Improvement of TPM implementation control at the Heineken Brewery Zoeterwoude - Verbetering van TPM implementatie beheersing bij de Heineken Brouwerij Zoeterwoude

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Delft University of Technology

FACULTY MECHANICAL, MARITIME AND MATERIALS ENGINEERING

Department Maritime 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 84 pages and 14 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

Specialization: Production Engineering and Logistics

Report number: 2013.TEL.7812

Title: Improvement of TPM implementation control

at the Heineken Brewery Zoeterwoude

Author: M. Kramer

Title ( Dutch): Verbetering van TPM implementatie beheersing bij de Heineken Brouwerij Zoeterwoude

Assignment: Master Thesis

Confidential: Yes (December, 19, 2018)

Initiator (university): Dr. ir. H.P.M. Veeke

Initiator (company): Ir. A. Jacobs

Supervisor: Prof. dr. ir. G. Lodewijks

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Department Maritime 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: M. Kramer Assignment type: Master thesis

Supervisor (TU Delft): H.P.M. Veeke Creditpoints (EC): 35

Supervisor (Heineken): A. Jacobs Specialization: PEL

Report number: 2013.TL.7812

Confidential: Yes, until Dec., 19, 2018

Subject: Improvement of TPM implementation control at the Heineken Brewery Zoeterwoude

Introduction

Heineken employs a global process improvement program based on the Total Productive Management (TPM) philosophy. The goal of this program is to develop the Heineken supply chain into a world class supply chain. To develop the Breweries to this level an implementation program is set up. This program consists of three steps: Bronze, Silver and Gold. In 2003 Zoeterwoude Brewery is amongst the first Breweries to implement this program and the goal is to acquire the Bronze status in the prescribed period of 3-5 years. Only recent, in 2013, the Brewery achieved the Bronze award. The 10 year implementation duration far exceeds the intended duration.

Problem statement

After the Bronze phase the Zoeterwoude Brewery will start the implementation of Silver. However, currently the root causes of the implementation duration exceedance of Silver are not clear and if the process is not improved the Silver implementation is pruned to suffer from implementation duration exceedance. Therefore, this research is initiated to analyze and improve the TPM implementation process.

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

Based on the performed analysis the root causes of the control issues are stated as; the absence of a conformation and tuning function and the lack of overall project control. Therefore, the final research question reads:

How can the brewery process of confrontation and tuning be designed so it provides clear and realistic goals and how can the project control be designed so that implementation is controlled as one project?

Research execution

Your research assignment composes of four elements. The first element is to model the TPM processes using the Delft Systems Approach. The second element is to diagnose the root cause of the implementation duration by combining the systems analysis findings and observations of the Bronze phase. The third element is to (re)design the control processes so that the root causes of the control issues are eliminated. The last element is to demonstrate the working of the designed processes by performing a proof of concept. To carry out these four elements relevant literature should be studied.

Graduation Professor Graduation Attendant

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Preface

This report is the result of my master thesis project, carried out to complete the Master of Science program Production Engineering and Logistics at Delft University Of Technology. The assignment is executed on behalf of the section Maritime and Transport Technology and concerns the Total Productive Management implementation at the Heineken Brewery Zoeterwoude.

I could not have finished this project without the comprehensive I have received. Therfore I would like to express my gratitude towards the people who have contribute to the realization of this thesis. To start with, I would like to thank Fons Jacobs for giving me the opportunity do my research at the TPM office at the Zoeterwoude Brewery, always making time in his busy schedule to exchange ideas and support I received throughout the project. I would like to thank Hans Veeke for the patience and valuable feedback that was of great help to guide me through this abstract subject. Besides the direct support for this thesis I also would like to thank Hans Veeke for his role in providing the basis through the Production Engineering and Logistics program. I would like to thank Professor Lodewijks for his critical edge and practical questions, which were essential in composing a balanced research. Finally I would like to thank my colleagues at the TPM office, Brewery Management and all other indirectly involved Brewery Personnel members for always taking the time to answer my endless stream of questions.

The Hague, December 2013 Michiel Kramer

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Executive summary

After the turn of the millennium a global consolidation in the beer industry started. In 2012 the top 4 players in the market – including Heineken - represent 41% of the global market. In order to maintain the position of an independent market leader in this turbulent market, Heineken initiated a companywide improvement program called Total Productive Management (TPM). Heineken’s TPM program is based on Efeso’s World Class Operational Management (WCOM) and aims to develop Heineken’s operations into a world class supply chain. The implementation of this program is divided in three sequential stages, respectively called Bronze, Silver and Gold.

Due to the challenges of an internal free market model, Heineken’s flagship Brewery at Zoeterwoude is highly motivated to improve the operational performance faster than other Breweries. To realize this faster improvement the Zoeterwoude Brewery has the ambition to be one of the frontrunners in the TPM program. Therefore, in 2003 the Zoeterwoude Brewery was amongst one of the first Breweries to start the implementation of the TPM program. In February 2013, Zoeterwoude has finished the Bronze phase. This first step took 10 years instead of the intended 3 to 5 years.

Although Brewery Management does not directly consider exceedance of the prescribed implementation period as a failure, it is conceived to be a problem that the intended implementation duration was far exceeded. Now the Brewery is on the verge of starting the Silver phase, Brewery Management has stated the need for a more controlled implementation. Therefore the objective of this research is to analyze and improve the TPM implementation process.

Total Productive Management Program

TPM is a continuous improvement philosophy originated in Japan with the ultimate goal of creating excellent processes. The TPM philosophy is based on four principles:

 Fewer losses lead to excellent processes

 Improved operational standards lead to fewer losses

 An improved problem solving capability lead to improved operational standards  Developing methods and skills lead to a better problem solving capability

The realization of TPM is carried out by so called Pillars. Each pillar is responsible for a focus area of the realization, for example Safety, Health and Environment or Preventive Maintenance. Each Pillar therefore is responsible for a part of the losses, standards, problem solving capability and development of methods and skills.

The TPM Award System consists of three following phases (Bronze, Silver, Gold) that are measured by four award criteria:

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 Pillar guidelines audit score  Fulfilment of killer criteria

 Heineken Manufacturing Star performance score  Shop floor indicator criteria

The pillar guidelines and the killer criteria describe how the Brewery improvement process should be executed in terms of TPM. The difference between these two criteria is that the pillar guidelines give substance for one focus area, for example quality or safety, and the killer criteria apply to all the focus areas. The Heineken Manufacturing Star and the Shop Floor Indicators describe what operational result should be obtained by employing the prescribed method. The Heineken Manufacturing Star is a balanced scorecard based on the Brewery’s 23 most important KPI’s and the Shop Floor Indicators are operational indicators concerning the process reliability, stability and quality.

