Martin Ashcroft revisits HJ Heinz to see how the culture changing Heinz Global Performance System is driving sustainable continuous improvement through its sites all over the world.
When I last wrote about HJ Heinz two years ago 1, Gary Thomas, Director of Global Continuous Improvement and Risk Management, told me how lean and six sigma were being used to drive a step change in performance in the company’s North American production facilities.
He also gave me a heads-up on the next stage of Heinz’ continuous improvement program, which was even then being planned. “We are currently developing a global continuous improvement roadmap that takes the best processes, tools, and systems from all of our factories around the globe and integrates them into one production system,” he told me at the time. “We truly believe this will give Heinz a global competitive advantage.”
The new program is called Heinz Global Performance System (HGPS), and the first eight sites were launched in March 2009. Heinz has 74 production sites around the world, and the global continuous improvement team has over a third of them up and running the HGPS process. “We started with approval from our board of directors for just eight sites,” he says, “but when all the other sites started to see it, they just started pulling it. It wasn’t a push process. Now we’ve got nearly 30 sites up and running on HGPS in just over 15 months.”
HGPS marks a transition from a production system to a performance system. The advantage of this, Bob Ostryniec, Global Supply Chain Officer for Heinz believes, is that it pulls together the entire supply chain into one standardized continuous improvement approach—one standardized global program that everyone can follow, at their own pace, on the journey to become “world class”. All the elements of world class manufacturing, procurement and logistics are sequenced in this system
so they can be used at the right time in the improvement process.
“I would describe it as ‘just in time’ continuous improvement,” said Ostryniec. “It might sound fundamental and simple to some, but our performance system is all about the people. If we focus on developing the capabilities into our people by empowering them to lead change at all levels of our organization, the process improvements will come.
“We went around the world and looked at all the continuous improvement processes we had in Heinz,” he continues, “in Australia, Indonesia, all over Europe, North America and China and we came back with a war chest of different tools and methods that we apply around the world. But we noticed there were a couple of key things that we must do differently to enable further success. First, we must penetrate deeper into the organization with continuous improvement processes. Second, we needed a platform that helped us manage change throughout the organization. HGPS has bridged both gaps on people engagement and leading and managing the change.
“It was not the case everywhere, but for the most part our CI processes were project driven,” admits Thomas, “so that meant we really had the few and the proud—five or six people in every factory doing a lot of the work. You always depended on this six sigma black belt or that lean expert to get things done. So when we started to develop a performance system the philosophy behind it was, how do we tie all the tools together in a sequenced approach so we know we’re doing the right thing at the right time, while engaging line level employees in the process to drive the change and to make sure that it’s sustained?”
HGPS is designed to drive the organization from expert-based to a collaborative continuously improving culture that shares intellectual knowledge gained as the process matures during the five stage process. Stage one is the status quo, the expert-based, learn-as-you-go culture. Stage two is stabilization and awareness, understanding the baselines, where functional excellence emerges. Ownership at all levels of the organization starts to take place in stage three, where organizational excellence begins to flourish, and refinement and technology come to the fore in stage four, creating a learning and sharing organization. Stage five, the ultimate goal, is where world class becomes a way of life in a continuously improving culture. “Where we are right now is functional excellence,” says Thomas. “We might be really good at 5S, or teamwork, but we’re not great at everything. We have pockets of success, and that’s why we are still at stage two.”
It’s a long journey, and some factories will reach stage five before others, but at least they are all on the same road, with the same map. “First we engage the entire factory in leading and managing change,” says Thomas, meaning everyone, not just the recognized leaders and managers. “We then conduct a baseline assessment with the site to understand where the site is on the journey to world class.” The site then starts to develop its roadmap and the actions needed to start the transformation. “The performance system not only gives us a visual scorecard on the site gaps but it also provides the roadmap, training, templates and all best practices on specific topics from around the world that we can pull from.”
Although the goal is for each factory to work its way along the HGPS roadmap to become world class in five to seven years, the improvement process does not end there. “HGPS is a five to seven year journey that never ends,” stresses Thomas—even at sites that are more advanced, such as the sauce and ketchup factory in Elst in The Netherlands, which Thomas says could possibly reach world class level in four years. By the time they achieve that status, however, other things will have emerged which could be done to make them even better.
Progress is monitored and measured every step of the way, using the TRACC Continuous Improvement Management System provided by Heinz’ consultancy partner Competitive Capabilities International (CCI). This on line system provides the sites with a very specific roadmap for each implementation area based on their maturity, gives global visibility on status, allows sharing between sites and is available in 22 languages. It has proved itself with some of the world’s most recognized companies, including DuPont, MolsonCoors, Siemens, SABMiller and Coca-Cola. Heinz chose CCI after researching approximately 40 consulting firms around the world.
