Bright Dairy Reduces Operational Costs by More Than 10 per cent Through Tetra Pak Program

Tetra Pak and Bright Dairy implemented the first Operational Cost Reduction-Focused Improvement (OCR-FI) programme in August 2008 at the company’s Fengxian factory, before expanding the project in 2009 to their Tianjin factory and a factory in Shanghai.

5/10/2011 --- The Bright Dairy brand has been providing safe, fresh and nutritious dairy products for more than 50 years and has the largest market share of fresh milk, yoghurt and cheese products in China. To ensure the company’s long-term sustainable growth, Bright Dairy knew that they had to harvest not just money, but more importantly, successful management concepts and methods. For this reason, in 2008, Bright Dairy teamed up with Tetra Pak to implement the Operational Cost Reduction (OCR) programme. Tetra Pak’s OCR programme is a consulting service that aims to help customers reduce the operational costs of running a complete packaging line, including labour, maintenance and utilities.

Bright Dairy, working with Tetra Pak OCR, has achieved operational cost reductions of up to 10.9 per cent.

Tetra Pak and Bright Dairy implemented the first Operational Cost Reduction-Focused Improvement (OCR-FI) programme in August 2008 at the company’s Fengxian factory, before expanding the project in 2009 to their Tianjin factory and a factory in Shanghai. Additional projects at Bright Xi’an (JingYang), Bright Fuyu (SongHe) and Bright Dezhou started in 2010.

An important aspect of OCR is involving staff to foster ownership of the programme. With Tetra Pak China providing cost reduction methodology and coaching, Bright employees were engaged directly in group activities, such as analysis of cost and loss, discovering opportunities for cost reduction, developing and implementing improvement measures and setting cost reduction goals for the company’s filling operation.

Within four months, Bright Dairy began to realise significant gains from the OCR-FI project, ultimately achieving operational cost reductions of:
•  Bright Xian (JingYang) – 9.2 per cent
•  Bright Fengxian – 9.9 per cent
•  Bright Fuyu (SongHe) – 5.4 per cent
•  Bright Dezhou – 6.7 per cent
•  Bright Tianjin – 7.6 per cent
•  Bright No.2 Factory – 6.3 per cent

Following the successful implementation of ‘Focused Improvement’, Tetra Pak and Bright Dairy moved forward into the next phase, known as ‘Continuous Improvement’ (OCR-CI). The aim was to explore how to further improve and stabilise operational cost, provide integrated solutions for future cooperation and to ensure that OCR delivered lasting and positive change.

From September 2009 to September 2010, OCR-CI was implemented at Bright Dairy’s Fengxian factory. The programme team conducted initial data collection and opportunity-point analysis. They identified areas to reduce operational cost that included extending production time, cutting overfilling and unrecorded waste.

Cost reduction and behaviour change indicators were established and a Steering Group formed to track and review project performance. A Tetra Pak specialist trained more than 100 employees in the OCR-CI methodology, which aims at both sustaining performance gains by incorporating new behaviours into day-to-day activities and promote ongoing, incremental improvement.

The scope of the OCR-CI programme focused on the pre-processing and filling units and included a range of improvement actions. These waste reduction actions included water flush control for pasteurisation, more accurate raw milk reception, optimised milk recycling procedures, air push devices for UHT processing and overfilling reduction — leading to a reduction of product waste of more than 24 per cent.

Bright Dairy’s Quality Control (QC) and Engineering teams were also actively involved. QC staff led an improvement action team that increased the production run for high-acid products from 16 to 24 hours, significantly reducing the need for cleaning in place (CIP). The Engineering team increased energy efficiency in the process by focusing on the condensed water recycling system, steam accumulator and using electrical blowers to replace compressed air to dry packages.

Mr. Lu Junfei, General Manager of Bright Dairy’s Fengxian factory during the OCR project and now GM of Bright No.8 dairy factory, said, “Tetra Pak’s OCR is the best programme I have seen over the years, combining both theory and practice. An ancient Chinese saying states, ‘Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.’ The OCR has not only taught us how to fish, but has also trained an entire fishing team. Today we have progressed successfully with the help of Tetra Pak and we are expecting a great harvest in the near future through our joint efforts.”

The success of OCR-CI at the Fengxian plant in the QC, engineering and maintenance fields has led to the methodology being rolled out to other supporting departments such as administration.

The result of OCR-CI at Bright Fengxian has been impressive, with challenging targets met and often exceeded:
•  Operational cost reduction of 10.9 per cent
•  The average score in the daily audit of employee behaviour change in the pre-process and filling cells was 83.4 points, exceeding the original goal of 80 points.
•  The goal set for short-time activities for both the pre-process and filling units was 400, but OCR has delivered 532 and 659 activities respectively.
•  Total product waste was reduced by 24.1 per cent, exceeding the original target of 20 per cent.
•  Savings were initially targeted at RMB 1.38 million but actually totalled RMB 1.57 million (approximately EUR 168,000).
•  Factory Overall Equipment Effectiveness was increased by 1.6 per cent.

Bright Dairy is now driving the OCR throughout its operations, establishing a factory-wide ability to increase productivity, and improve employee performance and ownership with regard to the operation and maintenance of equipment.

“OCR is the effective combination of theory and practice that delivers ongoing improvement through the continuous pursuit of excellence,” said Mr Zhang Fuhua, Vice President of Bright Dairy during the implementation of the OCR project. “I am deeply impressed by what our employees have achieved. With OCR, Bright Dairy has harvested not just money, but more importantly, successful management concepts and methods. It is unique in ensuring our long-term sustainability.”