DMAIC "Catapults" Continuous Improvement at Hormel

DMAIC Methodology“Catapults” Continuous

Improvement

Hormel Foods

AgendaHormel Foods, Inc.

History of QIP Six Sigma

CIP Reinvigoration

Variation Tool – Catapult

Questions

Getting Started in 1891

Geo. A Hormel & Company Pork Packers and Provision Dealers

Founded in Austin, MN - 1891

Processed 610 hogs in the first year

$220,000 in sales

118 Years Later…….Fortune 500 CompanyOver 18,000 EmployeesOver 2,100 Food

productsOver 350 TrademarksInternationally

recognizedProcess over 9.0 million

hogs annuallyProcess 1.23 billion

pounds of turkeys annually

Bacon • Pork • Shelf Stable Products Precooked Pre-portioned Chili Raw Precooked Corned Beef Hash Bits Flavored Stews

Always Tender Cooked Meats Ham Salsas/Sauces Smoked • Dry Sausage Asian Sauces Cooked Pepperoni (House of Tsang)

Genoa Salami SPAM Hard Salami

Turkey • Cooked Beef Whole Further Processed • Bread Ready Meats

Core Competencies

Hormel Foods Corporation Retail Brands

RECENT ACQUISITIONSAlma Foods – Alma, KSCPC – Farmer John, Vernon, CALloyd’s BBQ – Mendota Heights, MNMark-Lynn Foods – Bremen, GAMexican Accent – New Berlin, WIProvena Foods – Lathrop, CASaag’s – San Leandro, CAValley Fresh – Turlock, CA8 CO-PACKERS -

All Hormel Manufacturing, Distribution Center & Co-packer Locations (142)

JOTSJOTS – Barron, WIJOTS – Faribault, MNJOTS – Melrose, MNJOTS – Montevideo, MNJOTS – Pelican Rapids, MNJOTS – Willmar, MN2 CO-PACKERS -

SPECIALTY FOODSCFI – Sparta, WIDCB – Bondurant, IADCB – Mitchellville, IADCB – Perrysburg, OHDCB – Savannah, GADCB – Visalia, CAHHL – Quakertown, PA22 CO-PACKERS -

HORMELAlgona, IAAtlanta, GAAustin, MNBeloit, WICCPC - Aurora, ILDold Foods - Wichita, KSFremont, NEFort Dodge Foods - Fort Dodge, IAKnoxville, IAOsceola Foods - Osceola, IARochelle Foods - Rochelle, ILStockton, CA

DAN’S PRIZE SUBSIDIARYDan’s Prize – Browerville, MNDan’s Prize – Long Prairie, MN

71 CO-PACKERS -

Campbell Soup

Macphie

Herdez

Du Breton Farms

Carapelli

Pelopac

DISTRIBUTION CENTERSAtlanta, GALSI – Eldridge, IAOsceola Foods - Osceola, IAPower Logistics – Dayton, OHPrism – Stockton, CA

Hormel Alimentos Hormel Alimentos S.A.MexicoS.A.Mexico

Blue RibbonBlue RibbonPanamaPanama

Tulip Ltd.Tulip Ltd.

DenmarkDenmarkBeijing Hormel Foods Co., Ltd. ChinaBeijing Hormel Foods Co., Ltd. China

Shanghai Hormel Foods Co., Ltd. ChinaShanghai Hormel Foods Co., Ltd. China

C.J. Corp. KoreaC.J. Corp. Korea

AustraliaAustralia

Purefoods-HormelPurefoods-Hormel PhilippinesPhilippines

San Miguel Hormel VietnamSan Miguel Hormel Vietnam

International Partners

Okinawa Hormel, Ltd.Okinawa Hormel, Ltd.

AGENDA - Continued

Hormel Foods, Inc.


CIP Reinvigoration


Questions

“We should all go to our posts of duty daily with the feeling the work can be done still a little bit finer, a little bit better than we are doing it.”

- George A. Hormel

Hormel - Heritage

Fourteen principals of quality (simplified to six in 2008)

Quality Improvement Teams at each Plant location

Education & Training

5 Fundamentals of quality management(next slide)

Quality Improvement Process (QIP) - 1986

Five Fundamentals of Quality

ManagementThe five fundamentals every employee must know and understand:

1 - Definition of quality is conformance to customer requirements 2 - System of quality is prevention and continuous

improvement 3 - Performance standard is zero defects 4 - Measurement is price of nonconformance (PONC) 5 - All work is a process (process optimization)

QIP Process – early 2000’s

Established QIP - Quality Improvement Process

Plant specific issues: Productivity, Quality, Yields,

SafetyCommunications, Employee

Morale

But… we wanted more!

