How a $3 Billion Packaging Company saw a 15:1 ROIDownload the Full Case Study
How a $3 Billion Packaging Company saw a 15:1 ROI
Packaging-Product Plant Implements the Milliken Performance System
Plants in the paperboard and packaging industry face challenging customer requirements — from companies that use these products directly and those that convert paper stocks into other goods — as well as regulatory and financial pressures. The commodity nature of the business makes continuous improvement a must.
This $3 billion packaging-products manufacturer manages more than 200 plants and 10,000 employees worldwide, with a mix of both union and non-union workforces. In business for 75 years, the company makes roll stock for converting operations and flexible printing and plastics, primarily for the food industry. The manufacturer contracted with Performance Solutions by Milliken in 2009, and our practitioners now assist in 27 different locations, primarily in North America.
This client faces a changing customer environment common in many industries: smaller orders, smaller run sizes, and increased complexity due to customization. For many of this company’s customers, packaging must change by season, product type, and marketing strategy.
The client was operationally excellent before Performance Solutions arrived, but executives there sought to raise the bar with continuous improvement to achieve sustain profitable growth.
“We’re building off what they already have in place,” says Doug Skaggs, a Performance Solutions practitioner who works with a dozen of the client’s plants, “taking them to a world-class level.”
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Of particular concern were issues with common production problems, including poor machine uptime, excess product rework, slow equipment changeovers, high employee turnover, and legacy safety processes driven by managers rather than associates. “There were a lot of gaps in the way they managed downtime situations,” says Skaggs. “They lacked standardization around both the work itself and how they trained associates.”
The client has earned an overall 15 to 1 return on investment (ROI) with Performance Solutions. A manufacturer’s current condition prior to an engagement is reflected in the ROI. Some client engagements with Performance Solutions have earned returns as large as 37 to 1; no engagement has returned less than 7 to 1.
Examples of performance improvements at the packaging-products manufacturer, based on a summary of plants that have reached Phase 3, include:
- Breakdown performance improvements from 60 to 70 percent
- Minor stops reduced by 50 to 60 percent
- Rework reduced by 50 percent
- Waste reduced by 80 percent
- Equipment changeover times reduced by 50 to 60 percent.
“Changeover times have been reduced so much, they didn’t have to add another day to their plant schedule. They’re down to a five-day week,” adds Skaggs.
The client plants are continuing their implementations, and eventually all the facilities engaged with Performance Solutions will demonstrate that MPS is now their operating system and the way they manage. Progress is tracked through a detailed scorecard that measures MPS sustainability along with metrics specific to the organization. The aggregated tally of a scorecard triggers movement for a plant from Phase 2 to Phase 3, and decreases the frequency of Performance Solution practitioner visits — a process well under way at this client.