Improving blockade analysis at the packaging department of Heineken Zoeterwoude

Delft University of Technology

FACULTY MECHANICAL, MARITIME AND MATERIALS ENGINEERING

Department Marine and Transport Technology Mekelweg 2 2628 CD Delft the Netherlands Phone +31 (0)15-2782889 Fax +31 (0)15-2781397 www.mtt.tudelft.nl

This report consists of 69 pages and 23 appendices. It may only be reproduced literally and as a whole. For commercial purposes only with written authorization of Delft University of Technology. Requests for consult are only taken into consideration under the condition that the applicant denies all legal rights on liabilities concerning the contents of the advice.

Specialization: Production Engineering and Logistics

Report number: 2013.TEL.7773

Title:

Improving blockade analysis at

the packaging department of

HEINEKEN Zoeterwoude

Author:

J.B.L. Schornagel

Title (in Dutch) Het verbeteren van blockade analyze bij de verpakkingsafdeling van HEINEKEN Zoeterwoude

Assignment: Master thesis Confidential: No

Initiator (TU Delft): Dr. ir. H.P.M. Veeke Initiator (HEINEKEN): Mw B. de Winter MBA Supervisor: Dr.ir. H.P.M. Veeke

Delft University of Technology

FACULTY MECHANICAL, MARITIME AND MATERIALS ENGINEERING

Department Marine and Transport Technology Mekelweg 2 2628 CD Delft the Netherlands Phone +31 (0)15-2782889 Fax +31 (0)15-2781397 www.mtt.tudelft.nl

Student: J.B.L. Schornagel Assignment type: Master thesis Supervisor (TU Delft): Dr.ir. H.P.M. Veeke Creditpoints (EC): 35

Supervisor (HEINEKEN) Mw B. de Winter MBA Specialization: PEL Mw S. Schermer-Santi

Malnis MSc.

Report number: 2013.TL.7773

Professor Prof.dr.ir. G. Lodewijks Confidential: Yes

until May 8, 2018

Subject: Improving blockade analysis at the packaging department of HEINEKEN Zoeterwoude

Packaging at HEINEKEN Zoeterwoude

The HEINEKEN brewery at Zoeterwoude is one of HEINEKEN‟s biggest breweries and mainly produces large orders for the export markets. Within the brewery, the Packaging department is responsible for packaging all the beer that is produced. To perform Quality Control, the operators of the packaging lines take samples with fixed time intervals to determine whether production proceeds accoding specifications. A non-conforming sample will make all products that passed the line since the last sample suspicious and is referred to as a blockade that is inhibited from leaving the brewery until the Technology and Quality department has analyzed the blockade and determined what to do with it.

Problem statement

In the past years, HEINEKEN Zoeterwoude has aimed to decrease the number of blockades. However, management feels that reducing the disturbances that each blockade causes for its operations has not been properly addressed. Although lead times of blockade analysis are not measured, general belief is that they increased, causing disturbances for the other departments. Future employee reductions at HEINEKEN Zoeterwoude will cause that fewer people are able to analyze blockades and deal with their disturbances Therefore management would like to investigate possibilities for improving performance regarding blockade analysis.

Problem definition

At the moment many processes remain without standards, which causes inconsistent handling, long lead times and requires all blockade analyses to be checked extensively before subsequent action is

undertaken. The deliberation of financial consequences of the subsequent action is poorly integrated in the process of blockade analysis and system control is lacking.

Assignment

Analyze the process of blockade handling at the Packaging department at HEINEKEN Zoeterwoude and find ways to improve this process according to the Delft Systems Approach.

Execution

 Analyze the current processes according to the Delft Systems Approach  Analyze relevant data related to blockade analysis

 Establish the relevant problem areas and map all accompanying problems  Study relevant literature for Quality Control and blockade handling  Define the requirements and a framework for the design

 Design system control to control the various processes concerned with blockade analysis  Define an implementation plan

Preface

This master thesis constitutes the completion of the master Production Engineering and logistics. The goal of the master thesis is for a student to demonstrate his or her ability to individually apply the systematic approach of modeling operational organizations, as taught during this master.

The research assignment of this thesis was performed at the Packaging department of HEINEKEN Zoeterwoude and was conducted between July 2012 and April 2013. The subject of the research assignment was closely related to the concept of quality and how a company aims to conform to and deal with this abstract property. This research also provided a valuable opportunity to learn about packaging processes, Quality Control and the various opportunities, challenges and deliberations that modern industrial companies face in this domain.

I would especially like to thank my supervisors, dr.ir. H.P.M. Veeke and prof.dr.ir. G. Lodewijks from the Delft University of Technology for their valuable guidance, advice and feedback during the realization of this thesis. Their feedback was very helpful for keeping the main outline of the research in perspective. I would also like to thank the employees at HEINEKEN Zoeterwoude, especially my supervisors at the company, Belinda de Winter and Solange Schermer-Santi Malnis, for their engagement in this project and their time and effort to explain the workings of the company in detail.

I am very grateful for the support I got from my parents and my friend Anne during this research and for their feedback and opinions.

Amsterdam, April 2013

Summary

HEINEKEN Zoeterwoude is the biggest brewery in Europe, responsible for producing Amstel and Heineken, mainly for the export markets. All the beer, packed at the packaging department is subject to strict food regulations and HEINEKEN has additional requirements to meet the customers‟ expectations. Therefore, Quality Control, which makes sure that only conforming products are delivered, is an important aspect of the packaging process. Quality Control is performed by taking samples with fixed time intervals according to a sample plan. If a sample is nonconforming, all products since the last conforming sample are referred to as a blockade, inhibited from shipment and analyzed to evaluate if products can be released or must be reworked, inspected or destroyed.

HEINEKEN focuses on continuous improvement to prevent blockades from occurring. In the coming years HEINEKEN will decrease its workforce, reduce warehouse capacity and shorten its delivery planning, amplifying a blockade‟s impact. This research will address minimizing the impact of blockades once they occur by focusing on blockade analysis. The goal of this thesis is to examine the process of blockade analysis at the Packaging department and find ways to improve it. The concepts of the Delft Systems Approach are used to analyze and redesign the system accordingly.

The qualitative analysis indicated the first main problem to be function control. The initiating function does not set standards for the executing processes related to blockade analysis. This hinders consistent analysis and wastes labor. Due to this obscurity, each analysis is checked by two people, which adds to the lead times. It was also found was that performance measurement by the evaluating function is inadequate. Only complaints and field observations are used to assess effectiveness. The second main problem was the absence of process control. As a result, there is no structured way to balance the workload and long lead times cause some blockades to delay shipments or to exceed the products‟ expiry date.

The sample plan was identified as the third main problem. In the last 5 years, 88% of all blocked products could be released. When the sample plan was examined, it was found that in the last 5 years, it had remained virtually the same in terms of the types of procedures, sample points, tolerance limits and time intervals. The high released rate indicates that the sample plan is not performing properly and should be evaluated.

The first two main problems, i.e. the lack of function control and process control were considered within the scope of this research. As the sample plan is primarily concerned with blockade detection and not with blockade analysis, this was found to be outside the scope of this research and not elaborated upon any further.

