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This article: Heineken's cascade of performance indicators
Source: Business-improvement.eu
TPM: The smooth organization
TPM at HeinekenHeineken's cascade of performance indicators for focused improvement
 By Dr Jaap van Ede, business-journalist, editor-in-chief business-improvement.eu
The first version of this article was published in the Dutch specialist journal Process Control (jan. '10)

The Total Productive Maintenance Program (TPM) of Heineken started in 2003. Thanks to this program, all breweries produce increasingly more efficient and with fewer losses.

The factory in ‘s Hertogenbosch in the Netherlands is one of the best production sites, concerning TPM. Here, in recent years, the Overall Equipment Effectiveness of the packaging lines rose from 47 to 72%. In addition, productivity and quality are better then ever before! TPM-manager Age Posthuma explains this, by stressing three success factors: deployment, audits, and training. 

Of course, additional improvement is always possible. ‘This can be achieved by connecting our external processes better with the operations within the brewery’, says Posthuma1. ‘Examples of those external activities are supply chain processes and the introduction of new machines and products.’

The fifty year old brewery of Heineken in Den Bosch in the Netherlands, is located at no more then a fifteen minutes walk from the city centre. It has the appearance of a couple of huge green shoe boxes. This production site received in 2009, as the first brewery of Heineken, an international accreditation from the Japan Institute of Plant Maintenance for its Total Productive Maintenance (TPM) program.

TPM-audit by the Japan Institute of Plant Maintenance
^ Operators tell enthusiastic about their recent improvement efforts, during a
   TPM-audit by the Japan Institute of Plant Maintenance.

Battle array
What explains this success? ‘One important factor certainly is deployment’, says TPM-manager Age Posthuma1. At first, this only raises new questions!  According to my dictionary, deployment is a military term for drawing up in battle array!

Later in the interview, Posthuma hammers away at the need for discipline. Are the employees of Heineken drilled like soldiers?  Fortunately for them, that is not the case. It is not the people who are lined up, but the Key Performance Indicators, from the management level to the operational level.  

TPM and focused improvement
Total Productive Maintenance (or Total Productive Management, TPM) concentrates on productivity improvement.

TPM embraces at least eight management pillars. These are: (1) Continuous improvement, (2) Autonomous maintenance, to maintain is a task of everyone,  (3) Planned maintenance (4) Training and standardization of the work (5) Early (equipment) management, maintenance and change-over procedures are taken into consideration when new equipment is purchased and/or designed (6) Quality management (7) Optimization of office processes (8) Safety and environment.

Within Heineken in Den Bosch there is a 9th pillar: internal logistics. In addition, Heineken places above all pillars a coordinating management pillar or cross bar, called focused improvement. Within this cross bar, the top level improvement priorities are determined, which give the TPM program direction. Via deployment, higher level goals are connected with lower level goals within specific pillars. In the end this cascade branches off into targets for Key Performance Indicators at the shop floor.

> more about TPM

Focused improvement
To manage its improvement program, the brewery uses the so-called management pillars of TPM (see the box above). Above these pillars lies a cross bar, called focused improvement. ‘Each year, the managers within this pillar arrange an improvement agenda with eight priorities. These are the main losses that will be reduced in the plant during that year.’

These eight priorities are converted into Key Performance Indicators (KPI’s), first for the middle management level, and later for the operational level. ‘That way, you get a cascade of KPI’s’, explains Posthuma. ‘The idea is that finally, everybody knows how he or she can personally contribute to fulfill the improvement agenda.’

Extract loss
Typical examples of annual goals are the improvement of the efficiency of the can production lines, the reduction of the energy consumption, and minimizing the extract loss, the quantity of beer that is spilled during production. During the last years, this percentage fell significantly in the brewery at Den Bosch, and loss of malt was reduced by 27%.

Posthuma explains how a goal like ‘reduce extract loss by X%” is converted to target values for KPI’s on the floor. ‘First, starting from Focused Improvement, it is examined which TPM-pillars can contribute most to the improvement planned. In this case, a lot of avoidable losses could be attributed to the pillar Quality Management.’

Then, in the next step, the management team of that pillar will map where the most improvement is possible. ‘Material balances are used to do that. You could see that as a variant of Value Stream Mapping, applied by chemical process engineers.’

Clear beer
One of the improvement points identified in this case was the loss around the clear beer cellar. From this cellar the beer is distributed to several bottling and packaging lines. ‘To solve such an issue, a multidisciplinary team is formed. In this case, the team consisted of a technician, a maintenance specialist, and several operators. Such a team tries to solve the problem assigned to them within a period of six to twelve weeks.’

Here, the team started by monitoring for a period of two months all in- and outgoing streams of water, cleaning fluid, clear beer, surplus beer, and waste. This lead to the following conclusions:

  1. During the flushing-process, before sending beer to the packaging lines, to much beer is directed towards the sewer.
  2. Later, when feeding of a packaging line is stopped, to much beer is directed to a vessel with residual beer and/or to the sewer.

‘By applying the asking-five-times-why-technique, the team started to search for the root causes of this waste. Finally, they found two countermeasures. First, standard conditions for directing beer to the sewer were changed. Second, flow meters and conductivity sensors were put in place. Since then, it became possible to steer the amount of beer discharged to the sewer by volume, instead of by time. As a result, our annual loss of beer was reduced with an amount which equals 1.6 million glasses!’

The program around the improvement teams is managed in a top-down way. This raises the question if there is also room for bottom-up initiatives. Fact is, that in Lean management it is often stressed that it is important that everybody, everyday contributes to the improvements!

