Lean Manufacturing Brings Sweet Success to American Licorice
A candy manufacturer in Mexico approached American Licorice with a challenge it couldn't refuse. The Mexican manufacturer claimed it could produce the company's candy cheaper than the American plants. Corporate agreed to a trial. The results shook the management team in the Alsip, Ill., and California plants to their core. The Mexican plant produced the candy for "a lot less," says James Marturano, director of World Class Manufacturing at the Alsip plant.
Instead of moving production south, management in Alsip believed lean would answer the Mexican offer. Marturano called South Suburban College, an affiliate of the Chicago Manufacturing, to assist in staging a one-week lean brainstorming event at the plant. Ten to 12 associates from across the company - from the shop floor to information technology to maintenance to the controller - attended. The team identified 75 areas to eliminate waste. By week's end the Alsip plant had reduced enough costs to be able to produce the candy at 50 percent less than the Mexican plant. "From the model we saw it was possible to make candy in Alsip at our current wage and compete with Mexico," says Marturano.
Marturano says a key problem for the plant was the handling and rehandling of materials. Therefore, most of the savings came in reducing wasted motions. For example, for the Beanz line team members repositioned the packaging machine to where the candy came off the line. That made it possible for one team leader to handle both the panning and packaging area.
For management who might have feared a huge capital investment in going lean, Marturano is pleased to report 80 percent of the changes have come from people and ideas. Other results in this first year of a multi-year transitioning process have been just as impressive:
- The cellular processing structure has allowed associates to better view the production process and to increase productivity. For example, in the two-ounce licorice line of candy productivity is up 30 to 35 percent. The team on the vertical form and fill machine increased productivity 64 percent.
- Scrap is down by 50 percent.
- Increased flexibility means the company can get new products out to market faster.
- Lean is proving to be a good selling tool in demonstrating American Licorice can give customers the best value and the best products.
- Corporate culture has undergone a metamorphosis from an autocratic structure to one that embraces empowerment. For example, Marturano says one team was investigating new equipment and decided they didn't need $500 of extra bells and whistles. That, he says proudly, was a huge cultural shift.
