Annual Report 2010 - Baltika Breweries

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Baltika Breweries | Annual report 2010
Efficiency Improvement Programs
“Lean Production”
The Company continues to develop its “Lean Production”
project intended to minimize all types of costs. In 2010,
Baltika introduced project technologies, including:
Tagging, Value Stream Mapping, Kaizen-blitz (Rapid
Improvement Process), Total Production Maintenance
and the Single Minute Exchange of Dyes. Changeover
time is a vital factor for any company looking to build
its production based on just-in-time manufacturing and
economic lot size concepts. Rapid changeover is a way
to convert equipment to run different products and avoid
storing unusable stock at the Company’s warehouse.
In 2010, the economic benefit of implementing only
one Single Minute Exchange project in the Company’s
bottling room during one peak season month totaled
RUB 30 million. Streamlining production flows, reducing
losses from stock and materials and increasing production
rates and the performance of bottling lines under projects
ensured significant cost saving.
“Your Idea Works!”
The “Your Idea Works!” project is three years old.
The project is designed to search for and implement
ideas suggested by Baltika’s employees. The goal of the
project is to implement production process improvements
which do not require global changes and/or investments.
During the reporting period, the number of ideas received
from corporate employees exceeded 400. In the mediumterm,
potential savings from the suggested ideas could
total approximately RUB 80 million per year.
“Business Excellence Fund”
In 2010, the “Got an Idea!” motivational program for the
sales department was further developed to become the
“BEF” or “Business Excellence Fund.” This program
collects the best ideas suggested by the Company’s
employees related to implementing new standards
of brand activation at points of sale, that are suitable for
subsequent integration into daily practices.
“The Master of Planning”
A cross-functional automatic system called “The Master
of Planning” is used within the framework of the
Company’s initiative to upgrade operational efficiency. The
system distributes volumes among branches based on
forecast demand and numerous other factors, including
supply, production, logistics and sales. “The Master
of Planning” allows costs related to the purchase of raw
materials, production and product delivery along the entire
supply chain to be optimized.
Investments
In 2010, total corporate
investments stood at
RUB 2.9 billion.
Major investments were channeled
at launching and supporting new
products, commercial infrastructure
and information technologies
improvements and were targeted
at efficiency upgrading and cutting
costs. Investment projects included
constructing new grain storage
and renovating the existing one,
as well as numerous environmental
projects. The project for inhouse
water supply provisions
(artesian drinking water) at the
Company’s facility in Yaroslavl
was implemented, thus enabling
the Company to reduce costs and
to start the production of the new
product — Zhivoy Ruchey drinking
water.
Constructing Grain Storage
in Khabarovsk
The Company began implementing
a project that involved constructing
a 3,200-ton grain storage facility
in Khabarovsk in 2010. In-house
facilities for malt and barley
storage will allow the Company
to upgrade grain quality control
and cut costs associated with
leasing third-party storage facilities.
Construction related to the
assembly and installation of silos
was wrapped up in 2010.