INCREASING EFFICIENCY, TOGETHER

There was something not quite right about the Macanudo Inspiration White handmade cigars.

A customer of the cigars, being manufactured at Scandinavian Tobacco Group’s factory in Honduras, had highlighted incorrect information on the universal product code (UPC), the line of numbers which appears below a product’s barcode. This was creating issues for customers, as the cigars were not scanning properly into their systems for accurate records of their stock.

The operations team reacted swiftly: a root cause analysis quickly identified variation in how the UPC codes were being printed, resulting in some working as usual and others not scanning – an issue that was quickly fixed.

“There are four focus areas in our performance culture: safety, customer experience, adherence to schedule and efficiency. It is based on Lean techniques, so we put the structure in place and build on it to improve day to day,” says Johan Gebruers, Head of QEHS and Lean.

Safety performance is improving, with the total recorded injury frequency rate per 200,000 hours at 0.46 in 2021, compared with 1.14 in 2020, and handmade cigar output is increasing significantly.

“This is not about one single result achieved by one person, but rather a culture of enhanced performance, achieved by all our employees working together. With thousands of people in production, working together towards the same goal, we achieve sustainable results.”

Everyone together

Lean is a philosophy which aims to provide a new way of thinking about organising activities to deliver more value to the company and a better experience to its customers while eliminating waste.

The Macanudo Inspiration White production example is just one of many elements in how Scandinavian Tobacco Group has used kata – a Lean technique based on a four-step plan to determine an objective, grasp the current condition, define the next target and move towards it – to increase the efficiency of its operations. The approach is centred around the four focus areas so any potential issues can be spotted and dealt with quickly.

“Everyone is involved in kata, all the supervisors and employees working together to achieve that goal every day. Everyone supports it because they can see it’s working,” says Jahayra Alvarenga Ortiz, Lean Coordinator in Honduras.

The number of cigars manufactured per hour has risen from 45 in 2017, when kata was introduced, to 53 in 2021.

Start with safety

The starting point is safety, with the key objective that all employees go home safe when they finish work and that every accident is one too many. From 2017, the operations team gathered information, undertook root cause analyses and implemented solutions with the eventual aim of reaching zero accidents.

This was based on the Lean DNA performance management principles, such as ensuring everything has a purpose and is in the correct place, daily meetings on the shop floor with safety as a first topic and making it highly visible with information boards throughout the factory.

The kata boards include real time performance against targets, so everyone can see progress and any issue slowing production can be spotted and quickly addressed.

“We immediately see if we are producing fewer cigars than we are supposed to, so we can tell something is going on and take action straight away,” says Alvarenga Ortiz. “Otherwise, you would only know days afterwards, and only then could you start to analyse, look for the cause and solve it.”

This also helps with quality control while standardisation – identifying best practice and extending it across production sites – has further added to efficiency gains.

“With Lean, we have changed the way we solve problems and have become more objective when it comes to detecting the root cause,” says Gebruers. “Basically, the way we solve problems now is more structured.”