The Innovation model was chosen to set new standards for the system, because it is an iterative conceptual model and has the flexibility to be translated to fit this purpose.

Before redesigning the system, it was evaluated from a strategic perspective, which revealed that blockade analysis is only feasible because the majority of blocked products can be released, thus surpassing the cost of analysis. If release ratios drop, HEINEKEN should reconsider whether blockade analysis is worthwhile.

When setting standards for the input filter, it was found that there were no filter standards set for blockades‟ size. Calculations indicated that the costs of analyzing blockades smaller than 5 pallets surpassed the retained products‟ value. Therefore blockades under 5 pallets are ordered to be destroyed, preferably immediately on the packaging lines.

Implementing standards for information gathering, advice formulation and checking of the blockade analysis, revealed that when the nonconformity of a blockade is non-critical, often occurring and can be assessed objectively, decision-making should be standardized and delegated to the employees who perform the analysis, so that lead times can be reduced. Together with the stakeholders of the process 4 types of blockades that met these requirements were standardized according to the Innovation model.

It was also found that taking samples from blocked warehoused products with predetermined intervals will minimize the average required number of samples, but also allow warehouse personnel to anticipate on which pallets are required, so that retrieval is less time-consuming.

A decision model was created to support decision-making when choosing between inspection or destruction of blocked products, based on an estimated nonconformity ratio of these products. For performance measurement and evaluation, lead time measurements are paramount . Together with the stakeholders of the process, lead time measurement was implemented along with targets. Process control is designed to control two aspects of the system; resource allocation and lead time. Balancing and limiting the amount of work in progress for the different resources of the system, will reduce lead times according to Little‟s theorem. Resource allocation will also indicate in an early state when the workload becomes too high so that intervention is required. Lead time control is designed to prevent delayed shipments and exceeding the expiry date. This is achieved by incorporating the required processing time and an added margin. According to these milestones, a blockades‟ priority can be increased and an employee is notified.

Using the Prevention, Appraisal and Failure (PAF) model, the internal failure cost was calculated. If the lead time could be reduced by 50% and exceeding the expiry date could be prevented, this could potentially have saved 22% on the total internal failure cost in 2012.

In the short term it would be beneficial to destroy small blockades, as this would reduce the workload with 14%. The time savings should be used to implement the other redesign elements.

Finally, it is recommended to analyze blockades from the perspective of the sample plan on the packaging lines. Preventing the occurring of defects, but also the occurrence of blockades that are found to be conforming after analysis is better than optimization of blockade analysis. Therefore the sample plan should be made a dynamic sample plan that incorporates historical data of blockade occurrence. Optimizing the sample plan could reduce the number of blockades and/or save labor expenses.

It is also advisable to investigate the disturbances of blockades further down the supply chain, as the effects of delayed deliveries on the supply chain and the results of these delayed deliveries of HEINEKEN‟s customers due to blockades are currently unknown.

Samenvatting

HEINEKEN Zoeterwoude is de grootste brouwerij van Europa, verantwoordelijk voor het produceren van Amstel en Heineken, voornamelijk bestemd voor de export. Bier is onderhevig aan strikte voedsel- en warenwetgeving en HEINEKEN heeft daarnaast zelf ook eisen met betrekking tot kwaliteitsperceptie. Daarom heeft kwaliteitscontrole, wat waakt voor het leveren van enkel kwalitatief goed product, een belangrijke plaats in het verpakkingsproces. Kwaliteitscontrole wordt gerealiseerd door volgens een keurplan monsters te nemen. Is een monster niet conform de specificaties, dan worden alle producten sinds de laatste monstername gelabeld als een blokkade en geanalyseerd voordat men besluit of ze vrijgegeven kunnen worden of dat herbewerking, inspectie of vernietiging noodzakelijk is.

Om blokkades te voorkomen focust HEINEKEN op methodes om continue te verbeteren. In de toekomst zal HEINEKEN het personeelsbestand verkleinen, opslagcapaciteit en orderduur terugbrengen, wat de nadelige gevolgen van blokkades zal vergroten. Dit onderzoek zal zich richten op het terugbrengen van deze gevolgen door het analyse proces in ogenschouw te nemen. Het doel van deze scriptie is om het analyse proces te onderzoeken en verbetermogelijkheden te lokaliseren. Analyse en herontwerp zullen geschieden volgens de concepten van de Delftse systeemkunde. De eerste bevinding van de kwalitatieve analyse is dat de functiebeheersing ontoereikend is. De initiërende functie is niet in staat werkzame normen voor de uitvoerende processen af te geven, wat nadelig is voor de consistentie en efficiënt gebruik van middelen. Mede hierdoor wordt iedere analyse door twee medewerkers gecontroleerd wat de doorlooptijd verlengd. Tevens worden er onvoldoende prestatie indicatoren geëvalueerd welke indiceren in hoeverre de doelen van het systeem volbracht worden. Enkel consumentenklachten en veld observaties worden gebruikt om de effectiviteit vast te stellen, echter worden andere proces criteria niet gemeten en geëvalueerd.

Een tweede probleem is het ontbreken van procesbeheersing. Er is geen gestructureerde wijze waarop middelen gebalanceerd worden toegewezen aan de werklast en het gebeurt soms dat blokkades de geplande transport- of houdbaarheidsdatum van het product overschrijden.

De derde bevinding, volgens de kwantitatieve analyse is het gebruikte keurplan. Sinds 2008 is 88% van de geblokkeerde producten vrijgegeven, waarbij opgemerkt dient te worden dat het zelden voorkomt dat een blokkade niet conform de eisen van het keurplan gemaakt wordt. Nader onderzoek wees uit dat het keurplan de afgelopen 5 jaar niet is aangepast wat betreft procedures, monsterpunten, toleranties en intervallen. De hoge hoeveelheid vrijgegeven product geeft aan dat aanpassing noodzakelijk is.

De eerste twee bevindingen, een tekort aan functie- en procesbeheersing vallen binnen het probleemgebied van dit onderzoek. De derde bevinding die betrekking heeft op het keurplan is vooral gerelateerd aan de detectie van blokkades en zal dus niet verder behandeld worden.

Het Innovatiemodel is een iteratief conceptueel model, wat flexibel is zodat het kan worden gebruikt om standaarden voor het systeem te definiëren.

Voorafgaand aan het herontwerp is het systeem vanuit een strategisch perspectief geëvalueerd. De bijdrage van het analyseren van blokkades aan de omgeving berust op het feit dat de opbrengsten van blokkades opwegen tegen de offers, veroorzaakt door het hoge percentage vrijgegeven product. Bij een significante verandering van deze verhouding moet blokkade analyse worden heroverwogen. De normen van het invoerfilter bevatten geen eisen t.o.v. de grootte van blokkades. Berekeningen gaven aan dat de analyse kosten van blokkades kleiner dan 5 pallets hoger zijn dan de opbrengsten. Het advies is om blokkades kleiner dan 5 pallets te vernietigen en dit besluit op de lijn zelf te nemen. Tijdens het vaststellen van normen voor informatievergaring, advisering en het uitvoerende filter, werd gevonden dat door deze processen te standaardiseren, de controlerende functie deels gedelegeerd kan worden naar personeel verantwoordelijk voor het maken van de analyses, wat gunstig zou zijn voor de doorlooptijden. In samenspraak met de belanghebbenden van het proces is de analyse van 4 typen blokkades gestandardiseerd en geïmplementeerd.

