Need for Kaizen in FMCG

By Tuesday, October 18, 2016 0 No tags Permalink 0

Applicability of Kaizen is believed to be universal as there is ample scope for improvement in any system, when explored and addressed in a suitable manner. The need for Kaizen in the Fast Moving Consumer Goods (FMCG) Industry can be better appreciated if companies in this sector realize that they are in fact plagued by burden of waste identical to that present in the Automotive Industry. Given the fact that this business philosophy has paid off quite handsomely for Toyota and other automobile manufacturers to cut waste and improve efficiency, the result cannot be any different in FMCG.

That said let’s look at some of the common problems that FMCG companies are faced with.

Before we start, it is important to note that these problems basically stem from complex operations characteristic of this Industry, including but not limited to:

  • Large scale production
  • Multitude of product categories and variants
  • Vast distribution network

Manufacturing and warehousing facilities of FMCG companies thus often battle with

  • Fluctuating Workloads
  • Excess Inventory
  • Over Production
  • Stock Outs
  • Returns / Rejections

Most cases production is not against orders, but rather in response to the projected end user or consumer demand. Also considerable time and effort is spent on setting up the production system as well as making necessary changes every time a different product variant needs to be produced. Batch sizes usually are large to offset the set-up and changeover times, and hence it all the more imperative to ensure quality and sufficient processing to prevent rejections.

Hiring the services of an experienced Kaizen Consultant can help identify costly loop holes in the existing processes and practices, and get them fixed by using suitable tools and techniques.


How Kaizen Implementation Can Benefit FMCG?

We are aware that Kaizen strives to improve quality and minimize waste to improve process efficiencies.

  • In the case of FMCG, it can enhance visibility of the supply chain, inventory, manufacturing, and distribution functions, apart improving the flexibility of the system to cut response time in case of changeovers.
  • Overproduction is the main culprit as it is resource intensive (time, labour, machinery and raw materials) apart from resulting in excess stock which is expensive to store for indefinite periods of time. Use of production levelling tools such as Quick Changeover can help balance batch loads to optimize capacity, streamline workloads and maintain a healthy stock balance of diversified product offerings.
  • Process improvements are usually achieved by employing value stream mapping techniques; Analyzing the value of a product from the consumer’s perspective and scaling up to meet expectations automatically ensures processes are aligned towards core objectives of the firm.
  • TPM, TQM, and visualization tools such as Poka Yoke can work together to boost productivity across the firm, enhance quality of offerings and curb rejections as well as minimize system failures, increasing the operational efficiency of the company.

Kaizen principles are best implemented in close consultation with qualified and experienced professionals adept in Lean Consulting, to derive maximum benefits. Signup for Kaizen implementation with reputed consulting firms can help tap on the combined industry experience such firms have in store.

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