Analysis of the Bronze phase

By reviewing the implementation of the Bronze status with the control criteria of in ‘t Veld it is concluded that the project was not performed in a controlled way. The main control issues that are found are:

 Progress was determinate upon audit score

 Brewery personnel had no knowledge of the intended target state  Killer criteria where not assigned

 No steering on implementation duration

 Available resources where easily allocated to operational problems  Low commitment to planning

Due to the lack of implementation control it was not possible to give an estimation of the required effort and time. After reviewing the aspects that make up the project tension field between quality, project duration and resources, it can be concluded that there was little room for compromising on quality. Moreover, there was no commitment to milestone dates, whilst the resource availability was under pressure from day to day operations. The combination of these factors resulted in the exceedance of the intended implementation duration.

System analysis of TPM implementation

In order to determine whether the found issues can be related the current design of TPM implementation process, the process is analyzed using the Delft Systems Approach (DSA). It is concluded that the TPM process at Heineken’s Zoeterwoude brewery consists of two processes: TPM execution and TPM development. Through TPM execution the standards of the operational processes are improved. TPM development is the process in which the organization is equipped with methods and skills to improve the way TPM is executed. The

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implementation of the TPM program, concerns the TPM development process, in other words how to get the Brewery working in a TPM way.

Concerning the TPM development process two main systems deficiencies are found. The first is that there is no confrontation and tuning function. The purpose of this function in the innovation model is to tune the policy to the definitive goals. The second finding is that there is no overall project control, making the individual executing pillars self steering.

Problem statement and research question

The problems observed during the implementation of the Bronze phase can be linked to the main conclusions of the systems analysis through two problem statements. The first is that no clear and realistic goals are set. The second is that Bronze implementation was not controlled as one project. Based on these problem statements the main research question is stated as: How can process of confrontation and tuning be designed so it provides clear and realistic goals and how can the project control be designed so that implementation is controlled as one project?

To answer this question two process elements have to be designed, a confrontation and tuning process and the project control function.

Design of a Confront and Tune Process

The goal of the confront and tune function is to translate the generic criteria set by the Corporate TPM office into clear and realistic goals for the specific Brewery. The SMART method states that goals should be Specific, Measurable, Acceptable, Realistic and Time bound. Based on these requirements the four process steps are defined; compare the as-is and to-be situation, determine the acceptability, tune the gaps to the organizational structure and schedule into a master plan.

These process steps have to be performed for each of the four TPM criteria, therefore the substance of the step should differ for each of the criteria. Figure 1 shows the composition of the sub steps and a brief description for the execution method. The tools to perform the process are also incorporated in the design.

Through the execution of the confront and tune process the general criteria are transformed into a scheduled overview of the actions that should be executed to perform TPM implementation.

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Figure 1 Confrontation and tuning process summary

Design of Project Control

The second part of the design is the project control, which must ensure that the project is managed as one project. To do so, the project control must consist of three aspects:

 Steering function for the individual executing pillars  Coordination function between the pillars and  Result verification function

The first function, steering the pillars, is done by translating the agreed commitments into standards for the pillars. These standards cover the aspects of quality, resources and time. To fulfill this function a dashboard to monitor the progress and performance is developed. If one of these indicators is of, an intervention in the implementation system is needed.

Although the coordination between and allocation of projects to pillars is primarily done in the tuning phase, the project control process should be able to deal with deviations from the original action plan. Therefore, the second function is to coordinate the activities between the pillars. To fulfill this function alterations in the pillar year plans should be reported back to the project control so the coordination can be ensured. To fulfill the function the project control should receive quarterly pillar progress updates.

The last function of the project control is the result verification. From the tuning process a projection of the performance increase is made. If the operational performance stays behind or is ahead of schedule the project control should intervene by altering the standards. For this function a dashboard is constructed to identify deviations from the expected performance increase.

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Proof of Concept

To demonstrate the working of the designed process the concept is applied. Subject of the proof of concept is the implementation of Silver phase at Zoeterwoude Brewery. Thereby focus is on the proof of the confront and tune function, as project control can only be applied throughout the course of implementation. From the proof of concept conclusions are made. The following paragraph address the findings per process step.

Step 1: Current situation- By performing the confrontation of the as-is and to-be situation it is found that the current way of working covers 43% of the pillar guidelines and 39% of the required killer criteria for Silver status. To meet the performance criteria the Heineken Manufacturing Star performance must be increased by 5,6% on average and the Shop floor indicators with 10,2% on average.

Step 2: Acceptability - Through the assessment of the acceptability of the goals it is found that 22% of the pillar guidelines pose an unacceptable effort/result ratio and will not be listed for execution. With the exception of the absence rate, the HMS criteria are all considered acceptable since they are feasible and in line with the long term vision of the operational performance of the Brewery. The Shop Floor Indicators are also considered acceptable, with the exception of the mean time between stops and the mean time between failure for the keg lines.

Step 3: Tune to Organizational Structure – The pillar guidelines and killer criteria are tuned to the organizational structure, which results in four Brewery wide projects: 1) Autonomous maintenance; 2) Copy and share structure; 3) End 2 End optimization; and 4) operational standard evaluation. The other killer criteria are allocated to a specific pillar.

Step 4: Master plan – The actions listed are scheduled into a master plan. Given the current resource availability and quality scope, it is found that the best estimate for implementation duration is 5 years. This implementation is strongly depended on the critical path off rolling-out Autonomous Maintenance steps 4, which concern the allocation of technical and technological tasks to the operators.

The proof of concept is concluded by addressing the business case of Silver TPM implementation. The total cost of Silver TPM implementation are estimated at € 4.960.000 and the yearly revenues are estimated at € 2.138.000. Based on these estimations the net present value of the project is € 6.523.000 which makes the project financially viable. Through the net present value calculation it is can also be concluded that even if the project cost are exceeded by 150% the project is still financially viable.

Evaluation of the execution of the designed process proofs that the process delivers an comprehensive and practical overview of the goals and corresponding efforts. All stakeholders agree that the process has greatly clarified the expectations of the project. Through the

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execution of the process Brewery Management was confronted, in advance, with a projected duration of 8 years based on the current recourses. Based on this insight it is decided to double the available man-hours for the implementation of Autonomous Maintenance step 4, which is the critical path of Silver implementation, to complete the project in 5 years. Furthermore, the Corporate TPM office have praised this method of working with its accompanying tools. Therefore, it is expanded to all Heineken Peer breweries in Europe to prepare and control Silver implementation.

Conclusions

The purpose of the research is to improve the control of TPM implementation at the Heineken Brewery Zoeterwoude. Through the analysis of the Bronze phase and a system analysis the root causes of the delay are found in the lack of clear and realistic goals through the absence of a confrontation and tuning function and a lack of project steering control though the absence of a central project control. Therefore the main research question arise of how to redesign both elements to ensure clear and realistic goals and the that the implementation could be managed as one project. The presented confrontation and tuning design has demonstrated its function through the proof of concept. The project control jet has to prove its function by applying it throughout the Silver project.