Door het bemonsteren van opgeslagen blokkades volgens vaste procedures te laten verlopen is te voorspellen welke pallets hiervoor nodig zijn en kan het magazijnpersoneel de pallets apart zetten, waardoor het bemonsteren van blokkades minder tijdrovend wordt. Daarnaast is berekend hoe dit proces zo efficiënt mogelijk kan verlopen m.b.t. de intervallen.

Om de juiste beslissing te nemen ten aanzien van het inspecteren of storten van een blokkade is een beslismodel gemaakt wat, op grond van het geschatte defectpercentage aangeeft welke voorkeur verdient.

Om prestatie evaluatie te verbeteren is het vooral belangrijk om doorlooptijd meting toe te voegen. In samenspraak met de belanghebbenden zijn prestatie indicatoren opgesteld en geïmplementeerd. Procesbeheersing is ontworpen om twee aspecten van het systeem te beheersen; de doorlooptijd en werklastbeheersing. Door de werklast te balanceren, kan volgens de theorie van Little de doorlooptijd beheerst worden. Hierdoor is men tevens in staat om tijdig te signaleren dat het systeem de hoeveelheid werk niet aan kan. Doorlooptijdbeheersing is bedoeld om te voorkomen dat blokkades hun lever- en houdbaarheidsdatum overschrijden. Dit wordt bereikt door het geven van prioriteiten die rekening houden met de procestijden en marges waarbinnen de analyse plaats kan vinden.

Middels het Preventie, Acceptatie en Faal (PAF) model zijn de interne faalkosten van blokkades berekend. Een doorlooptijdreductie van 50% in combinatie met het voorkomen van overschrijding van de houdbaarheidsdatum levert in 2012 een potentiele besparing van 22% van de totale kosten op. Op de korte termijn is het wenselijk om kleine blokkades te vernietigen en één uitvoer filter te gebruiken. De werklast vermindert hierdoor met 14% en de vrijgekomen tijd kan gebruikt worden om de overige elementen van het herontwerp te implementeren.

Het is aanbevolen om het keurplan te herzien. Hierdoor kan het aantal blokkades sterk worden teruggebracht en of kan er veel arbeidsbesparing op de verpakkingslijnen worden gerealiseerd. Het voorkomen van blokkades is gunstiger dan het optimaliseren van blokkade analyse. Het is mede aan te raden ook te onderzoeken wat de effecten zijn van blokkades verderop in de keten. Momenteel is onduidelijk wat de gevolgen zijn van verlate leveringen voor de keten en uiteindelijk de klanten.

List of symbols

System boundary

Information flow

Valve

Encoding function

Material flow

Function or process

Buffer

Filter (left), with add-the-missing function (right)

Measurement function (left), intervention function (right)

Decoding function

List of abbreviations

CS&L Customer Service & Logistics

DSA Delft Systems Approach

EBI Empty Bottle Inspector FBI Full Bottle Inspection FIFO First In First Out

FTE Full Time Employee

FTR First Time Right

HACCP Hazard Analysis and Critical Control Points

HNS Heineken Nederland Supply

JPC Justified Product Complaint KPI Key Performance Indicator

MDM Market Demand Management

MES Manufacturing Execution System NPI New Product Introduction

OPI Operational Performance Indicator

OPI NONA Operational Performance Indicator No Order No Activity

OTIF On Time In Full

PDCA Plan Do Check Act

PI Performance Indicator

QA Quality Assurance

QBDA Quality Breakdown Analysis

QC Quality Control

QI Quality Improver

RM Rayon Manager

SKU Stock Keeping Unit

T&Q Technology & Quality

TL Team Leader

TPM Total Productive Management

TQM Total Quality Management

VSM Value Stream Map

WIP Work In Progress

Table of contents

Preface ... i

Summary ... ii

Samenvatting ...iv

List of symbols ...vi

List of abbreviations ... vii

Table of contents ... viii

1 Introduction ... 1

2 Introduction HEINEKEN ... 2

2.1 HEINEKEN N.V. ... 2

2.2 HEINEKEN Zoeterwoude ... 3

2.3 Packaging at HEINEKEN Zoeterwoude ... 4

Part I:

Analysis ... 12

3 System analysis of handling blocked product ... 13

3.1 Research approach ... 13

3.2 Goals and objectives of the system ... 13

3.3 Qualitative analysis ... 14

3.4 Quantitative analysis ... 19

3.5 Main process criteria ... 24

4 Problem statement ... 27

4.1 Problem definition ... 27

4.2 Research assignment ... 27

Part II:

Redesign ... 28

5 Framework for redesign ... 29

5.1 Blockade handling from a strategic viewpoint ... 29

5.2 Redesign requirements ... 29

6 Function control ... 30

6.1 Initiating function... 32

6.2 Evaluating function ... 40

7 Process Control ... 44

7.1 Lead time control ... 44

7.2 Resource control ... 48

8 Financial consequences ... 51

8.1 Quality related cost in perspective ... 51

8.2 Blockade costs ... 52

9 Implementation ... 55

9.1 Kaizen – Analysis and decision making standards ... 55

9.2 Kaizen – Measuring and setting Performance indicators ... 58

9.3 First results from implementation ... 62

9.4 Implementation plan ... 63

10 Conclusions and recommendations ... 66

10.1 Conclusions ... 66

10.2 Recommendations ... 67

References ... 68

Appendices ... 70

Appendix A Paper ... 71

Appendix B Total Productive Management ... 77

Appendix C Organizational structure HNS and CS&L ... 80

Appendix D Order handling and supply chain ... 82

Appendix E Layout of packaging department and CS&L ... 83

Appendix F Layout of a packaging line... 84

Appendix G Automatic and manual detection... 86

Appendix H Effects of blockades ... 88

Appendix I QBDA process ... 90

Appendix J Developments at HEINEKEN ... 91

Appendix K Rich picture ... 96

Appendix L Data filter for blockades ... 98

Appendix M Lead Time analysis of blockades ... 99

Appendix N Conceptual steady-state model ...100

Appendix O Kaizen format at HEINEKEN ...101

Appendix P PI: Average lead time ...103

Appendix Q PI: OTIF percentage blockade analysis ...105

Appendix R Financial analysis of blockades ...107

Appendix S Decision models ...112

Appendix T Documentation Template ...121

Appendix U Further specifying lead times ...123

Appendix V TQM ...125

1

Introduction

HEINEKEN Zoeterwoude is the largest brewery in the world, owned by HEINEKEN N.V. As beer is subject to food safety regulations, Quality Control is a major aspect of the packaging process. Apart from automated in-line detection, manual sampling is done to detect nonconformities and block all nonconforming products from being delivered to the customer. These portions of products are referred to as blockades. As on an annual basis blockades represent a large amount of product, HEINEKEN does not destroy blocked products right away, but performs analyses to discover whether the product is still safe to be released to the market. If not, reworking a blockade or manually filtering out the nonconforming products can be options. If all other alternatives fail, the product is destroyed. Blockades cause impact many of the brewery‟s operations, a major part of HEINEKEN‟s supply chain and are responsible for waste, delayed shipments, disturbance, overhead and ultimately customer dissatisfaction as it diminishes delivery reliability.

