Increasing Labour Productivity Through Process Redesign
Launched in 2014, our client is the number one meal kit delivery company in Canada. The company employs more than 200 people across Canada.
Launched in 2014, our client is the number one meal kit delivery company in Canada. The company employs more than 200 people across Canada and currently has two processing sites, one in Etobicoke, Ontario, and another in Abbotsford, British Columbia, with their headquarters located in Toronto.
It offers its subscribers new menus to select from on a weekly basis. The company offers 14 menus divided into three product lines. Each menu is presented in either a family format which consists of a kit with four servings, a couple’s format which consists of a two serving kit, or a quick preparation format that takes 15 minutes or less to make.
Thanks to the training and coaching, the new process tested yielded a labour efficiency of 70 kits/man hour, a 26% improvement.
The new process also reduced the labour cost of each kit by 26% from approximately $3.93/kit to $2.92/kit.
Given that the company currently ships out approximately 4200 meals per week, this would save them more than $4000 per week, or $200,000 per year, a 23.5:1 ROI.
The organization struggles with their ability to process orders in a timely manner, with orders often being shipped a day later than planned. To address this, our consultants and the team had determined that the kitting process was the bottle-neck due to the low output compared to the required weekly demand. In order to meet the weekly demand of 1050 cases/week the kitting production line has to assemble approximately 4200 kits.
Currently, these are assembled in a four-hour period by 18 workers with a planned labour productivity of 58 kits/man hour to meet the demand. However, the kitting process was operating at only 52 kits/man hour, causing production to be carried into overtime and delaying the shipout process by a day and ultimately shipping of the product late.
Two employees attended three days of Lean training, then based on their training, led the Kaizen improvement event for the following two days, with an additional 25 staff involved. The project was focused on the production of the meal kits. During the ‘Go, Look, See’ exercise on the first day of training it became clear that there was a high degree of batching in the kitting process, creating inefficiencies throughout the plant. To tackle this problem, a mix of Plan, Do, Study, Act (PDSA), Process mapping, and Cell Design was used.
The PDSA was used as the testing methodology for the configuration of the new cell design. Then, the current state process was mapped, and the team created a future state map in which each worker made one complete kit rather than each person adding one item as the old process dictated. The testing design involved setting up four U-shaped cells where each cell operated as a contained unit with all ingredients necessary to make kit bags.
During the testing of the new kitting process cell design, the measures used were the number of kits per man-hour, the percentage of missing kit items, and the speed at which items were packed into kit bags. The test started with 20 workers, then dropped to 18 workers after noticing that there wasn’t enough activity for the extra two workers. The test ran for approximately two hours and the target was to make 2300 kit bags. Once the test was carried out and the data analyzed, it became clear that there was an improvement from the older process.