Objective – Continuous

Improvement

Compliment to existing QIP efforts. not replace it

Provide a method for a systematic analysis and improvement of key business processes.

facts and data – not emotion Be the best we can be in every business process.

important to the Customer Target projects that will have substantial favorable financial impact.

major consideration for project selection

QIP Steering Committee - Research- Six Sigma was getting a lot of attention- Success by other companies/industries- Business publications, consultants- Benchmarked with other companies

Began the Process in 2002:- Selected the Juran Institute as consultant- Juran spent 1 day with executives (approval)

- Juran started certification process for BB’s

Objective – Continuous

Improvement

Roles and Responsibilities:Champions (34)QIP Steering CommitteeBlack BeltsTeam Member ExpertsAd-hoc team members

Six Sigma - Corporate Deployment


Process Champion submits project ideas

Steering Committee selects projects.

Projects are assigned to “Black Belts”

Cross-functional “Team Member Experts”

D M A I C PROCESSDefine, Measure, Analyze, Improve, Control

Deductions

RF SKU Rationalization

Master Records

Deduction Resolution

Foodservice Pricing

Damage & Unsaleables

Forecasting

R&D NPD

Pre-cooked Bacon

G.P. SKU Rationalization

Procurement and A/P

Project Enterprise

Turkey Improvement - JOTS

Order Processing

Freight & Warehouse

Bracket Pricing

Broker Utilization

Pallets Analysis

JOTS - Livability

Foodservice Pricing

Label Verification

CPS Work Load Model

Pepperoni Cupping

Dubuque Data Collection

R&D Lab Services

Inventory Reduction

Tray Optimization

Austin Blues - Pulled Chicken

GP Foreign Material

CFI Cost Reduction


Complete Project List

TransactionalAdministrative

Operational

Completed

YTD Accumulated Projects

2003 4,554,990$ 4,554,990$

2004 3,471,606$ 8,026,596$ 2

2005 3,385,219$ 11,411,815$ 2

2006 2,396,223$ 13,808,038$ 5

2007 11,562,647$ 25,370,685$ 7

2008 11,279,409$ 36,650,094$ 5

2009 1,180,276$ 37,830,370$ 0

TOTAL 36,650,094$ 21


Six Sigma Scorecard

Bill SnyderSenior Vice President of

Supply Chain

Rod KekkonenDirector of

I.E.

55 IE’s25 Plants

6 Corp. Staff IE’s

7 Co. CertifiedBlack Belts

Bryan FarnsworthV.P. of

Quality Management

11 Co. Staff QC Eng.


Bill SnyderSenior Vice President of

Supply Chain

Scott ChristensenDirector of

I.E./Six Sigma

55 IE’s25 Plants

1 Co. IE Mgr.6 Co. Staff IE’s

7 Co. CertifiedBlack Belts

Six Sigma - Corporate Deployment (2008)

AGENDA - Continued

Hormel Foods, Inc.


CIP Reinvigoration


Questions

Catapult Firing

Mission/Vision/Values= Our Way

CEO – Jeff Ettinger: “Over the past 10 years, the size of our team has

nearly doubled, and we have begun to grow internationally as well. Our growth has provided us an opportunity to refresh our mission and remind everyone how we strive to do business at Hormel Foods.

This new program, called Our Way, is a clear, systematic and straightforward way to show our priorities and how we operate. Our Way represents a vision for the future as we continue to grow our heritage.”

Principles Brand

charity programming (like Komen)

Community investments

Educational giving

Hunger work

Major gifts (Hormel Institute)

People Code of

conduct Diversity Employee

wellness programming

Safety Training and

employee benefits

Products Food

quality Food

safety Health and

wellness brand programs

Performance Corporate

governance Financial

sustainability (innovation pipeline)

Process Air quality

efforts Animal

welfare management

Energy use reduction

Solid waste and recycling

Water use reduction & system protection

Corporate Reporting

Responsibilities

DMAIC RELIABILITY

Safety SQM CIP OEE Yields

Productivity Environmental Sustainability

Leveraging a Continuous

Improvement Culture

Don’t have time for all of this, I need to focus on my job !

Where do we apply our resources – only have so much time and so many people !

Don’t need more, need focus on what we have !

Is this just the same old QIP, but now called CIP ?

I’ve got Reliability, how does CIP fit into this initiative ?

We already have goals and objectives which drive our efforts !

What’s the FIT?

The Continuous Improvement Process:

CIP is not an additional or separate initiative.

CIP is a way of bringing our processing objectives together in one focus.

The FIT is…….

CIP Competencies

1 - Teamwork

2 - Setting Goals and Objectives

3 - Problem Solving – DMAIC Process

4 – Team Recognition

I. Teamwork Guidelines

II. Meeting Mechanics

III. Team Leader Role

IV. Team Member Role

1 - Teamwork

Company-Wide Goals5, 10, 2-12, <1, <3.5%

Division

Department

Team Goals

Vision

Priority

CIP

Personal Objectives

2 - Setting Goals and Objectives

Goal: Develop DMAIC problem solving competency at the plant locations.