Over the last few years HEINEKEN Zoeterwoude focused on the prevention of nonconformities to reduce blockade quantities. The Packaging Technology & Quality (T&Q) department‟s current belief is that although efforts are aimed at decreasing the number of blockades, minimizing each blockade‟s impact on the organization has not been properly addressed, nor are there any indications of improvement.

Within the T&Q department the following presumptions prevail regarding blockades:

 Lead time of the analyses are believed to have increased, although they‟re not measured  Shipments are frequently delayed as a result of the long lead times

 There is no structured standardized way to analyze blockades  An unnecessary amount of resources is required for the analysis

 There is much discontent between the various stakeholders involved with blockade handling

T&Q management would like to investigate whether and how blockade handling can be improved. Possible gains are reduced consumer risk, overhead, costs, disturbance for operations and logistics and in the end higher customer satisfaction. Above reasons have led to the formulation of the following research assignment:

Analyze the process of the of blockade handling at the Packaging department and find ways to improve this process

Section 2 will introduce HEINEKEN, the packaging process and blockades. Hereafter the research is split in two; Part I will discuss both a qualitative and quantitative analysis, concluding with a problem definition and Part II will elaborate further on the design assignment and end with the conclusions and recommendations. All relevant appendices will be mentioned when appropriate.

2

Introduction HEINEKEN

This section introduces the company HEINEKEN in section 2.1 and describes how HEINEKEN Zoeterwoude, is positioned within the global company in section 2.2. Section 2.3 elaborates on how the packaging department is organized and covers the packaging process. Sections 2.3.2 and 2.3.3 outline how Quality Control and Quality Assurance are performed.

2.1 HEINEKEN N.V.

The beginning of HEINEKEN dates back to 1864 when Gerard Adriaan Heineken acquires “De Hooiberg”, a small brewery in the center of Amsterdam. In 1886 Dr. Elion, a former disciple of Louis Pasteur, develops the renowned „Heineken A-yeast‟ that produces a clear lager that keeps longer and is still at the basis of Heineken beer today. The new beer is known for its quality and is called „Gentleman‟s Beer‟ as opposed to „Workman‟s Ale‟. When World War I is over, HEINEKEN focuses increasingly on export and in 1933, after 13 years of prohibition, HEINEKEN would be one of the first brewers to enter the US market. In the years that follow, the company experiences tremendous growth, combined with major takeovers, like the one of Amstel in 1986 and more recently, Asia Pacific Breweries in 2012.

Currently HEINEKEN N.V. is a global brewer, operating in 178 countries worldwide and employing over 70.000 people. It owns more than 250 brands and has 125 breweries in 71 countries. In 2012 HEINEKEN brewed a total annual volume of 171 million hectoliters, making it the third largest brewer in the world with an annual turnover of €18,4 billion and a net profit of €1,7 billion. Heineken is the most valuable international premium beer brand in the world, representing 17% of the total volume sold by the company (HEINEKEN, 2012). Note that the capital HEINEKEN refers to the company while Heineken refers to the company‟s premium brand, as this will be used henceforth.

The sheer size of the company causes a complex organizational structure. To manage the decentralized company, HEINEKEN N.V. is split into four business units from which the Operating Companies (OpCo‟s) form the biggest business unit. Each OpCo is major subsidiary with an autonomous decision-making structure. HEINEKEN Netherlands is one of the largest OpCo‟s and responsible of roughly 10% of the company‟s global beer production. HEINEKEN Netherlands is again divided into four subdivisions of which HEINEKEN Netherlands Supply (HNS) is the largest in terms of employees and responsible for production. To allow the large company to achieve operational excellence, HEINEKEN adopted the Total Productive Management (TPM) philosophy. The existence of the TPM office at OpCo level demonstrates the importance of TPM philosophy for the company. More details on TPM at HEINEKEN are described in Appendix B .

HNS includes the three breweries in the Netherlands; Zoeterwoude, Den Bosch and Wijlre. The organizational structure of HNS is depicted in Appendix C and can be described as a line-staff organization (in „t Veld, 1988).

2.2 HEINEKEN Zoeterwoude

The HEINEKEN brewery at Zoeterwoude is not only the company‟s largest, but also the largest brewery in Europe. It was built in 1980 and replaced all previous Heineken and Amstel breweries in the Netherlands. Although HEINEKEN‟s brand portfolio comprises more than 250 brands, only two of them are produced at Zoeterwoude, namely Heineken and Amstel. Annual production in 2012 was almost 10 million hectoliters of beer, which amounts to 1,45 million pallets of finished product.

The organizational structure at HEINEKEN Zoeterwoude is depicted in Figure 1 and can be described as a line-staff organization. The departments Brewing and Packaging are involved with the actual production processes, their differentiation indicates a functional layout. The Packaging department has a product-flow oriented layout and is divided into 5 subdivisions called Rayons, which basically constitute areas, each comprising two or three packaging lines. For the scope of this research the Technology & Quality (T&Q) department is an important stakeholder. T&Q is designated to support the sub-units Brewing and Packaging in achieving the required quality and responsible for blockade analyses. Associated with this department are all the Quality Improvers (QIs), Technologists and the manager Packaging T&Q. The manager of the T&Q department is head T&Q.

Figure 1: Organizational structure HEINEKEN Zoeterwoude

Also located at the Zoeterwoude facility, but not a sub-unit of the Brewery, is Customer Services and Logistics (CS&L). This business unit is a subsidiary of HNS and responsible for warehousing, transportation and logistics. In recent years, HEINEKEN aimed to reduce its finished product inventory, while simultaneously decreasing warehouse capacity to save costs.

To cut down on inventory, the majority of products are shipped immediately after packaging. Finished pallets go to the warehouse through a conveyor system where they are immediately loaded into the trucks that are waiting at the loading docks without even touching the warehouse floor. This process is referred to as cross-docking and applies to approximately 79% of total production in 2012.

HEINEKEN Zoeterwoude is mainly supplying export markets as 70% of production is meant for export. Roughly 40% of all Heineken sold worldwide is brewed at Zoeterwoude. Because American consumers

Brewery Zoeterwoude

Secretariat Technical _Support Safety Health

Environment Technology & Quality

Brewing Packaging

Rayon 1 Rayon 2 Rayon 3 Rayon 4 Rayon 5

Packaging lines: 1x 50L kegs 2x domestic bottle Packaging lines: 2x export bottle Packaging lines: 3x export bottle Packaging lines: 2x draught keg 1x cans Packaging lines: 3x export bottle T&Q

Laboratory Brewing T&Q Packaging T&Q AdministrationInformation Lab analyses Quality support _Brewing Quality support _Packaging Information gathering

systems Quality support

ascribe high value to a beer imported from Holland, all Heineken consumed in the US is produced at HEINEKEN Zoeterwoude, making the US market its principal export market. Export beer is Made To Order (MTO), while beer for domestic markets is Made To Stock (MTS). See Appendix D for more details regarding order handling.

