4. LEAD PERFORMANCE TO THE NEXT LEVEL

By using the Lean philosophy, the Scandinavian Tobacco Group factory in Assens, Denmark has dramatically improved its efficiency - and has added more value for the company and a better experience for consumers.

Troels Juul Mikkelsen never would have thought it possible for his factory to reach 70% efficiency. Now, the plant has not only surpassed that level, it could well reach 80% over the coming years.

This is thanks to efficiency improvements through the Lean business philosophy, which focuses on adding value and reducing waste in production processes and was launched at the factory in Assens, Denmark in the beginning of 2017. Then, it had an Overall Equipment Efficiency (OEE) rating of about 55% - the percentage of the total time the factory’s equipment was running without stops.

“By working with the different parameters of Lean, we’re now at 74%. In principle that is a large production increase of 28%, which is remarkable,” says Mikkelsen, Factory Leader Assens.

“The overall great benefits from Lean are that we have a safer workplace and we are lot more predictable with our delivery times and cost of produced products. We have fewer complaints, even though we produce more units per hour.”

Pitstop processes

The Assens factory won Scandinavian Tobacco Group’s High Roller of the Quarter award – which recognises a subsidiary, department, unit, brand, team or employee that delivered a strong performance – in the third quarter of 2019.

In September 2019, it reached a remarkable 98% OEE in one shift on one of its six packaging machines, with a mean time between failure (MTBF) in the range of 2.5 hours. So how are these remarkable efficiency improvements achieved?

Lean provides a structured way of working with efficiency, for example by describing processes and agreeing on a common way of working, which decreases the change over time on production lines. Now, it’s like a Formula 1 pitstop – almost automatic, with no need for discussions, because everyone knows exactly what to do.

Another part of the improvements is collecting data on which parts of the machines had the most breakdowns and making those the top priority. All of this is part of an overall, yearly plan of what the factory is doing and how best to use its resources for the most efficiency. This is monitored through weekly planning meetings.

“I’m very proud to be a part of this team – we could not do it by ourselves,” says Regitse Susse Jensen, Production and Lean Manager at Assens. “The culture here is very special – everyone is coming up with new ideas and it’s so nice to be here. It’s a pretty great place to work."

Common sense in a structured way

After the introduction of Lean, the factory was set a target of 68% OEE in 2018. Mikkelsen didn’t think it could be achieved, but they would take on the challenge and do their best anyway.

When the results came in, Assens had hit 69% - a notable contribution to Scandinavian Tobacco Group’s vision of becoming the undisputed, global leader in cigars and pipe tobacco.

“We were not aware that by working in a concentrated and data driven way, we could reach that,” Mikkelsen says. “Our goals keep going up and reaching the 80% mark sometime in the future is not impossible. I never believed it would be possible before we worked with Lean – it’s basically just common sense applied in a structured way and everybody should do it.”

Click here to find out more about Lean at Scandinavian Tobacco Group.

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