To conclude the research four recommendations are given to the Zoeterwoude Brewery Management:

 The goals must justify the means  Choose what not to do

 Look into the savings potential at the support functions  Sharing of mistakes

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Samenvatting

In het jaar 2000 is er een wereldwijde consolidatie in de bier industrie gestart, waarbij in 2012 de grootste vier spelers – waaronder Heineken – 41% van de wereldmarkt representeerden. Om de positie als onafhankelijke marktleider te behouden, initieerde Heineken in 2002 een bedrijfsbreed verbeterprogramma. Dit programma heet Total Productive Management (TPM) en is gebaseerd of Efeso’s Word Class Operational Management aanpak. Het doel van dit programma is om Heineken’s supply chain te transformeren naar een supply chain van wereldklasse. De implementatie van dit programma is verdeeld in drie sequentiële fases, respectievelijk Brons, Zilver en Goud genaamd.

Door het vrije markt model dat gehanteerd wordt is Heineken’s vlaggenschip brouwerij in Zoeterwoude erg gemotiveerd zijn operationele prestaties sneller te verbeteren dan de andere brouwerijen. Om deze snelle verbetering te realiseren heeft de brouwerij Zoeterwoude de ambitie om voorloper te zijn in het TPM programma. Daarom, was in 2003 deze brouwerij bij de eerste lichting die van start ging met het implementeren van TPM. In februari 2013 heeft de Brouwerij de bronzen fase voltooid. Deze stap heeft 10 jaar geduurd in tegenstelling to de verwachte 3 tot 5 jaar.

Ondanks het brouwerij management deze overschrijding van de voorgeschreven implementatie duur niet direct als een mislukking beschouwd, wordt het wel als een probleem beschouwd dat deze overschrijding niet van te voren werd verwacht. Nu de brouwerij op het punt staat te starten met de implementatie van de Zilveren fase, heeft het brouwerij management de behoefte uitgesproken van een beter beheerste implementatie van deze fase. Daarom is het doel van dit onderzoek om het TPM implementatie proces te onderzoeken en te verbeteren.

Het Total Productive Management Programma

TPM is een continue verbeter filosofie die afkomstig is uit Japan met het hoogste doel om excellente processen te creëren. De TPM filosofie is gebaseerd op vier principes:

 Het verminderen van verliezen leid tot excellente processen  Verbeterde operationele standaarden leiden tot minder verliezen

 Een verbeterd probleem oplossend vermogen leidt tot verbeterde standaarden

 Het ontwikkelen van methoden en vaardigheden leid tot een beter probleem oplossend vermogen

Het realiseren van TPM wordt uitgevoerd door zogenoemde pilaren. Elke pilaar is verantwoordelijk voor aandachtsgebied van deze realisatie, bijvoorbeeld veiligheid of preventief onderhoud. Iedere pilaar is binnen dit aandachtsgebied voor een deel van de

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verliezen, de operationele standaarden, het probleem oplossend vermogen en het ontwikkelen van de methoden en vaardigheden.

Het TPM award system bestaat uit drie opvolgende fases (Brons, Zilver, Goud) die gemeten worden doormiddel van vier type criteria:

 Pilaar richtlijn audit score  Voldoen aan de killer criteria  Heineken Manufactoring Star score  Werkvloer indicator criteria

De pilaar richtlijnen en de killer criteria beschrijven hoe het verbeterproces uitgevoerd zou moeten worden in termen van TPM. Het verschil tussen deze twee criteria is dat de pilaar richtlijnen invulling geven aan een aandachtsgebied terwijl de killer criteria van toepassing zijn op de gehele brouwerij. De Heineken Manufactoring Star score en de werkvloer criteria beschrijven werk operationeel resultaat behaald moet worden. De Heineken Manufactoring Star is daarbij een balanced score card gebaseerd op de 23 belangrijkste brouwerij KPI’s, zoals productiviteit en ziekteverzuim. De werkvloer indicatoren zijn operationele indicatoren op het gebied van proces betrouwbaarheid, stabiliteit en kwaliteit.

Analyse van de Bronzen Fase

Door de implementatie van de bronzen fase te beoordelen aan de hand van de beheersings criteria van in ’t Veld is geconcludeerd dat het project niet op beheerste wijze is uitgevoerd. De belangrijkste beheersings problemen die gevonden zijn:

 De voortgang werd bepaald aan de hand van de audit score

 Het brouwerij personeel (initieel) geen kennis van de beoogde doelen  De killer criteria zijn niet toegewezen

 Geen sturing op implementatie duur

 De beschikbare middelen werden snel toegewezen aan operationele problemen  Beperkte toewijding aan planning

Door het gebrek aan implementatie beheersing was het niet mogelijk om een schatting te geven over de benodigd inspanning en tijd. Door te kijken naar de aspecten die waaruit het project spanningsveld bestaat tussen kwaliteit, project duur en middelen kan worden geconcludeerd dat er beperkte ruimte was om toe te geven op kwaliteit. Bovendien was er weinig toewijding aan de duur van de projecten terwijl de beschikbare middelen onder druk stonden van de dagelijkse operatie. De combinatie van deze factoren heeft geleid tot de overschrijding van de implementatie duur.

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Systeem analyse van TPM implementatie

Om te bepalen of de gevonden problemen toegeschreven kunnen worden aan het huidige TPM implementatie proces, is dit proces geanalyseerd aan de hand van de Delftse Systeemkunde. Er is geconstateerd dat het TPM proces op de Brouwerij bestaat uit twee deel processen: TPM uitvoering en TPM ontwikkeling. Doormiddel van TPM uitvoering worden de operationele standaarden verbeterd. TPM ontwikkeling is het proces waarbij de organisatie uitgerust wordt met de methoden en vaardigheden zodat het TPM uitvoeringsproces wordt verbeterd. De implementatie van het TPM programma heeft betrekking op het TPM ontwikkelingsproces.

Wat betreft het TPM ontwikkeling proces zijn twee problemen geïdentificeerd. Ten eerst dat er geen confrontatie en afstemmingsstap aanwezig is. Het doel van deze stap in het innovatie model is om het beleid af te stemmen en te komen tot definitieve doelen. Ten tweede is er geen overkoepelende project beheersing aanwezig waardoor de individuele pilaren zelf sturend zijn.

Probleemstelling en onderzoeksvraag

De problemen zoals ervaren tijdens de Bronzen fase kunnen gerelateerd worden aan de conclusies van de systeem analyse door middel van twee probleemstellingen. De eerste is dat er geen heldere en haalbare doelen gesteld zijn. De tweede is dat de implementatie niet beheerst is als een project. Op basis van deze probleemstellingen is de onderzoeksvraag gesteld als:

Hoe kan het confrontatie en afstemmingsproces ontworpen worden zodat deze voorziet in heldere en haalbare doelen en hoe kan de projectbeheersing ingericht worden zodat TPM implementatie beheerst wordt als een project?

Om deze vraag te beantwoorden moeten er twee proces elementen ontworpen worden, een confrontatie en afstemmingsproces en een projectbeheersings functie.