To transport the substantial production volumes, Heineken has its own inland shipping terminal at Alphen aan de Rijn, Alpherium. Pallets are loaded in containers, transported to Alpherium by truck from where they are freighted to the harbor of Rotterdam by barge. From here the containers are loaded onto container vessels that sail towards the destined country. Upon arrival, the product is transferred to the Operating Company (OpCo), a company representing HEINEKEN in that specific country. OpCo‟s distribute the products to the final customer, e.g., supermarkets, bars, liquor stores. See Appendix D for more details regarding the distribution process and supply chain.

In 2011, HEINEKEN announced its vision for the year 2015 to push the brewery‟s performance to the next level. The HNS Vision comprises the objectives ranked in order of importance in Table 1.

Table 1: Goals and targets according to the HNS Vision 2015

Ranking Objective

1 Safety 0 accidents annually

2 Quality Number 1 in customer appreciation 3 Productivity High productivity per FTE

4 Cost Low production cost and cost price

In addition, the HNS Vision dictates that by the year 2015 HEINEKEN Zoeterwoude should have less than 50 blockades a year.

2.3 Packaging at HEINEKEN Zoeterwoude

Table 2 depicts a list of the 14 packaging lines operated at Zoeterwoude. Most are designed for one-way export bottles. See Appendix E for the department‟s layout.

Table 2: Overview of packaging lines at Heineken Zoeterwoude

Line Rayon Line type Packaging type Capacity [item/hr] Shifts

Line 11 Rayon 1 Bottles, domestic Returnable bottles 80.000 3-shifts Line 12 Rayon 1 Bottles, domestic Returnable bottles 80.000 3-shifts Line 21 Rayon 2 Bottles, export One-way bottles 40.000 3-shifts Line 22 Rayon 2 Bottles, export One-way bottles 40.000 3-shifts Line 3 Rayon 2 Bottles, export One-way bottles 84.000 3-shifts Line 41 Rayon 4 Draught kegs One-way kegs (5L) 1.400 2-shifts Line 42 Rayon 4 Draught kegs One-way kegs (5L) 1.400 2-shifts Line 51 Rayon 3 Bottles, export One-way bottles 80.000 3-shifts Line 52 Rayon 3 Bottles, export One-way bottles 80.000 3-shifts

Line 6 Rayon 4 Cans One-way cans 60.000 3/5-shifts

Line 7 Rayon 5 Bottles, export One-way bottles 80.000 3-shifts Line 81 Rayon 5 Bottles, export One-way bottles 65.000 3-shifts Line 82 Rayon 5 Bottles, export One-way bottles 65.000 3-shifts

The lines can be characterized as being product-flow oriented where parallelization is used –multiple lines make the exact same product – to prevent touch times from becoming unfavorably small and buffers are incorporated to level out small disturbances (in „t Veld, 1999).

2.3.1 Introduction to the process of packaging

Because HEINEKEN Zoeterwoude produces multiple packaging types, not every packaging line has the exact same processes and layout. There is however, a lot of similarity between the lines. This section describes the processes of a typical export bottle packaging line, as this is the most common packaging line operated at Zoeterwoude.

Before packaging can commence, first the beer is brewn. As brewing is outside the scope of this research, it will not be discussed any further. It is sufficient to say that at Heineken Zoeterwoude, all raw materials arrive, are converted to beer by the brewing facility and stored in large storage tanks.

The input to the packaging line is beer from the brewing house and packaging materials. All export bottles are new glass bottles as the large travel distances make returning infeasible. As domestic bottles are returnable, the layout of domestic packaging lines is more complex as plastic crates and the bottles must be thoroughly washed before processing. Beer arrives at the packaging lines through piping that runs from the storage tanks of the brewing house to the packaging lines. Packaging materials are transported by carts, forklifts and lorries to the intake areas.

Figure 2 displays a simplified function model of the functions performed by a typical export packaging line. A more elaborate description of these functions can be found in Appendix F . After packaging, the pallets will automatically move down the line to the distribution area of CS&L where they will be cross-docked or warehoused.

Figure 2: Processes of a packaging line simplified, without filters or control functions

All packaging lines at Zoeterwoude are designed to have a V-shaped capacity distribution, implying that a packaging line‟s output is designed to be limited by the central process in the middle of the V-shape (Goldratt & Cox, 2004). At Zoeterwoude the central process of a packaging line is always the filling of the bottles, so the capacity distribution of a packaging line is deliberately designed to have its pallets with

bottles

Depalletise

Rinse

Fill

Capping

clean water

waste

water beer, CO2 crown corks

Pasteurize

Label &

code

Pack boxes

Palletise &

code

minimum at the filler, with up- and downstream production capacities increasing the further away equipment is situated from the filler (Tsarouhas, 2010).

Since labor is expensive, modern packaging lines are designed to require as little human intervention as possible and are therefore highly mechanized. A typical export packaging line requires 6 operators.

2.3.2 Quality Control for packaging

Food-producing companies like HEINEKEN are subject to strict legal requirements to protect consumers from sickness or injury (Bolton, 1997; Andres Vasconcellos, 2004). Examples of these legal requirements are the absence of glass particles and dangerous bacteria inside the bottles. Apart from legal requirements, Heineken has additional requirements, often related to customer experience such as label position and print requirements. Also handling properties are concerned such the minimum glue deposition on each box. Both legal and additional requirements result in the specifications that have to be met by all products. Though a production process inherently aims for zero defects this is nigh on impossible to achieve. Regardless the precautions taken during the production process, nonconformities may occur during all stages.

Ensuring that only qualitative sufficient products are shipped is an essential aspect of production (Andres Vasconcellos, 2004). To prevent defects from reaching the customer, detection systems that detect and filter out defective products are employed. These processes are referred to as Quality Control (QC) (Oakland, 2003). QC is performed by measuring a number or properties like temperature, pressure, fluid level, etc. Figure 3 depicts how these measurements are interpreted:

 Process Average: The process‟ target value

 Upper and Lower Control Limit (UCL, LCL): Whenever a value is within the UCL and LCL,

the process is assumed to function properly. Is the value higher than the UCL or below the LCL, production can still continue, but corrective measures must be taken

 Upper and Lower Tolerance Limit (UTL, LTL): Whenever a value is higher than the UTL

or lower than the LTL, a second sample is taken to rule out a possibly faulty first measurement. If this sample is also nonconforming, it is concluded a defect has occurred

Figure 3: Example to illustrate Control and Tolerance Limits

0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 1 1 2 3 4 5 6 7 8 9 10 11 12 M easur ed v al u e Sample number

Upper Control Limit

Process Average

Upper Tolerance Limit

Lower Control Limit

Lower Tolerance Limit

Outside Tolerance Limit

Obviously there is no process average for boolean properties such as „leaking‟ or „not leaking‟. Here based on a positive or negative value, a product is either conforming or not. Two ways of detection are employed; automated and manual detection.