Conducted three – two day sessions

Trained 50 employees

Working on 40 improvement projects

3 – Problem SolvingDMAIC Process


Define: Define project and who will work on it

Measure: Present Performance and possible causes of performance levels

Analyze: Identify key process problems

Improve: Optimize process performance

Control: Hold the gains

Six Sigma Methodology (DMAIC)


Define: Project Charter, SIPOC, Process Mapping, VOC, CTQ’S (critical to quality),

Measure: Y & X’s, Micro Mapping, Data Collection Plan, Graphing, Six Sigma Defect Rate

Analyze: FMEA, Hypotheses Tests, Question ‘Who, What, Where, and How ’, Data Validation, GOYA

Improve: Solutions - establish alternatives, Assess Risk, Design of Experiments, Simulations

Control: Implementation of Solutions, Time Lines, Savings, Feedback to Project Owner’s, SOP’s, Measurement

Six Sigma Methodology (DMAIC Tool Box)

Select Project

DefineProject Scopeand Size

Measure Analyze

Problem Cause Map

Improve Control

SolutionsSmall Problem

Utilize Task Force“RCA”

Small ProjectPersistent

Team Needed DMAIC Used

Large ProblemChronic Problem

Impacts Plant Cross-Functional Team

DMAIC Used

Measure Analyze Improve Control



Methodology:Plant Managers Select Projects & ParticipantsParticipants Research & Collect Project InformationAttend Training & Apply DMAIC ToolsPlant Managers Schedule Monthly UpdatesMonthly Six Sigma Team Conference Calls with ParticipantsDocument Project ProgressComplete Projects in Six MonthsDebrief ProjectsStart a Second Project in 2009Serve as a Problem Solving Resource, 2009

Best of the Best 2009 Project Recaps Include DMAIC

4 – Team Recognition

Goal: Linkage to the “BOB”(BOB - Best of the Best)

Application to CIP competencies Connect to Corporate initiativesRecognition of winners

+ 400 projects at Plant levelSelect Enterprise Winner

Agenda

Hormel Foods, Inc.


CIP Reinvigoration


Questions

(1) PROCESS FLOW (PF) or PROCESS MAP

(2) CUSTOMER DRIVEN CAUSE AND EFFECT (CE)

C= Constants SOPs

N= Noise

X= Experimental

C= Constants SOPs

N= Noise

X= Experimental

Output(s)and

SpecsHow What Who

- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -

How What Who- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -- - -

How To Reduce Variation & Turn

An Art Into Science

Process Flow Gas Mileage Driving to Work

Process Flow - Catapult

StartSet the

rubberbandPull back to177 degrees

Measuredistance and

recordRetrieve Ball

Hold down the catapult

Set the ball in the cup

Release

Cause & Effect Gas Mileage Driving to

WorkMEASUREMENTMEASUREMENT

GAS MILEAGE

Gage forTire Press.

Ride Brakes

Wind

Temperature

Humidity

A B

A B

Auto

Manual

Radial

All WX

Flat

Mou

ntai

ns

METHODMETHOD MACHINEMACHINE

SpeedometerType

Estimate ofFull Tank Maint. Sched.

Fast Start

Tire Rotation

Tune-Ups

Engine Warm-Up Time

Carburetor

Tire Press.

Weight

Air Conditioner

Transmission

Tire Type

Radio

Regular

PEOPLEPEOPLE MATERIALSMATERIALS ENVIRONMENTENVIRONMENT

DriverTraining

Gas Type

Driver

# ofPassengers

Oil Type

Fuel Additive

Highway or City

Terrain

Weather Conditions

Front or Rear Drive

Precipitation

IceSnowRain

Alti

tude

Cause & Effect - Catapult

Distance

Method People

Measurement Material

Machine

Environment

Continuous Improvement

Process

Catapult Questions?

AgendaHormel Foods, Inc.


CIP Reinvigoration


Questions


Methodologies Scientific Management Shewart’s Control Charts TQC JTQM Deming Prize QC Circles Juran Trilogy Lean (TPS) TPM Zero Defects

Industrial Engineering Six Sigma/DMAIC TQM MBNQA ISO BPR Workout Process Management Balance Scorecard DMADV Reliability/RCA


Deployment Criteria

1.) Top Down Commitment2.) Linkage to Co. Goals and Strategy3.) Personnel selection and training4.) Common Methodology5.) Project Selection “scope”6.) Financial budgeting and auditing7.) Project reviews and tracking8.) Communication and recognition

DMAIC "Catapults" Continuous Improvement at Hormel

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