Ontwerp van het confrontatie en afstemmingsproces

Het doel van het confrontatie en afstemmingsproces is om de generieke criteria, zoals deze zijn opgesteld door Heineken’s centrale TPM organisatie, te vertalen in heldere en haalbare doelstellingen voor de specifieke brouwerij. De SMART methode stelt dat doelen Specifiek, Meetbaar, Acceptabel, Realistisch en Tijdgebonden moeten zijn. Aan de hand van deze eisen zijn er vier processtappen gedefinieerd voor het confrontatie en afstemmingsproces; vergelijk de as-is en to-be situatie, bepaal de aanvaardbaarheid, stem de criteria af op de organisatie structuur en plan de activiteiten in een master plan.

Deze processtappen moeten uitgevoerd worden voor de vier type criteria, vandaar dat de invulling van de processtappen specifiek dienen te zijn voor elk van de criteria. Figure 2 geeft

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weer. De benodigde tools om deze processen uit te voeren zijn ook bij het ontwerp inbegrepen.

Figure 2 Confrontatie en afstemmingsproces samenvatting

Doormiddel van de uitvoering van het confrontatie en afstemmingsproces zijn de generieke criteria getransformeerd tot gepland overzicht van alle benodigde acties om de TPM implementatie uit te voeren.

Ontwerp van de projectbeheersing

Het tweede onderdeel van het ontwerp is de projectbeheersing die er voor moet zorgen dat de implementatie als een project beheerst wordt. Om hieraan te voeldoen moet de projectbeheersing bestaan uit drie aspecten:

 Aansturen van de uitvoerende individuele pilaren  Verzorgen van de coördinatie tussen de pilaren  Verifiëren van behaalde resultaten

De eerste functie, het aansturen van de pilaren, gebeurt door de eisen te vertalen in standaarden voor de pilaren. Deze standaarden omvatten de kwaliteit, de beschikbare middelen en de duur. Om aan deze functie te voldoen is er een dashboard ontwikkeld om de voortgang en de behaalde resultaten te kunnen monitoren. Indien een van deze indicatoren afwijkt, zal ingegrepen moeten worden door middel van de aansturing.

Ondanks er coördinatie tussen de pilaren voornamelijk vindt tijdens het afstemmingsproces zal gedurende de uitvoering de projectbeheersing afwijkingen moeten coördineren. Om deze functie te kunnen vervullen zullen periodiek afwijkingen van de planning gerapporteerd en afgestemd moeten worden.

De laatste functie die de project beheersing vervuld is het verifiëren van de behaalde resultaten. Vanuit het afstemmingsproces wordt een verwachte verbetering van de

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operationele resultaten aangeleverd. Indien deze resultaten niet bereikt worden zal er in de implementatie ingegrepen moeten worden doormiddel van de standaarden. Om afwijkingen te kunnen signaleren is een dashboard gemaakt waar de resultaten gevolgd kunnen worden.

Proof of concept

Om de werking van het ontworpen proces aan te tonen is het proces toegepast op de Zilveren fase van TPM implementatie bij de bouwerij Zoeterwoude. Hierbij licht de focus op het aantonen van het confrontatie en afstemmingsproces aangezien de projectbeheersing alleen aangetoond kan worden gedurende de uitvoering. De volgend paragrafen zullen de conclusies van het proof of concept weergeven per processtap.

Stap 1: Huidige situatie – Door het vergelijken van de as-is en to-be situatie is gevonden dat huidige werkwijze 43% van de pilaar richtlijnen en 39% van de killer criteria voor Zilveren TPM status afdekken. Om te voldoen aan de doelstellingen met betrekking tot de operationele resultaten zal de Heineken Manufactoring Star prestatie gemiddeld met 5,6% en de werkvloer indicatoren met 10,2% verbeterd moeten worden.

Stap 2: Aanvaardbaarheid – Door de aanvaardbaarheid van de criteria te beoordelen is gevonden dat 22% van de pilaar richtlijnen een onacceptabele inspanning/resultaat verhouding heeft en niet zullen worden uitgevoerd. De Heineken Manufactoring Star criteria zijn, met uitzondering van het ziekteverzuim, allen acceptabel aangezien deze haalbaar zijn en in lijn zijn met de lange termijn visie van de brouwerij. De werkvloer indicatoren zijn, met uitzondering van de gemiddelde tijd tussen stops en de gemiddelde tijd tussen storingen voor de fustlijnen, acceptabel.

Stap 3: Afstemming op de organisatiestructuur – De pilaar richtlijnen en killer criteria zijn afgestemd op de organisatiestructuur. Dit heeft geleid tot vier brouwerij brede projecten: 1) Autonoom onderhoud; 2) Kopieer en deel structuur; 3) End-2-end optimalisatie; en 4) evaluatie van operationele standaarden. De andere killer criteria zijn toegewezen aan een specifieke pilaar.

Stap 4: Master plan – De benodigde acties zijn gepland in een master plan. Gegeven de huidige beschikbare middelen gewenste kwaliteit niveau is de beste schatting dat Zilveren TPM implementatie 5 jaar zal duren. Deze implementatie duur is sterk afhankelijk van het kritieke pad van het implementeren van autonoom onderhoud stap 4, welke de verplaatsing van technische en technologische taken naar de operator betreft.

Vanuit de bevindingen van het proof of concept kan de business case van Zilveren TPM implementatie opgesteld worden. De totale kosten van de implementatie worden geschat op € 4.960.000 en de verwachte jaarlijkse besparing wordt geschat op € 2.138.000. Aan de hand van deze cijfers is de netto contante waarde van het project berekend op € 6.523.000, waardoor de TPM implementatie een financieel gunstig project is. Met behulp van de netto

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contante waarde berekening kan ook geconcludeerd worden dat zelfs als de kosten 150% hoger uitvallen, het project financieel haalbaar is.

Met behulp van de proof of concept is aangetoond dat het proces een uitgebreid en concreet overzicht verschaft van de doelen en benodigde inspanning voor de Zilveren fase. De betrokkenen zijn het er over eens dat door middel van dit proces een beter inzicht is gekregen in het project. Door de uitvoering van het proof of concept is het brouwerij management, van te voren, geconfronteerd met een verwachte implementatie duur van 8 jaar. Op basis van dit inzicht is besloten de beschikbare manuren voor de implementatie van Autonoom onderhoud stap 4 te verdubbelen om in staat te zijn het project in 5 jaar te kunnen afronden. Bovendien heef het de centrale TPM organisatie de aanpak en de bijbehorende tools geprezen. Mede daarom is deze werkwijze uitgebreid naar alle referentie brouwerijen in Europa om de Zilveren TPM implementatie voor te bereiden en te beheersen.

Conclusies

Het doel van het onderzoek is om de beheersing van TPM implementatie te verbeteren bij de Heineken Brouwerij Zoeterwoude. Doormiddel van de analyse van de Bronzen fase en de systeem analyse zijn de factoren geïdentificeerd die de oorzaak zijn van de overschrijding van de implementatie duur. De problemen zijn geformuleerd als een gebrek aan heldere en haalbare doelstellingen en een gebrek aan overkoepelende project beheersing. Om deze problemen te op te lossen is een herontwerp gemaakt van de project beheersing, bestaande uit een confrontatie en afstemmingsproces en een overkoepelende implementatie beheersing. Het confrontatie en afstemmingsproces heeft zijn functie bewezen door middel van het proof of concept. De project beheersing zal zijn functie moeten bewijzen gedurende de implementatie van de Zilveren fase.

