Florentines Patisserie - Sustainable Business Network

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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.
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Florentines Patisserie - Sustainable Business Network

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