Being process-based, HGPS (powered by TRACC) ensures that improvements are sustainable by embedding best practices into the process. Thomas stresses that the process measures ‘people, practices and performance’. “In order to be a world class company, we’ve got to invest in our people to improve the processes that deliver the performance,” he explains. “If you’re driving performance without a rock solid process, then you will have a hard time sustaining the improvement because the practices are not embedded into those processes.”
When talking about HGPS, Thomas refers to “ownership” as a key ingredient for sustainable improvement. Ownership is often touted long and loud in management initiatives, but it can sometimes be a hollow platitude to promote public relations. Not so in this case.
The Heinz journey to world class has been designed as a five to seven year process to allow each site to determine its own rate of progress. “Obviously, we do have corporate goals for productivity, customer service, quality and safety, etc, but we actually let the site steering committee set their own goals for HGPS. The factory will come to us and say, ‘we did a baseline assessment of HGPS and we’re at a 1.2 now. Over the next 12 months, if we put these practices in place, we think we can get to a 1.8, and by doing that we can improve efficiency by such and such percent, cut waste by this much and drive quality improvement by this much. So they actually set their own goals by the practices they put in place, and their results are monitored by the regional CI group and the leadership teams.”
Any initiative will always have its share of doubters, but Thomas is more than pleased with the response from employees. Heinz has a mixture of union and non-union factories, and the unions, he says, have been fantastic.
The economic climate in the global downturn has also played a role in focusing the minds of employees on improvement, he believes. When the news is full of layoffs and factory closures every day, workers are motivated to embrace improvement to preserve their jobs. “At the time of an economic crisis I think every factory in the world is asking how they can gain a competitive advantage. With so many people laid off around the world, many that are still employed are starting to think and understand how lucky they are to still have a job,” says Thomas.
With 74 factories around the world, implementation of a major initiative like HGPS has to be carefully staged, because they cannot all come on stream at once. How do you decide where to start? That’s a question of having comprehensive information about the current performance of each site, and using it strategically. “Last time we spoke we mentioned the global supply chain task force,” says Thomas. “The task force identified opportunities in each of our sites globally, and we then took that data and went after where we thought the biggest opportunity was, based on cost and business strategy.”
That approach certainly makes sense, but Heinz has been flexible enough to accommodate requests from other sites that would not otherwise have been among the first to be chosen. “If a factory called us,” he says, “and didn’t have such a big opportunity, but said they wanted to start HGPS, we still went forward with them. There’s no better opportunity than a factory calling and asking to get started. What better motivation could you have?”
One of the precepts driving ownership of HGPS is that culture change starts with quick wins, especially where the process is high risk, high impact. It’s rather like the ‘low hanging fruit’ approach to lean manufacturing. Thomas uses Kitt Green, a factory near Wigan in Lancashire, UK, as an example. “When we say high risk we mean a line that is absolutely critical to our business, so if you think about all the baked beans we produce in Kitt Green, can making is pretty critical. If it’s not running we can’t produce the beans. High impact means if we can make an improvement it provides the business leaders the opportunity to expand the market place and drive more volume for the site and business. We have had many quick wins across the globe that have driven millions of dollars of improvements with the launch of HGPS.”
Another ingredient crucial to the success of an initiative like this is communication. You can have the best system in the world, but you must communicate it effectively to your workforce to maximize its potential. Understanding this, Heinz chose The Grossman Group to handle its communications. “We decided if we wanted to roll out a world class program we need to have a world class communication program with it,” says Thomas. “The Grossman Group has been known for its work in improving efficiency at McDonald’s, so our thought was that if they can help a 16 year old get engaged with their job, they should be able to help us.”
Instead of concentrating on global savings and figures that mean little to the individual employee, communication has been targeted at the grass root level, with newsletters highlighting individual achievements. “What we really want to talk about is Jim Smith on the can line, and what he and his team did to effect the improvement,” explains Thomas. “We actually identify employees and groups that are winning to drive that enthusiasm through the organization. Who doesn’t like to go to a stadium and somebody puts their name up in lights? We look at it the same way. How can we identify these people who are driving improvement throughout our company and put their name up on the big screen?”
Summing up the guiding principles of HGPS, Thomas stressed the goal to shift ownership deeper into the organization, by transferring knowledge to a more local level, which enables the transition from project to process. “When you go to conferences and hear people talking about projects, that tells you right away that they’re not focused on the process,” he explains. “We’re trying to shift away from that project based productivity to a process based system. Our employees are solving the problems on the floor, so they don’t have to turn into projects.” www.heinz.com