Ter afsluiting van het onderzoek zijn er drie aanbevelingen aan het Brouwerij Management:  Het doel moet het middel rechtvaardigen

 Kies bewust wat niet te doen

 Bekijk het besparingspotentieel bij de ondersteunende functies  Deel mislukkingen

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7 Proof of Concept: Confront and Tune Process ... 51 7.1 Tuning of Pillar Guidelines ... 51 7.2 Tuning of Killer Criteria ... 54 7.3 Tuning of HMS Criteria ... 60 7.4 Tuning of Shop Floor indicator criteria ... 66 7.5 Business case of Silver ... 70 7.5 Concluding Remarks ... 73 8 Conclusions and recommendations ... 77

8.1 Conclusion ... 77 8.2 Recommendations ... 80 9 References ... 82 Appendixes ... 85

B: Scientific Research Paper ... 86 B: Contact Information ... 77 C: Detailed Company Profile Heineken ... 78 D: Operations at the Zoeterwoude Brewery ... 84 E: Organizational Structure of the Zoeterwoude Brewery ... 87 F: Description of TPM Execution ... 90 G: Description of TPM Organizational Structure... 95 H: TPM Implementation Frameworks ... 100 I: Operational Results Since TPM Implementation ... 104 J: Proof of Concept Interview Overview ... 106 K: Acceptability of Pillar Guideline Gaps ... 107 L: Comparison As Is and To Be Situation Killer Criteria ... 110 M: Tuned Actions per Executing Organ ... 111

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List of Figures

Figure 1 Confrontation and tuning process summary ... vi Figure 2 Confrontatie en afstemmingsproces samenvatting ... xii Figure 3 Global Presence of Heineken ... 1 Figure 4 Companies using Solving Efeso’s WCOM TPM Approach ... 2 Figure 5 TPM Premises and Organisation ... 4 Figure 6 TPM Implementation Phases ... 5 Figure 7 Heineken Head Office and Brewery Zoeterwoude ... 5 Figure 8 Production Cost of Heineken Breweries ... 7 Figure 9 Report Outline ... 8 Figure 10 Characterization of Bronze, Silver and Gold TPM Organization ... 12 Figure 11 Calculation of Benchmark Score ... 13 Figure 12 Categorization of Award Criteria ... 14 Figure 13 Project Tension Field Triangle ... 15 Figure 14 SWOT analysis bronze ... 18 Figure 15 Systems Black Box ... 19 Figure 16 Rich Picture of TPM Activities and Stakeholders ... 20 Figure 17 Subsystems in Rich Picture; TPM Execution and TPM Development ... 21 Figure 18 Total Model ... 23 Figure 19 TPM Development Subsystems ... 23 Figure 20 Innovation Model for TPM Development ... 24 Figure 21 Control Structure of Pillar Plans... 25 Figure 22 Tuning process steps and intermediate products ... 34 Figure 23 Tune process sub processes ... 34 Figure 24 Tool for comparing the as is and to be situation for pillar guidelines ... 36 Figure 25 Map Ease and Effect ... 37 Figure 26 Tool for comparing the as is and to be situation and the acceptability ... 37 Figure 27 Pillar responsibility overview ... 38 Figure 28 Master plan template ... 38 Figure 29 Tool for comparing the as is and to be situation for killer criteria ... 39 Figure 30 HMS gap calculation sheet ... 41 Figure 31 Part of the SFI gap calculation sheet ... 42 Figure 32 Confront and tune process summary ... 44 Figure 33 Control process design ... 47 Figure 34 TPM implementation progress dashboard ... 49 Figure 35 Characterization of pillar guidelines gaps ... 52 Figure 36 Example of calculation of priority ... 52 Figure 37 Ease and Effect Zoeterwoude ... 53

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Figure 38 Priority Distribution ... 53 Figure 39 Pillar guidelines responsibility focussed improvement ... 54 Figure 40 Characterisation of Killer Criteria ... 55 Figure 41 Example of a pillar activities summary ... 57 Figure 42 Delivery schedule of completed AM machines ... 58 Figure 43 Part of master plan ... 58 Figure 44 Autonomous maintenance step 4 planning ... 59 Figure 45 Current performance and target Vision 2015 versus Silver criteria ... 62 Figure 46 Historical cost leadership performance compared to Silver criteria... 63 Figure 47 Capital Placement per Production Volume ... 63 Figure 48 Historical customer satisfaction performance compared to Silver criteria ... 64 Figure 49 Historical social responsibility performance compared to Silver criteria ... 64 Figure 50 Historical org. and people development performance compared to Silver ... 65 Figure 51 Historical cost leadership performance compared to Silver criteria... 65 Figure 52 Course of cost and revenue over time ... 72 Figure 53 Confrontation and tuning process summary ... 78 Figure 54 Systems black box... 87 Figure 55 Systems Total model ... 87 Figure 56 Detail model of TPM development ... 88 Figure 57 Detail model implementing develop TPM methods ... 88 Figure 58 Confrontation and tuning process steps ... 89 Figure 59 Confrontation and tuning process summary ... 89 Figure 60 Pictures of Heineken from the period between 1864 and 1889 ... 79 Figure 61 Pictures of Heineken from the period between 1927 and 1945 ... 79 Figure 62 Pictures of Heineken from the period between 1954 and 1975 ... 80 Figure 63 Company logo’s of major takeovers of Heineken between 2003 and 2013... 80 Figure 64 Graph of largest Brewers in the world... 81 Figure 65 Graph of largest beer brands in the world ... 82 Figure 66 Ownership structure of Heineken ... 83 Figure 67 Main Processes at Zoeterwoude Brewery ... 84 Figure 68 Brew house interior and filtration area ... 85 Figure 69 Overview Main Packaging Hall ... 86 Figure 70 Warehouse AGV and export handling dock ... 86 Figure 71 Functional Structure of Zoeterwoude Brewery ... 87 Figure 72 Deployment of Waste ... 90 Figure 73 Illustrative example of Problem Solving Hierarchy ... 91 Figure 74 Problem solving hierarchy ... 92 Figure 75 Summary of minor stop reduction team route... 93 Figure 76 Execution securing methods ... 94

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Figure 77 TPM Pillar Framework Heineken ... 95 Figure 78 TPM Organization ... 99 Figure 79 European productivity performance since TPM implementation ... 104 Figure 80 OPI performance index since TPM implementation ... 104 Figure 81 Productivity performance since TPM implementation ... 105 Figure 82 Resource consumption since TPM implementation... 105 Figure 83 Operating expenses since TPM implementation... 105