2.3.2.1 Automated detection

Automated detection is performed by sensors integrated in the packaging lines. Each sensor measures one or more specific properties of every passing product. If a measurement indicates a value above the UCL or below the LCL, the item is removed from the material flow by an actuator. The sensors and actuators thus act as in-line filters that filter out nonconforming products.

2.3.2.2 Manual detection

It is impossible to design sensors that can measure every property of a product. Moreover, a sensor might be malfunctioning or inaccurate. Therefore manual detection is performed on the products, the sensors and the equipment. Due to the high production rates and volumes it is infeasible to screen every product manually, so samples are taken with fixed time intervals or certain events like startups, change-overs and revisions.

An operator is notified by the Manufacturing Execution System (MES) when to take a sample. The operator takes a sample in line with the prescribed standards and reports the values back to the MES.

Whenever manual detection yields two values outside the Tolerance Limit, an initial and a recheck to rule out a faulty first measurement, the whole batch of products that passed the sample point since the last conforming sample might contain defects. To minimize consumer risk, this suspicious batch is inhibited from being delivery and is referred to as a blockade, depicted in Figure 4.

Figure 4: Graphical representation of samples and blockades in time

Upon identifying a nonconformity an operator will immediately halt production. Next, he creates a „blockade‟ in the MES that changes the status of all products that passed the sample point since the last conforming sample to „blocked‟, so they can be intercepted and separated by CS&L‟s scanners. All blocked products will finish the packaging process since manual removal is difficult. CS&L will separate the blocked pallets from the material flow and store them in the warehouse.

When creating a blockade in the MES, the operator is also required to fill in an incident report and gather a few samples of the nonconformity to facilitate the blockade analysis in a later stage. The operator will try to fix the defect as quickly as possible so production can resume.

12:00

13:00

14:00

Sampleþ

Sampleþ

Sampleý

Time

Combining the automatic checks and manual samples with Figure 2 yields the simplified function model of Figure 5. The automatic checks are represented by filters, since products are immediately rejected from the material flow. Manual checks apply to the sensors, equipment, or product and are represented by a measurement point since only information is gathered without actually removing any products from the material flow. Further information regarding the types, properties, procedures and time intervals of each check can be found in Appendix G . Each number in the figure corresponds with a certain automated or manual check. In total, 4 automated and 26 manual checks are performed on a packaging line.

Figure 5: Simplified function model of a packaging line, with automatic and manual checks

Since nonconforming input will nearly always result in nonconforming output, it is important to detect and remove any defective input. Therefore, manual sampling is also done before supplying packaging materials to the packaging lines.

2.3.2.3 Blockade analysis

All blockades are analyzed to determine what further processing is required. This is done because it is often possible to still release blocked products to the market or to bring them up to specifications. Even when all products are off spec, if the nonconformity is deemed non-critical, products might still be released without (major) consequences.

The analysis is performed by the Quality Improvers (QIs) of Packaging T&Q. First step is that they gather information depending on the type of defect. Common sources are the incident report from the MES, recorded information by the packaging line and the samples taken by the operator. If necessary, a QI orders new samples to be taken from the warehoused product. These samples are inspected on the spot or send to the lab for analysis. With every blockade, the defect occurred somewhere between the nonconforming and the preceding conforming samples that the operator took. Therefore, the first part of a blockade is often non-defective and safe to release. In the end, the QI writes a report pallets with

bottles

Depalletise

Rinse

Fill

Capping

clean water

waste

water beer, CO2 crown corks

Pasteurize

Label &

code

Pack boxes

Palletise &

code

n1 m

m

m

m

m

m

n2

m

m

n3

m

m

n4

m

m

1,2

3

4-10

11,12

13 14,15

16,17

18-21

22,23

24-26

27-29

30

containing all information and formulates an advise on subsequent action. So it is possible that the different parts of a blockade are processed differently.

Subsequent action can be four things:

 Release: In this case the product is considered sufficiently safe to be released to the market.

This does not necessarily mean that the operator misjudged the samples he took or mistakenly created a blockade, but merely indicates that analysis concluded the product to be safe and suitable to release. To release the product, the QI changes the products status so that CS&L can ship it.

 Rework: Rework can bring the products up to specifications. Examples are boxes that need

to be reglued. As rework requires a palletizer that is normally dedicated to a packaging line, planning must issue a rework order to halt the accompanying packaging line during rework and allocate production time and employees.

 Inspect and rework: Inspecting entails manual inspection of the finished product by an

external company, Yorkshire. First the pallets are fetched by CS&L and put on a designated place. Defects are manually separated from the rest and destroyed. Before the remaining products can be released they require rework, which means they are palletized, wrapped and coded.

 Destroy: When the defect‟s severity is such that it is not advisable to release the products to

the market, the concerning products are destroyed. By changing the products status, a CS&L operator is informed to fork-lift the product to a designated area where it is destroyed by Dammes, a contractor. The bottles are manually drained, shattered, collected and return to the manufacturer for recycling. When a blockade involves domestic bottles that are not the cause of the defect, the cheapest option is usually to reinsert the bottles at the washing machine to preserve the bottles‟ value.

Before any action is undertaken, the QI‟s advice must be approved, so he sends the report to the manager Packaging T&Q, who in turn forwards the report to head T&Q. Head T&Q is responsible for all released products. Both manager Packaging T&Q and head T&Q discuss all blockades twice a week. They can approve the advice, disapprove it or request more information. When a decision is taken, the QI is informed to initiate further processing. Appendix K depicts a rich-picture with all major stakeholders and factors involved with blockades.

Every blockade must be analyzed within 42 days. This restriction is related to the expiry date of the beer. If a blockade is not analyzed within this time span, HEINEKEN cannot guarantee product freshness after transportation, so the product must be destroyed.

The following developments are foreseen with regard to blockades and their future impact. See Appendix J for a more detailed description of these developments and their background. A distinction can be made between internal developments at HEINEKEN Zoeterwoude and external developments.

Internal developments

 HEINEKEN aims to reduce the number of employees for the next 4 years, therefore the impact that blockades will have on HEINEKEN‟s operations will increase, both on Packaging and CS&L

 Due to diminishing warehouse capacity, blockades will more often require external storage  As HEINEKEN aims to shorten its order cycle, the time in which a blockade can be handled

before the shipment date will become shorter

 Over the last 5 years, product variants increased with 65% and will likely continue to do so, slowing down a significant reduction of blockade quantities (HEINEKEN, 2011)

 Management at Zoeterwoude expressed the intention to reduce the number of QIs. How and when this will happen has not been clarified. One thing is certain; the headcount at Packaging T&Q will diminish in the future

External developments

 Modern communication and social media can greatly amplify brand damage when delivering defective product (Kietzmann et al., 2011). Therefore mistakenly released blockades that harm consumers will likely have a bigger impact in the future

 Consumers‟ increasing demand for quality combined with HEINEKEN‟s changing market focus and will cause narrower tolerances and therefore slowing blockade reduction

 Andres Vasconcellos states that part of a product manufacturing audit is to inspect whether control of nonconforming products (e.g. blockade handling) is in accordance with procedures (2004). Therefore a dysfunctional blockade handling system could yield bad results when internal or external quality audits are performed.

