Florentines Patisserie - Sustainable Business Network

LEAN MANUFACTURING EQUALS SWEET RESULTS
An SBN Case Study on Florentines Patisserie
Website: www.florentines.co.nz
Director: Greg Knight, Managing Director
In business: 17 years, Tauranga
Focus: Manufacture and Sale of Premium Frozen Cakes and Desserts
BACKGROUND
Florentines Patisserie is a privately owned company that manufactures and sells a broad range of premium frozen cakes
and desserts for the foodservice and retail markets through-out Australasia. Florentines has spent considerable time,
money and resources on developing innovative products and processors to produce these traditionally hand made
products. The company offers a unique mix between the bakery and patisserie style product. The business was
established as a small wholesale patisserie in Tauranga 17 years ago supplying the local market with a large range of
patisserie cakes, desserts and pastries and has grown by more than 900% over that time.
QUOTE
Florentines New 20,000sq.ft factory
“For businesses to succeed in the future, they will need to embrace good business practices, such as building efficiency,
minimising waste, maximising resources and making the staff and customers the centre of their business. This will give
companies a competitive edge which is the foundation of success and profitability.”
Greg Knight, Managing Director, Florentines Patisserie
ACTIONS AND RESULTS
Ambitious Goals
Florentines has an ambitious goal to build and grow the business to a $30 million world class manufacturing patisserie
that inspires pride. The complexities of developing this business from a small batch producer to a small run
manufacturer of patisserie quality products has not been without challenges and expense but Florentines rose up to the
task.

Introduction of Lean Manufacturing
Management recognised early on that it was important for the company to consolidate its position after 3 years of
aggressive sales growth and concentrate on the internal robustness of the business. In February 2010, Lean
Manufacturing i was implemented into the business to cope with system issues faced by having a larger range and
production facility.
Florentines was clear that they wanted to survive the difficult change from a small batch producer to a larger
manufacturer and the productivity improvement project was implemented throughout the company. Lean
manufacturing has been a large part of helping Florentines to scale up and re-design almost all facets of the business.
The company has implemented change across the entire company from the business structure, production processes,
warehouse systems, finished products inventory, new products, accounting practices, and sales and marketing. This
helped give a clear focus and strategy to help the company improve its profitability.
Staff Training
Florentines realised early on in the Lean process that productivity was going to be a large factor in helping the company
survive and prosper. Most of the products are hand-made and without the correct flow and procedures, competing in
the marketplace would be difficult if not impossible.
A considerable amount of time was spent on staff training around continuous improvement. In less than a year, over
150 continuous improvement ideas were suggested and almost all of these were implemented.
Creation of New Roles
An existing staff member, experienced in production planning and lean processes, was re-stationed into the production
planning role with a view to improving the production processes and systems. Significant improvements were made in
this area. Another person was employed to take over many of the production planning tasks so that the experienced
staffer could further develop the productivity programme that has been set up. These are both new roles and huge
resources have been allocated to this programme of continuous improvement.
Change Management
Florentines realised early on that the change couldn’t be imposed upon the staff but rather they needed to buy into the
change and lean process. Although not initially easy, it was supported by the management team’s determination and
patience. To better facilitate this change process, and so that the managing director could spend the considerable time
required with the staff, a person was employed to take on his role in the sales and marketing department.
After a large amount of staff awareness training and knowledge building, Florentines worked hard on aligning the aims
and values of the business with the needs of staff. Again, much of this was done with staff consultation. Although still in
the early stages of this change process, the business believes in continuous learning and incremental improvement.
Florentines is now in the process of breaking down its strategic vision into smaller measurable KPI’s and performance
measures.
Sustainability Measures
• Moved from plastic milk bottles to bags even though they are more expensive. This saved one large rubbish bin
and pick-up per week.
• Implemented a recycle bin for all cardboard products.
• Changed to a new supplier that used recycled cardboard for all cake packaging.
• Purchased new freezer equipment that has reduced power bill from $1.01 per square foot to $0.32 per square
foot.
• Moved from having four colour printers throughout the business to one more efficient colour printer which has
saved 30% in costs over the last three months.
• Any waste food products is now given to pig farmers instead of dumping.
• All staff are encouraged to turn off all computers etc. prior to leaving for home.

• Staff are encouraged to turn all lights off in rooms not being currently used i.e. toilets, changing rooms, staff
room, hallways and warehouse.
• Only fuel efficient cars are purchased and are kept regularly serviced.
• Suppliers are chosen based on commitment to sustainability principles where possible.
Some Results Highlights
• Increased production efficiencies, improved stock management and enhancement of strategic supplier
relationships have allowed Florentines to reduce stock levels by 24% since 31 March 2011. This has dramatically
assisted the cash-flow position of the company.
• The recognition that contract manufacturing held huge potential and made easier through lean manufacturing
resulted in Florentines gaining a contract supply for one of the largest café chains in Australia with over 500
stores.
• Liaising with customers and striving to better understand their needs has led to the development of a low fat,
low sugar, high fiber products for hospitals and rest homes (new market).
• The implementation of small changes suggested by staff has benefited the company hugely with estimated
savings of over $100,000 this year.
• Florentines’ lead time has always been 4 days. 18 months ago, the business struggled to maintain a 60-70%
DIFOT (Delivered In Full, On Time). Although it has maintained a 4 day lead time KPI, the business now has an
almost 100% DIFOT and most of the product is dispatched the next day.
• Customer feedback is seen as a valuable resource and has been used extensively to build the business. Over 71
changes have been made to the product range in the last six months as a result. In the last 6 months,
Florentines has had to increase the R&D department to three people in order to keep up with the development
of new product and product changes from customer requests.
• Variable expenses as a percentage of sales have dropped by 29% since 2010.
• Fixed expenses have been reduced by 24% since 2010.
AWARDS
• 2011 BOP SBN Awards Productivity Award ii : Winner
JUDGES’ COMMENTS
• Integration of productivity tools were evident in every aspect of the business with every staff area and
workplace, whether management or factory floor.
• The vision for Florentines is shared throughout the business and staff are kept well-informed on progress against
the vision.
• Extremely strong leadership and commitment is displayed from the top and productivity improvement is driving
the growth and sustainability of the company.
• The staff is increasingly empowered through the new systems to identify and solve problems independently.
• A focus on productivity improvement has created an environment where the planning tools are in place to cope
with large orders.
i
"Lean," is a production practice that considers the expenditure of resources for any goal other than the creation of value for the
end customer to be wasteful, and thus a target for elimination.
ii
The Productivity Award is sponsored by New Zealand Trade and Enterprise. It is specifically targeted towards businesses which
have embraced business practices - such as lean, or any other systems - that have allowed them to increase their output
without increasing resource use, waste, or time.