovery that some product lines experienced higher levels of wastage than others. Conjecture existed that production speeds had been increased to the extent that the manual packaging line could not cope with the arrival rate. A simple mathematical model estimated that, by operating at an alternative setting, the bakery could save between £2,800 and £4,200 worth of product a year on one line alone.