royal star article
0 likes355 views
Royal Star Foods, a large seafood processing plant in Eastern Canada, underwent a productivity enhancement program to improve efficiency and increase revenues. The program, led by consulting firm ICS, analyzed operations and identified specific process improvements. These included eliminating an unnecessary step in lobster processing that improved taste, redesigning equipment to process previously discarded lobster parts, and adjusting staffing levels and assignments on processing lines. Overall productivity increased nearly 16% and projected annual savings are 89%. The program instilled new attitudes among employees and agreement on clear company directions.
More Related Content
Similar to royal star article (20)
royal star article
- 1. ¡°FISHING FOR THE FUTURE¡±: NEW PRODUCTIVITY AT ROYAL STAR FOODS By Barry Jagoda and Paul Kowdrysh Royal Star Foods is one of Eastern Canada¡¯s largest and most modern seafood processing plants. It is part of the Tignish Fisheries Co-operative which has been around since 1922. Currently, the plant is undergoing a total ¡°profitability and productivity enhancement program¡± to improve management and employee skills, and to improve efficiency and increase revenues. The Tignish co-op has nearly 200 members and the processing plant employs 400. The crucial need for a new look at operations came as a result of a tripling of revenue in the past several years. With the huge increase in workload, and with a new management coming aboard, especially a new CEO named Peter Kean, it was clearly time to improve worker and management capabilities, to install the most modern production techniques and to examine the business from top-to-bottom. For decades Royal Star has successfully managed its local processing business, taking in lobster, crab, mackerel, herring, bottom feeders and other fish product through Tignish Co-op efforts from the great Atlantic waters off Prince Edward Island, Canada. But it seemed to make sense to bring in an outside firm that would analyze opportunities freshly, and then would present possibilities for change. Help came in the form of ICS, the world¡¯s leading Productivity Company. ¡°When I came to this job in November, 1999,¡± said CEO Kean, ¡°I had goals I wanted to accomplish, but after ICS spent three weeks here analyzing our operation, I realized they could help me attain these goals much faster than if I had attempted them on my own.¡± ICS, with several hundred clients annually in many fields, has had much experience with food processing and fisheries, maintains Canadian offices in both Toronto and Montreal and operates in 60 other countries around the globe. Of course, for serious improvement to be implemented, it is critical to make sure that management and the workforce supports the changes. This is a constant
- 2. across any program of productivity improvement. Though this education and demonstration process is extremely time-consuming, it is well-worth the energy and the effort expended. Until people see the benefit of change, of course, it is much easier to continue along older patterns. According to Paul Kowdrysh, CEO of ICS Canada, ¡°If we want improvements which perpetuate, we must ensure that all are involved. If not, the result would be rebellion or anarchy. We must show how change will benefit the individual employee, as well as the overall organization.¡± Most important, the productivity program has shown significant results in just a few months. As expressed by one Royal Star front line supervisor, ¡°The people on the floor are really noticing the changes. They are having a better understanding of what I¡¯m looking for and they are doing it even before I ask. There is a change in attitude and mindset happening here.¡± The basic approach involves starting at the very bottom of the organizational structure to map out exactly what functions take place on the processing floor. Guidance on how to operate the plant comes from the ¡°point-of-execution¡±, the place of work, and goes up the line to supervisors, to area managers and on to the executive management. Working with the supervisors and the line workers, ICS develops the best agreed upon procedures and gets agreement for change away from less productive approaches. After the initial process mapping in each part of the plant, one-on-one follow-up takes place with each worker and each supervisor. The goal is to identify the best way of doing a particular task and to highlight outstanding performances. If these approaches can be duplicated, increased results follow. The overall change program is clearly working at Royal Star Foods. In just a few months product yield has increased more than 4%, which is an exceptional accomplishment in this type of industry. Overall productivity has jumped nearly 16% and the projected yearly savings to the company in costs and expected income is a huge 89%.
- 3. Results are derived from instilling new attitudes toward the work among employees at all levels. At the same time, very specific process improvements are put into place. Here are some examples: ? Quality had been sacrificed on the lobster line: After meat was removed from the body, it was washed to remove bacteria and shells. Then, for decades, this valuable lobster meat had been squeezed to remove excess liquid. Unfortunately this has given the meat a more bland taste. No explanation had been offered for the value of the squeezing, so this step was terminated. The result has been a much more tasty product now being well-received by wholesale customers and sustaining a larger market share. ? The ¡°flapper fin¡± of the lobster had been historically discarded because of the labor intensive extraction process. Working with the client, ICS engineers redesigned (at a cost of $CN30) the automatic extraction rollers to handle this part of the lobster. The result was an immediate $CN4500 weekly increase in revenue, which would be derived in perpetuity and increase as the harvest got larger. ? On the snow crab processing the line called for 28 employees. There were tremendous bottlenecks. In the past more people had been added to try to fix the slowdowns. The ICS analysis showed that fewer employees would actually be more efficient. Under the old system the 28 workers produced 2,700 pounds of cleaned snow crabs per hour. With behavior changes and revised processing line assignments the new system, with 23 employees, produces 3,600 pounds of crab per hour. This was a decrease in labor of 18% and an increase in output of 25%. Through re-training, other jobs would be found for the surplus processors. ? On the herring line it was agreed that payment based on production, or piece work, could be effective. The ICS engineer spent a good deal of time observing the process and came up with a payment plan that seemed fair to the employees and to management. ¡°This is the best year we¡¯ve ever had,¡± said the herring production manager. ¡°The new approach to pay has worked,¡± he added.
- 4. A proprietary employee improvement plan was immediately put into place at Royal Star Foods. Results from the first few months were significant, with 46 ideas submitted. A committee of employees, management and ICS evaluated the suggestions and three have now been implemented. ? Keeping the fish chilled is imperative. Getting ice to the assembly line is an everyday necessity. Four men had been involved in a fork-lift/shoveling operation. The re-fitting of the forklift, with a front-end shovel, has saved more than $CN80,000 annually. ? Several employees suggested revised the forms filled out to transfer fish between the co-op and the processing company. New forms have saved more than $CN10,000 per year. Even though all are delighted to point to these specific changes, the largest source of savings and productivity improvement is derived from the company-wide new sense of teamwork and to agreement on a much clearer company direction. The entire workforce has gone through seminars and individual consultation on such subjects as: ? The cause and effects of lost time ? The cause and effect of inappropriate resource loading and crewing ? Ways of maintaining accountability to lessen finger pointing and a culture of blame ? Ways of using conflict to achieve effective problem-solving All of this has boosted company morale enormously. The sum has been much a much greater output at significantly reduced cost. The whole purpose of Tignish Fish Cooperative, back in the 1920¡¯s, was to create an organization to improve the lives of local fishermen, to make things better for their families and their community. That is still the goal of Royal Star Foods, but now the form is that of a very big business. The good news is that, in the year 2000, they are still banding together in Tignish, now to further build management and worker skills, to develop the right attitudes for continued growth and to work smarter, better and more efficiently.