2.3.3 Quality Assurance for packaging

While Quality Control prevents the defective products from reaching the customer, the goal of Quality Assurance (QA) is to achieve the highest possible quality regardless of any inspection (Oakland, 2003). Therefore, QC aims to prevent defects and thereby blockades.

Quality Improvement

To prevent defects from reoccurring, TPM dictates that every blockade must be followed up with a Quality Break-Down Analysis (QBDA). A QBDA employs tools such as 5-Why diagrams to determine the defects‟ root-cause, eliminate it and secure these measures (Assen et al., 2007). QBDAs bear similarities with the Deming-cycle cycle (Liker, 2004). A QBDA is performed by the operator that discovered the defect, aided by his Team Leader. Upon completion, the operator sends the QBDA to Packaging T&Q that checks whether QBDAs are performed properly and in a timely fashion. At the next team meeting the results of the QBDA are discussed and solutions to problems can be implemented. See Appendix I for more information regarding QBDAs. Persistent problems can be addressed with Kaizens or Project Teams that are performed by multidisciplinary teams in a period of respectively 6 and 12 weeks.

In order to reduce the number of blockades, HEINEKEN focuses on continuous improvement. By finding and eliminating the root-causes of defects, the number of defects can be substantially reduced on the long term (Oakland, 2003). HEINEKEN simplified and optimized the improvement tools to maximize their effectiveness and all relevant personnel received extensive training in using them. A possible explanation for the slow reduction of blockades is how continuous improvement is executed on the production floor. There are still noticeable quality differences between QBDAs performed by different operators or Rayons. The disadvantage of the QBDA system is that it must be executed by all the operators, a big group of employees that often sees the QBDA as extra work or has trouble to grasp the method and its intended use.

It is remarkable that although the packaging lines are working on continuous improvement, lessons learned are not shared across the organization. It would be beneficial to store the QBDAs in a central database so that when the same defect occurs on another packaging line the QBDAs solution can be copied, used to rule out previous root-causes or generate hypotheses. By doing so HEINEKEN can enhance its learning ability which Den Hertog (1988) defined as the ability of an organization to collect relevant information, to select, to integrate, to store and to retrieve, to transfer and to use (Veeke, et al., 2008).

Since defects cannot be prevented entirely, it is important to at least minimize both their probability of occurrence and their impact when they do occur (Tsarouhas, 2010). Therefore this research will address minimizing the impact of blockades once they occur by focusing on blockade analysis. The occurrence of blockades is assumed to be a given fact.

3

System analysis of handling blocked product

In this chapter the system will be analyzed. First, the assignment and the research methodology will be explained in section 3.1. Section 3.2 will outline the goals and objectives of the system. Next, in section 3.3 a qualitative analysis of the problem will be discussed, whereupon in section 3.4 a quantitative analysis will further elaborate on the numerical aspect.

3.1 Research approach

To systematically analyze the current processes within the scope of the research, the Delft Systems Approach (DSA) will be used (Veeke et al., 2008). The DSA is a fundamental approach that entails conceptual models to model, analyze and (re)design the entity of interest – which is a company in this case – from a systems perspective. The systems approach primarily focuses on the whole and on the component parts using different aggregation layers; it uses definitions as processes, functions and control loops, and in doing so provides a better insight into the flows through the company (Veeke et al., 2008).

To model processes taking place, the steady-state model will be used. The steady state model is a conceptual model that describes the concept of a function (i.e. system) for any repetitive industrial process (Veeke et al., 2008). Appendix N depicts the steady-state model its general form. Also the current goals and policy will be investigated and evaluated according to the main process criteria (Bikker, 1994).

3.2 Goals and objectives of the system

While investigating the goals and objectives of the system, it was observed that HEINEKEN has not clearly defined what the objectives of the system are with regard to blockade analysis. After interviewing the stakeholders of the process, the following goals with regard to blockades were established:

1. Decide subsequent action for blocked product 2. Minimize consumer risk and possible brand damage 3. Recover as much value as possible

4. Minimize blockade lead time

According to the DSA, goals can be interrelated in two ways (Veeke et al., 2008):

 Competing goals: insufficient means are available for realizing the relevant goals

concurrently. Priorities must be set.

 Conflicting goals: the relevant goals conflict with each other and cannot both be realized.

It appears that goal 1 is paramount. Goals 2 and 4 are competing, because consumer risk can be minimized by for example a 100% inspection, but this will result in a prolonged lead time. Normally

goal 2 is prioritized as consumer risk and possible brand damage are more important than timeliness. Also goals 2 and 3 are competing. While consumer risk is at a minimum when all blocked products are destroyed – there is certainty that no defect has been released – this is very detrimental from a cost perspective. Which goal is prioritized depends on a risk and cost deliberation.

3.3 Qualitative analysis

This section will analyze the system from a descriptive perspective, using the Delft Systems Approach and the steady-state model. It starts by describing the system from a high aggregation level with each subsequent sub-section, zooming in on the problem, until the desired aggregation level is attained.

3.3.1 Level 1 – Packaging black box

The analysis starts at the highest aggregation level or echelon, which is the process of packaging. The system is represented as an elementary black box in Figure 6. In line with the scope of this research, only the aspect-system related to blockades is elaborated on. Beer and packaging materials enter through the system boundary where the packaging process converts them in pallets with packed beer and waste.

Requirements are put on the system by the environment. For the brewery it is paramount that consumer risk is limited to a minimum due to possible claims, loss of reputation or future sales. This implies that no defective product should leave the system as finished product. In addition waste and delayed shipments must be minimized. The Vision 2015 pursues less than 50 blockades annually. Furthermore, the lead time of a blockade within the system – time between production and shipment from the brewery – can be no longer than 42 days, due to the shelf life of the beer.

Blockade quantities are simply measured, though it is unclear how or when intervention occurs, nor is this number reported as a KPI. To evaluate whether consumer risk is minimized, HEINEKEN has an extensive infrastructure to collect consumer complaints and retrace brewery, packaging line and production time using the production code of the plaintiff‟s product. When a complaint is found to be legitimate, it is referred to as a Justified Product Complaint (JPC). Moreover, HEINEKEN hires SGS, a contractor, to randomly inspect products in supermarkets and gather information regarding non-conformities that would not necessarily lead to JPCs, but might be harmful for the consumer or brand image nevertheless.

Figure 6: Packaging represented as a black box

3.3.2 Level 2 – Packaging examined

Figure 7 zooms in on the black-box displayed in Figure 6. During the process of packaging, the sensors can reject products, thereby creating waste. When a manual sample indicates nonconformity, the relevant products are labeled as blocked so the filter after the packaging process will separate them from the material flow and warehouse them. If products were already shipped before the blockade was issued, these products cannot continue their way through the supply chain, because at every transshipment location it is rescanned. This product can then be returned to the brewery. A valve determines if warehoused blocked products will be reinserted into the material flow, reworked, inspected or destroyed. When the warehouse is full, the excess is discharged into the environment by means of external warehousing, thus the buffer has a safety function to prevent overfilling.