List of tables

Table 1 TPM criteria in terms of SMART ... 33 Table 2 Policy gaps per category ... 51 Table 3 Gaps on Killer Criteria ... 55 Table 4 Killer Criteria Allocated to Executive Organ Zoeterwoude Brewery ... 56 Table 5 Comparison of current required performance for Silver ... 60 Table 6 Performance compared to the long term vision and the silver targets ... 61 Table 7 Yearly HMS performance targets ... 66 Table 8 Mean Time Between Failures ... 67 Table 9 Mean Time Between Stops ... 67 Table 10 First time right indicators... 68 Table 11 Yearly SFI performance targets ... 70 Table 12 Cost estimation of Silver TPM implementation ... 71 Table 13 Revenue estimation of TPM implementation ... 72 Table 14 Present value calculation of Silver TPM implementation ... 73 Table 15 Heinkenen’s facts and figures and Revenue per region ... 80 Table 16 Twelve step TPM implementation by Nakajima (1988) ... 101 Table 17 The three phase TPM implementation by Hartmann (1992) ... 102 Table 18 The 5-phase TPM implementation framework of Productivity Inc. (1999) ... 103

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1 Introduction

This master thesis focuses on the implementation of a global process improvement program at Heineken Zoeterwoude Brewery. To get an understanding of the context of this subject, this chapter introduces the supply chain profile of the company Heineken (paragraph 1.1) and the improvement philosophy called Total Productive Management (paragraph 1.2). Paragraph 1.3 outlines the specific challenges for Zoeterwoude Brewery which leads to the research objective (paragraph 1.4). Finally an outline of the report is presented in paragraph 1.5.

1.1 Supply Chain Profile Heineken

Heineken produces over 250 international, regional, local and specialty beers or ciders. The company prides itself on being the most international brewer in the world with over 165 breweries in over 70 countries (Heineken NV, 2012). The global presence of the company is visualized in Figure 3. With a total production of 221 mln hectoliter (hl) of beer, a global market share of 11% and a total revenue of € 18,3 billion, Heineken is the third largest brewer in the world (Heineken NV, 2012). The largest brand in the portfolio is Heineken with a total production volume of 27,4 mln hl and an estimated brand value of $ 3,9 billion (Interbrand). A more detailed company profile of Heineken can be found in Appendix C, this will cover Heineken’s history, key figures, brands and the organizational structure.

Figure 3 Global Presence of Heineken

In 2000 Heineken belonged, with SAB, Anheuser-Busch, InBev and Miller Brewing, to the top 4 players in the market and together they had a global market share of 22%. But after the turn of the millennium a global consolidation of the beer industry started and the competition

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increased. In 2012 Heineken still belongs to the top 4, with AB-InBev, SabMiller and China Resources Enterprises who now together represent 41% of the market.

Heineken’s mission is to remain a large independent player in the global beer market. To retain and strength their position the Fit to Fight program was initiated. An essential part the Fit to Fight program is to develop Heineken’s supply chain in a world class supply chain. To give substance to this goal Heineken started trials in 2000 with the Total Productive Management (TPM) continuous improvement method. In 2002 the first tryouts where done with a TPM implementation program. After just one year of try-outs TPM was adopted in the Company Strategic Program and the decision was made for a complete TPM roll-out to all Breweries. Jean-Francois van Boxmeer, CEO of Heineken, stated: “TPM is a program that ultimately translates in higher productivity, fewer losses of raw materials, water, energy and a better product. That is what we are looking for!”.

1.2 Heineken’s Total Productive Management Program

Heineken’s Total Productive Management (TPM) program is an interpretation of World Class Operational Management (WCOM). As Figure 4 shows WCOM is especially popular with European based multinationals.

Source: Solving Efeso company presentation

Figure 4 Companies using Solving Efeso’s WCOM TPM Approach

The WCOM approach consists of three elements: a centralized improvement agenda, improvement tools and accompanying training. These elements are mainly derived from the continuous improvement philosophy total productive maintenance, but also contain aspects from lean and six sigma. To outline Heineken’s Total Productive Management program next sections will address the principles of the total productive maintenance philosophy (section

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1.2.1), the organizational structure (section 1.2.2) and the three phased approach (section 1.2.3).

1.2.1 Background: Total Productive Maintenance

Total Productive Maintenance, also abbreviated as TPM, was first introduced by the Japanese company NipponDesco Co. Ltd, supplier of the Toyota Motor Company in the year 1971 (Levitt, 2010). Badury (2000) described TPM as follows: TPM is a maintenance philosophy that aims at optimizing equipment effectiveness, eliminating break downs and promoting autonomous maintenance by operators trough day-to-day activities involving the total workforce. TPM is more than just a maintenance concept but rather an equipment centred continuous improvement method (Ahuja & Khamba, 2008). This method has as a main focus to continuously improve the overall equipment efficiency. Although the main focus of TPM is the overall equipment efficiency, the ultimate goal is to have zero defects, zero accidents and zero breakdowns (Nakajima, 1988). This ultimate goal represents a situation where all equipment can be operated at 100% capacity 100% of the time. The main underlying driver in the TPM is employee engagement (Levitt, 2010). By shifting the power from management to the operator, the operator will feel ownership and accountability about the equipment. Levitt (2010) depicted this ownership as follows: “In TPM the operator’s machine should be like owning a 1967 Corvette. When you own one, you would know every sound inside out, you are always thinking what would be best for the car and you would not mind to get your hands dirty. True loving care which you would enjoy”.

1.2.2 Embedding TPM in the Organisational Structure

The ultimate goal of TPM is to increase business results by creating excellent processes, but this is an hollow statement without the underlying essence of the TPM philosophy. The explanation of the essence is done using the four main premises. These premises combined with the goal of TPM, achieving better excellent processes, leads to the TPM philosophy reasoning as stated in Figure 5.

Figure 5 also illustrates the organizational structure of the so called pillars. There are 9 pillars:

Safety, Health & Environment, Focussed improvement, Autonomous maintenance, Planned maintenance, Progressive quality, Training & Education, Brewery logistics, Early equipment management and New product introductions & customer value creation. Each pillar in its own focus area eliminates assigned losses, improves assigned standards and improves the problem solving capability by improving the methods and people. A detailed description of the pillar responsibilities can be found in Appendix G.

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Improved problem solving capability of organization Improved standards Fewer of losses Improving methods and people Excellent processes

Elimination of losses leads to excellent processes

Improved standards lead to fewer losses

An improved problem solving capability leads to improved

standards

Developing methods and people lead to an improved

problem solving capability

Organizational pillars

Figure 5 TPM Premises and Organisation

Participation in the program is obligatory, but roll out is in phases. The corporate TPM office devises the content and criteria of the program, which is transmitted towards all Breweries. Within the Brewery the pillars are responsible to implement their respective focus area. To support the pillars there is a Brewery TPM office that provides the specific TPM knowledge to the pillars.