‘We agree with that', Posthuma reacts. 'Kaizen we see as a our second axis of improvement, besides the cascade of KPI’s, coupled to the annual goals. Kaizen is however not done by improvement project teams, but by our machine teams. These are groups of operators who own a certain processing step.’

With Kaizen, focus is first on restoring basic conditions. This means taking care that a machine will function again as new or even better. In addition, attention is given to autonomous maintenance, this means that operators do small maintenance jobs like cleaning themselves. ‘Today, the focus of Kaizen has shifted to continuous improvement. To make that possible, each machine team locally manages a deployment-resembling process. This means: the best improvement suggestions coming from the field are selected.’

Besides every machine, there is an improvement board. ‘This is a kind of cockpit on which actual performances can be read out, such as efficiency data and lubrication times. A part of those data is collected automatically, by our Manufacturing Execution System.’

Once in every three months, the machine team conducts a Pareto-analysis, to identify which machine failures occurred most frequently. ‘To determine which machine parts are the most inclined to failure, sometimes a machine is imaginary dismantled. After that, the team will search for counter measures, to prevent problems with those components.’

Machine boards reinforce the sense of ownership
^  Machine boards reinforce the sense of ownership, and these boards give clear
    direction to the improvement program.

Posthuma has seen the idea of Kaizen become alive in the working place. ‘What we all want is to improve our own performance and make our work more fun. Operators are now engaged themselves with improvement projects, instead of only following orders. Sometimes the result of rather simple adjustments can be astounding, like an efficiency improvement of 1% at a packaging line.’

Westerners however think and act differently then Japanese people. ‘Therefore, it is not possible to completely copy the way how Toyota applies Kaizen’, thinks Posthuma. ‘For example, in the Netherlands, passengers entering trains often block the stream of passengers who want to get out. In Japan you see something completely different. There, passengers are neatly waiting in blocks, until they can enter. What you can learn from this, is that disciplinary behaviour is not in our genes. Therefore we need to give extra focus to this aspect in our factories, because discipline is very important to hold on to the improvements already made.’

Registration of the Overall Equipment Effectiveness (OEE) is a common tool to improve the efficiency of production steps within Heineken. Sometimes, it is said that with OEE-measurements there is a risk that this will lead to local optimization. Posthuma is not afraid that this will happen: ‘A research group from the university of Eindhoven developed software for us, with which we for example can simulate the behaviour of packaging lines.  That way, we identify the bottlenecks in the system. Those are the spots were you should focus on, while improving the OEE.’

So OEE-measurements are not the problem, but there are other things which could be done better within the brewery, such as more alignment with external processes. ‘During the last six years, the OEE of our packaging lines rose from 47% to 72%. To raise it further, it will be needed to look at the connection with processes outside our brewery, such as the introduction of new products or machines.’

There is also room for improvement by aligning the supply chain. ‘Although we internally have a special TPM-pillar for logistic optimization, we are not allowed to change inventory levels or batch sizes ourselves. Every week we receive our production plan, but besides that we regularly get rush orders which disturb the flow. This is caused to a large extent by the fact that we are a very complex brewery. We produce as many as 850 stock keeping units, therefore we often serve as capacity buffer within Heineken.’

Step-by-step plan to roll-out the TPM-pillar planned maintenance
^ Step-by-step plan to roll-out the TPM-pillar planned maintenance

Early Management

Speaking of better alignment: In the years to come, Posthuma also wants to improve the power of Early Management. Roughly said, this means that a new machine is selected and installed in such a way, that the OEE of it is immediately as high as possible. So, change-over’s should be possible easy, and prior to installation autonomous and preventive maintenance programs are already developed.

‘Suppose that we need a new packaging machine. In that case we hand over the technical requirements to a central procurement organization, outside Den Bosch. I don’t want to say that these purchasers don’t listen to our engineers and operators, but they don’t completely follow the early management step-by-step plan, as prescribed by TPM. As a result, we not always speak the same language.’

Recently a new multipacker was bought, installed and put into operation. ‘With this new machine, it is possible to use cardboard packaging material of different suppliers, which makes us more flexible. Initially this advantage was however undermined because the change-over time was as much as 180 minutes. Later, we tackled that problem, and the change over time was reduced to 80 minutes. I think that correctly applying early management could have prevented the suboptimal operation period.’ 

As the example above shows, there always remains room for further improvement! Nevertheless, the brewery in Den Bosch nowadays is seen as leading within Heineken, concerning the application of TPM.

Besides the already mentioned deployment  method, Posthuma gives two other reasons for that: the audits and the training program. ‘Audits we conduct at different levels. Our brewery is divided into zones, which are all allocated to management duo’s. This forces us all to visit the working place regularly. A go to the gemba or shop floor, as they say in Japan.’

The audits don’t serve to breathe down to the neck of employees. The idea is to improve the contact between management and operations. ‘Therefore, also the improvement teams and the machine teams are audited regularly’.

Finally, Posthuma points to the important contribution of Heineken's training program. ‘We have training modules for operators and engineers, tailored to their own situation. The technical teaching was developed in cooperation with the Dutch training institute ROVC, and we added TPM-modules ourselves. The advantage of the resulting mix is that the training now completely fits with daily practice. Exercises can be done at the working place of the operator or engineer.’

Soon, the team leaders will receive a special complementary training. ‘Some of our team leaders used to be operators, they have closely witnessed the development of TPM within Heineken. Other team leaders however came from other companies. These people usually have sufficient management capabilities. However, they do not always have enough knowledge of TPM and technology, needed to ask the right questions to trigger improvement.’

1) Age Posthuma is no longer working within Heineken.

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