Figure 7: Executing processes and input and output boundary zones of Packaging

There were no indications of any problems in these processes, so therefore the next step was to focus on the system‟s control organs that gear these executing processes.

3.3.3 Level 2 – Packaging control examined

Figure 8 depicts the steady-state model of Packaging. To accomplish the requirement of less than 50 blockades a year, HEINEKEN translated this requirement to the standard that each blockade must be followed up by a QBDA to prevent reoccurrence (n1). Blockade quantities are reported nor regarded as a Performance Indicator (PI) because management fears that making the number of blockades a PI will create the incentive for operators who detect defects to intentionally conceal them in order to mend performance figures.

Package

beer

packaging

materials

pallets with

packed beer

 minimize consumer risk  max lead time blockade 42 days  minimize waste

 number of blockades <50/yr  minimize delayed shipments

performance:  blockade quantity  JPCs, SGS reports

waste

Input zone Transformation process Output zone

warehouse

beer packaging

materials

During the process of packaging the MES requests samples with fixed time intervals according to the sample plan (n2). Operators take measurements and report back to the system which compares the values with existing limits. If a value is outside the Tolerance Limit, the MES notifies the operator, who intervenes by halting production and creating a blockade. Blocked products have their production status changed from „production‟ to „blocked‟. The operator writes an incident report. This information is linked to the barcode of each pallet, thus the information is added of the material flow.

Next, the operator will look if he can remove the cause of the defect quickly to resume production. Concurrently to this short-term fix, an improvement process is initiated that obliges the operator to perform a QBDA or start a Kaizen to prevent the defect from reoccurring on the long-term (n1). This fixing and improving of the packaging line is a feedback control loop; the result of a measurement determines the intervention on the processes that caused the defect (Veeke et al., 2008).

An analysis is performed on the blockades that have been created in order to determine how they should be processed (n3). The output of the analyze function controls the valve, thus determines what subsequent action is undertaken. Blockade analysis can be regarded as a feed forward control loop; after determining the disturbance, the system compensates for this disturbance by reworking, destroying or releasing the blocked product, so cause determines intervention. The problems with blockade analyses were found in the „Analyze‟ control organ.

Figure 8: Steady-state model of packaging

Package i Compare Fix and improve m Analyze im p le m en t sa m p le m process order Inspect Destroy beer packaging materials pallets with packed beer waste returned product return order I E standards performance waste D defect info Rework performance:  blockade quantity  JPCs, SGS reports requirements:

 minimize consumer risk

 number of blockades <50

 minimize waste

 max lead time 42 days

 minimize delayed shipments

JPCs, SGS reports E results n2 n3 Fu n ct io n C o n tr o l P ro ce ss C o n tr o l i m ea su re Control ex ec u te

Input zone Transformation process Output zone

Inbound warehouse

standards

warehouse

3.3.4 Level 3 – Blockade analysis examined

Figure 9 examines the „Analyze‟ function, which is again a steady-model. Blockade information enters this sub-system and is transformed into a decision that determines a process order which is the output of the system.

1. Encoding

Information regarding blockades enters the system in the form of a MES blockade. With a program, called MES Packaging, the QIs can access this information (n1). Apart from digital information also samples taken by the operator upon creating the blockade enters the system. 2. Buffer

The blockade enters a buffer and stays there until a QI notices the blockade and can start to work on it. It is also possible that word of mouth reaches him. QIs only work on blockades from their Rayon and employ a First In First Out (FIFO) prioritization (n2).

3. Filter

After noticing the blockade, the QI evaluates whether the blockade was properly created and if analysis is necessary (n3). If not, the blockade is rejected for further processing.

4. Transformation process: gathering information related to the blockade

The QI gathers information by studying the incident report in MES, examines the samples that were taken by the operator and requests data from the MES to understand the events recorded by the system prior to the defect. He then determines if it is necessary to take additional samples to narrow down occurrence rate and severity of the defect. If samples are required from blocked product that was already shipped, the QI can issue a return order. 5. Transformation process: analyzing the gathered information

All gathered information is analyzed. It is possible that, especially when the cause of the blockade is related to the condition of the beer, samples will have to be analyzed by the lab. At the end of this process an advice is issued on subsequent action.

6. Transformation process: formulating an advice

After analyzing all information, a report is created containing all relevant information and the advice. The report is send to the manager Packaging T&Q.

7. Buffer: mailbox manager Packaging T&Q

The report is buffered in the mailbox of the manager Packaging T&Q until it can be attended. 8. Filter: check if information suffices

The manager Packaging T&Q checks the report for the presence of all relevant information and sends it to the head T&Q. Otherwise it is returned to the QI.

9. Buffer: mailbox head T&Q

The report is buffered in the mailbox of the head T&Q until it can be attended. If higher management is required to be involved in the decision taking, the report is forwarded to the concerning manager. To determine when to involve which manager, there are procedures that differentiate a blockade by product group and determine which manager to involve (n4).

Involvement is not very common and in practice it happens only if the problem is very complex or if the decision will have large financial consequences. Head T&Q and manager Packaging T&Q review al buffered reports twice a week.

10. Filter: check the advice

The final filter decides to accept or reject the advice. Usually, the report is discussed by the managers Packaging T&Q and head T&Q, while sometimes higher management is involved. They can still deem the information insufficient and send the report back to the QI. It is also possible that they disagree with the advised action. The advice is then overruled, hence the add-the-missing function. Afterwards, the decision is reported back to the QI.

11. Decoding: initializing subsequent action

After receiving the final decision, the Quality Improver will change the status in the MES accordingly to release, inspect, rework or destroy and initiates processing the product.

12. Evaluating

If JPCs or SGS-reports can be retraced to blockades indicating delivery of non-conforming product, standards are adjusted or further research is undertaken find the cause.

Figure 9: Steady-state model of the analyze function Function Control

As Figure 9 indicates, many executing processes like „Gather information‟, „Take samples‟, „Analyze‟ and „Formulate advice‟ do not have standards defined by the initiating function of Function Control. There are also no standards related to the filter functions. As a result, the same blockade might be handled very differently by different QIs or managers. In the past years the function head T&Q was changed a few times. The lack of standards hinders consistent handling of blockades while this is vital to ensure consumer risk is kept to a minimum. Andres Vaconcellos states that a company must have established procedures (Product Hold) to ensure that nonconforming products are prevented from inadvertent use or release to the market (2004). Also for transferring the work to new or other employees is difficult when there are no standards. Because documentation is unstandardized,

Gather information E Analyze Take samples MES blockade info Initiate Evaluate standards deviation ? performance:  JPCs, SGS reports D mailbox man T&Q mailbox head T&Q enough info more info req more info req process orders report Formulate advice requirements:

 minimize consumer risk

 minimize waste

 max lead time 42 days

 minimize delayed shipments

JPCs, SGS reports sample data n1 return order Function Control Input zone Transformation process Output zone n2 n3 n4 n5 Process Control