1.2.3 Three Phase Roll-Out Program

The TPM program consist of three phases: Bronze, Silver and Gold. Each phase has its own theme, objectives and evaluation criteria and comes with a set of organizational objectives and operational requirements. Every Brewery starts with implementing Bronze and will only start with Silver implementation after it is Bronze certified. A schematic overview of this stepwise implementation program is illustrated in Figure 6. The Bronze phase can be characterized as the TPM startup phase. In this phase the Brewery has to get acquainted with the TPM method and has to create stability in its operational and non-operational processes, hence restore basic conditions. The estimated timescale for the road to Bronze is 3-5 years. In the Silver phase, the organization put the, now adapted, TPM method to use and demonstrate an increased and extended problem solving capability. In the Gold phase the central objective is to utilize the buildup problem solving ability as a competitive advantage and to become a TPM World Class Brewery Organization.

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Source: Brewery TPM Award Certification System presentation

Figure 6 TPM Implementation Phases

1.3 Heineken Brewery Zoeterwoude

In 1975 the Zoeterwoude Brewery was built to replace Heineken’s existing Breweries in the Netherlands. With a technical production capacity of 15 mln hl and a total output of close to 10 mln hl, it is the largest Brewery of Heineken and the largest Brewery in Europe. Therefore it is also considered the flagship Brewery of Heineken. Figure 7 shows the Brewery and the adjacent office of Heineken Nederland and global supply chain.

Source: GSC audit presentation 2012

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Operations at the Brewery roughly consist of three steps: brewing operations, packaging and logistics. A detailed description of these production processes can be found in appendix D.

Since beer production is done in high volumes of a standardized product, all processes are highly automated. Especially in brewing and logistics, the man-machine separation is high. The high automation rate results in a high capital intensity: for Zoeterwoude Brewery the capital placement is € 1,27 billion (Heineken Global Supply Chain Control, 2012).

The finished products from the Zoeterwoude Brewery are mainly destined to the United States (67%) and Dutch market (22%). The export situation regarding the United States is an exception on the predominantly local production within Heineken. The main reasons for exporting are the relatively inexpensive transportation and the willingness of consumers to pay a premium for imported beer. Transportation is relatively inexpensive since the Zoeterwoude Brewery can distribute the products via the Rotterdam harbor and most of the US population lives along the shoreline.

The supply organization of Heineken is based on a free supply and demand principle. This means any Heineken regional sales organization may purchase products from every Brewery. The combination of transportation cost and production cost determines the most interesting source of supply. Due to the free marked approach, the right to exist for a Brewery is directly linked to the ability to produce competitively. The competitive position of the Zoeterwoude Brewery has become more important since Heineken took over the beer activities of beverage producer FEMSA in 2011. Through this acquisition, three very large Mexican breweries became Heineken Breweries. These Breweries are: Monterrey (8,9Mhl), Orizaba (8,5Mhl) and Toluca (3,9Mhl). The Monterrey and Orizaba Breweries are the biggest breweries of Heineken after Zoeterwoude. These breweries have a high operational competitiveness as is showed in

Figure 8. Besides the operational competitiveness these Breweries are geographically close to

the customer HeinekenUSA and therefore form a direct threat to the demand of the Zoeterwoude Brewery.

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Figure 8 Production Cost of Heineken Breweries

The fight for operational competitiveness is made more difficult by declining volume of the Brewery’s largest customers (HeinekenUSA & HeinekenNL) and an increasing number of stock keeping units (SKU’s). The declining production volume will put a stress on the capital intensity of operations, since the capital intensity will not reduce when production volume reduces.

1.4 Research objective

To improve the operational competitiveness the Zoeterwoude Brewery must improve their performance faster than the competing Breweries. To realize this faster improvement the Zoeterwoude Brewery has the ambition to be one of the frontrunners in the TPM program. The Brewery Zoeterwoude has completed the first step of the three step TPM program in February 2013. This first step however took 10 years instead of the intentded 3 to 5 years. Although Brewery Management does not directly consider the exceedance as a failure, that the longer implementation duration was not a deliberate choice. Now the Brewery is on the verge of starting the Silver phase, Brewery Management has stated the need for a more controlled implementation.

Currently 17 of the 134 participating Breweries achieved Bronze and none of them has yet achieved Silver or Gold status. This means there is not yet found a best practice on how to start implementation of the Silver phase in the Breweries. Therefore the objective of this research is to identify the causes for the lack of control in TPM implementation and to improve control by providing a process (re)design.

0 2 4 6 8 10 12 14 16 O riz ab a M on ter re y To lu ca Zo ete rw ou de € / hl

Production cost

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1.5 Report Outline

The remainder of this report consists of 7 chapters. A schematic overview of this outline is presented in Figure 9. First part of the report focuses on the analysis of the Bronze project (chapter 2) and a system analysis using Delft Systems Approach (chapter 3). The objective is to find the root causes for the problems regarding TPM implementation. Based on the analysis the research question is posed in chapter 4.

The second part of the report describes the design of the problem solution. This solution phase consists of a confrontation and tuning process (Chapter 5) and a project control design (Chapter 6). Chapter 7 demonstrates the working of the designed processes by initial tuning of the Silver criteria for Zoeterwoude Brewery.

Finally chapter 8 concludes the research by answering the research question as posed in chapter 4. In addition, recommendations for Zoeterwoude Brewery Management are presented.

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2 Analysis of the Bronze Implementation

The objective of the first part of this research is to find the root causes for the issues regarding TPM implementation. Paragraph 2.1 elaborates on the characterization of the award system. To assess whether the implementation of TPM is executed in a controlled way, the control criteria of in ‘t Veld are assessed in Paragraph 2.2. Finally Paragraph 2.3 presents a SWOT analysis to identify the strengths, weaknesses, opportunities and threats of the implementation of Bronze status.

2.1 TPM Award System

As stated in the introduction the TPM system consist of three phases. This paragraph outlines what criteria need to be achieved in order to achieve the next status. Moreover, it briefly describes how the project of Bronze implementation was addressed by Zoeterwoude Brewery.

2.1.1 Characterization of TPM Phases

The essence of the TPM program is to increase the problem solving capability by developing people and methods. The level application of TPM standards can be classified in four levels:

 No TPM standards used

 Development to solve problems

 Development to achieve business goals

 Development to create competitive advantage

These TPM levels however cannot be directly linked to a specific phase since the level of TPM required also depends on the process step. For a Beer brewer the primary process is to make and package beer, the secondary process is to source raw materials and to deliver the finished product and the tertiary processes are the supplier and customer processes. The required TPM level to qualify for a certain type of certification depends on the process step and the certification level. The bronze award represents achieving the application of TPM standards to solve problems for the primary process. The Silver phase represents further use of the application of standards for the primary process and widening the scope to the secondary processes. The Gold phase in its turn again represents further improving the existing TPM levels and widening to the tertiary processes. Figure 10 shows a graphical representation of the characterization of the organizations.

