Sector Spotlight

This paper presents how a Lean approach helped Ornua establish effective operational excellence in a relatively short period with a small, focused and flexible team.

SituationWhat started out as the Irish Dairy Board in 1961

became Ornua in 2015, a global agri-food co-op with

marketing and sales functions in 110 countries, sales

of €2.5 billion, and processing facilities in Africa,

Ireland, Germany, Saudi Arabia, Spain, UK and the

US.

To compete in the global dairy market, Ornua had to

establish a formal structure and framework to manage

operational excellence at each of its processing

facilities. This would involve taking a Lean approach

to carry out day-to-day quality work easier, better,

faster and safer, with less effort, less capital and less

time.

In late 2015, Ornua Operational Excellence

(OpEx) engaged Leading Edge Group to support

the establishment of an OpEx program across its

processing facilities.

ComplicationThe challenges facing the OpEx team at Ornua in late

2015 were not insignificant. Previously, the team had

worked successfully on numerous Lean initiatives to

save money, improve quality, capacity and delivery at

various processing sites. Although the improvements

were good, the approach taken was sporadic and was

being overtaken by the pace of change and growth

at Ornua.

Furthermore, the OpEx team had to work with

a relatively low level of Lean knowledge and

capability throughout the organization. This lack of

knowledge was compounded by a lack of overarching

OpEx vision, strategy and coordination between

departments within individual processing sites.

ResolutionInitially, the Ornua OpEx team engaged and got the

support of senior corporate management. The case

for change was made and the required investment

was approved. In 2016, the Group CEO, Kevin

Lane, launched “The Ornua Way” as the Group’s

formal Operational Excellence program. At this

stage Leading Edge Group were brought on board to

support the Ornua OpEx team.

“to compete in the global dairy market, Ornua had to establish a formal framework to manage operational excellence at each of its processing facilities”

“the OpEx team had to work with a relatively low level of Lean knowledge and capability throughout the organization”Operational

Excellence Whitepaper “Ornua – The Home of Irish Dairy”

Leading Edge Quarterly - Spring 2018

The aim of The Ornua Way was to ensure that

everybody in the organization was working on the

right thing and involved in making the business

better. A framework was developed to support each

processing facilities’ individual journey from daily

firefighting all the way to work area self-reliance and

organizational sustained growth.

GovernanceTo communicate strategy and prioritize

improvement, OpEx hit upon a governance structure

that would flow objectives downstream through

regular meetings, while communicating how-to

projects back up the chain. This involved:

CapabilityIt was important that, when introducing the Ornua

Way to the organization that every employee would

know what it was, how it impacted them, and

what they should do next. OpEx training provided

a common language, approach, and understanding

to key OpEx principles. Introductory White Belt

training was created and rolled out by site OpEx

representatives to every employee early in the life

cycle of the program.

Ornua did not have sufficient internal OpEx capability

to sustain the Ornua Way, so food industry specific

White, Yellow, and Green Belt training packs and

tools were created that would be owned and delivered

by Ornua staff.

The Ornua OpEx team worked with site leadership

and HR leaders to ensure that new hires were coming

The governance support mechanisms included:

Leading Edge Quarterly - Spring 2018

Yearly operations conference: To present bestpractice and communicate new policy.

Quarterly Board updates by the OpEx team:

To review high level impact of OpEx on the overall business.

Global Operational Excellence Steering Council:

To review progress on deployment and improvement initiatives at each facility.

Operational Excellence Implementation Council

at individual facilities: To review progress andselection of improvement initiatives.

from OpEx backgrounds and that strategic roles such

as supervisors and OpEx representatives would have

OpEx training.

Make it HappenIt was important that a process be put in place to

ensure that Ornua Way best practice could be easily

understood, engaged with, and deployed. The Ornua

Way Maturity Model (OMM) was created to assess

individual sites against best practice OpEx criteria,

outlining a trackable roadmap for each site.

Sites were assessed and rated on their ability to meet

fourteen operational excellence ‘ways’ outlined in the

Annual strategy based on site-specific medium-

term plans that aligned to overall group strategy.

Basic leader standard work was set up to ensure

these key meetings were adhered to.

Each site leadership team created its own set of

guiding principles that established the correct

behaviours to encourage a consistent OpEx

culture.

Each site appointed a site representative to drive

OpEx locally.

OMM. Initially, baseline audits were carried out at

each site to set out some foundational requirements to

start the OpEx journey. These included implementing

a local deployment plan, putting a CI resource in

place, governance setup locally, implement core

metrics (OEE, Product Waste), set a training plan,

pilot 5S, Visual Management and run a Kaizen event.

To support Make-It-Happen sustainability, each

OMM assessment included a compliance score to

accredit the site to Ornua Way levels: Standard Pass,

Plus or Platinum.

The 14 WaysSites were assessed and rated on their ability to meet fourteen operational excellence ‘ways’.

ToolsTo drive continuous improvement, Leading Edge

Group worked with Ornua to set up a central

database of best practice tools and resources for local

OpEx initiatives. Ornua set up a process for sharing

learnings of different tools and approaches across the

network, while initiatives such as ‘project of the year’,

site visits, and the monthly OpEx steering council

helped promote best practice.

Measure ImprovementsTo secure alignment and commitment to site strategy,

and to ensure everybody is working on the right

thing, business critical KPI boards were mounted at

central locations at each site.

Impact of the Ornua WayImplementing the Ornua Way helped some sites

progress to “managed reliance”, while all sites showed

a marked improvement since introduction. At more

advanced Ornua Way sites, the leadership team hold

each other to account and coach to the principles,

while all sites involve employees in problem solving,

daily stand up meetings and improvement teams.

Sites are now moving from Push to Flow production

with mechanisms to prevent overproduction. Supply

Chain departments are establishing a smooth-

flowing, end-to-end value stream, and Supply Chain

Leading Edge Quarterly - Spring 2018

What gets measured, gets done.

and Quality departments can better ensure quality at

source and Just In Time supply of packaging material.

ActionsThis paper shows how in a short period of time,

with the right structure and vision; and with senior

management support, a small OpEx team can create

change on a grand scale. The Ornua Way has had an

immediate impact and is recognized within Ornua as

the operations management system to support sales

growth past €3bn.

The real work and real improvement will occur once

teams can see the opportunity and have the autonomy

to make changes, supported fully by the leadership

team. It is vital that the Ornua Way integrates with

other functions of Ornua and becomes an Enterprise

Excellence initiative involving Supply Chain, IT,

Technical, Finance, Sales, etc.

Closing CommentsLeading Edge Group was engaged by Ornua OpEx

team to set up the Ornua Way, which is based on best

practice Operational Excellence. The combination

of proven Operations Excellence best practice and a

focused, driven Ornua team has resulted in significant

gains in the first year of the program i.e. €2m saving

(€4m annualized).

Support from senior leadership was key to this

project’s success, as were a clear strategic vision

and objectives aligned with business needs. A

culture change program like this requires key

headline projects to be achieved early on to establish

momentum. Finally, time should be taken at the start

to establish the framework, communication, and

support network to make it happen at this scale.

“capability and capacity has increased at the sites, whilst cost savings in the region of €2 million were realized in 2016”

If you would like to read the full version of this Ornua

White Paper, please get in touch with the Leading

Edge Group to request your copy.

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Tel: +353 (21) 4855863

Leading Edge Group leadingedgegroup.com

info@leadingedgegroup.com