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Bronze TPM organization Silver TPM organization Gold TPM organization Silver TPM organization Gold TPM organization Gold TPM organization Silver TPM organization Gold TPM organization Gold TPM organization Supplier process connection

Source make Deliver

Customer process connection

Supply chain section

L e v e l o f p ro b le m s o lv in g c a p a b il it y v ia T P M m e th o d s

TPM methods are used to solve problems TPM methods are used to

achieve business goals TPM methods are used to create competitive advantage

No TPM methods used

Figure 10 Characterization of Bronze, Silver and Gold TPM Organization

2.1.2 Award Criteria

Within Heineken there is a companywide assessment method to monitor the progress and achievement of TPM certifications. These assessments are done twice a year via global supply chain audits. To achieve a certain level of TPM (Bronze, Silver or Gold) there are four types of assessment criteria a Brewery all must pass: Heineken Manufacturing Star score (benchmark score), Shop floor indicators, TPM audit score, Killer criteria.

Heineken Manufacturing Star - The Heineken manufacturing star (HMS) is a yearly and

global benchmark based on a balanced scorecard between all Heineken’s breweries on the 23 most important KPI’s. These KPI’s include OPI Nona’s (equivalent to Operational Equipment Efficiency or OEE), Production productivity, water consumption, absent rate and taste tests. These KPI’s are divided into five categories: Productivity and cost leadership, customer satisfaction, social responsibility, organization and people development and quality. To achieve Bronze award a Brewery has to achieve a score of 50 to 85 weighted average. To grade the main process criteria a Brewery is rated a score from 0 to 100 in each category. The score for one category is determinate by underlying KPI’s. For example Productivity and cost leadership depends on the Operational Performance Indicators (equivalent to Operational Equipment Efficiency) of bottle, can and kegs, the productivity of the Brewery in hectoliters per FTE and the efficiency of raw materials.

The score from 0 to 100 is calculated by ranking the performance against the performance of all other Heineken Breweries. The worst performing brewery sets the low mark and the best performance sets the high mark. The score is the relative position from 0 to 100 on the interval between the low and the high mark. In Figure 11 the relation between the absolute KPI score and the benchmark score.

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0 100 Best performer

Worst performer

Resulting benchmark score

50 100

Absolute KPI score

Figure 11 Calculation of Benchmark Score

Shop Floor Indicators - The shop floor indicators (SFI) are Mean Time Between Failure

(MTBF), Filler Mean Time Between Stop (MTBS) and First Time Right (FTR) of Packaging, Production, Finished product, Micro and laboratory. The MTBF is a measure for reliability, the MTBS is a measure for speed losses and FTR is a measure for production quality. To achieve a certain level the Brewery must comply with all predefined performances.

TPM Audit Score - The TPM audit score is a measure for the quality and progress of TPM

implementation for the focus area of each pillar. Twice, a year TPM audits are held at all Breweries by the Corporate TPM office. The requirement for the TPM audit score is for Bronze 78, whereas the Zoeterwoude Brewery achieved an audit score of 81 on the Bronze scale. The audit score consists of multiple elements, however the required workload for each element can highly differ.

Killer criteria - The killer criteria represent an additional list of TPM elements – not

dedicated to a pillar - that have to be fully in place. These killer criteria are the most essential and are comprised of elements of all pillar areas. If only one would not be in place, the Brewery could not pass for the certification.

In Figure 12 the criteria are grouped in operational targets and targets for TPM development.

The targets for TPM development describe how the improvement process should look like and the targets for operational performance describe to what results they should lead. The reason for setting operational and development targets is to ensure that the right methods are used in right maturity of improvement. For example if a Brewery has developed all methods but lacks the operational improvement, the less advanced tools are better suitable for the basic improvements of operational performance. On the other hand a Brewery that meets the operational performance criteria but has not developed TPM up to the required level, should further increase the performance using the less advanced tools.

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Figure 12 Categorization of Award Criteria

2.2 Analysis of Implementation of Bronze

The expected duration for implementation of the Bronze status was estimated at 3-5 years, however it took Zoeterwoude Brewery over 10 years to achieve the goal. Moreover, no reliable estimation could be given of the time that was required to reach Bronze status. This indicates a lack of control. To identify possible control issues the control criteria of in ‘t Veld are used. These criteria state that in order for a process to be executed in a controlled matter at least three essential elements have to be in place. These essential elements are:

1. The target state of the system has to be known 2. The system has to be able to reach the target state

3. There have to be possibilities to influence the system behaviour and the relation between the interference and the resulting system behaviour have to be known Following sections address whether the criteria were met during the implementation of Bronze at Zoeterwoude Brewery.

2.2.1 Target State has to be Known

Zoeterwoude Brewery started as one of the first Breweries with the implementation of TPM program in 2003. At that moment, the program was bought from Efeso and therefore not dedicated to the specific needs of the organization. This means that in the early days the consultants of Efeso were involved to run the program at the Brewery. Their role was to explain the principles and to train the pillars. With the support of Efeso each pillar made steps towards the ultimate goal of excellent processes. The activities that were required to achieve the next step, were defined by the pillars individually. As the Bronze project was new to the organization, the people involved had no idea what to expect from the journey. Moreover, during the implementation phase at the Brewery the development of the policy was in full swing and the target state was only known in 2011, 8 years after the Zoeterwoude Brewery started implementation. Therefore a proper expectation of the effort (resources and time) could not be comprised. Another issue regarding the targets state is a mismatch between the killer criteria and the organizational structure. The pillar policies state the pillar responsibilities

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and the killer criteria state collective responsibilities. As these criteria employ multiple parties, the responsibilities and contribution of every pillar to the killer criteria should be clearly outlined. During the implementation of the Bronze phase the work was not divided and effectively there was no executing party employed for the realization of the killer criteria.

2.2.2 Ability to Reach the Target State

Although the goals are ambitious and effort might differ, each Brewery must be able to achieve the different phases of the TPM program. However, measurement of the progress should be questioned. During the Bronze phase progress was measured using audit scores. These audits were conducted by delegates from the corporate TPM office and members of Efeso. They checked whether the way of working is in line with the defined criteria. As the element of the audit score can differ a lot in required work load, this score is considered not to be representative for the progress made. As a result the Brewery estimated three times in a row Bronze would be achieved in the next year. This has increased the perception that the project duration is not under control.

2.2.3 Possibilities to Influence the System

A project can be influenced in three aspects, quality, duration and resources. A common way of describing the tension field of these elements is in a triangle. Figure 13 gives a representation of the tension field triangle (Gardiner & Steward, 2000). The posed triangle indicates that project managers have three levers to influence project results: reduce the scope or quality of the deliverable, move the milestone date or apply additional resources. Usually a mix of these levers while managing a project. This concept is used to review the implementation duration of Bronze award at Zoeterwoude Brewery.

Quality / scope

Duration

Resources

Project tension field

Figure 13 Project Tension Field Triangle

Quality & Scope - The quality and scope aspects are embedded in the TPM program in

terms of minimum required audit scores and performance requirements. If the required level of quality is not met the Brewery cannot advance to the next phase. Therefore the quality aspect has not been an aspect upon which could be compromised. One way of compromising