Cat that got the cream

By Rod Addy

- Last updated on GMT

Related tags Cottage cheese Supply chain Milk Supply chain management

With plans to ratchet up production and the development of its flavoured milk, cottage cheese and Cravendale interests, there’s a lot going on at Arla’s Stourton dairy, as site operations director Steve McAuley reveals.

We run for 365 days of the year. At Easter there's a slight uplift in alcoholic creams and our peak is between October and the beginning of December. Then we switch to fresh cream and milk for Christmas. Once Christmas is out of the way we go straight into cottage cheese manufacturing.

When we had the snow this year some of our competition struggled, but we got every product to every store every day. We didn't miss a delivery window. Out of every product, milk has got to be there.

The first spade was thrust into the ground for Stourton in 2003. We started off solely processing own-label, pasteurised milk.

Last year we processed 380M litres of pasteurised milk. We have doubled the size of our Cravendale brand in the past five years and processed more than 90M litres in 2010.

Our vision is to be the number one dairy company in the UK and we're constantly looking for new markets and opportunities, such as cottage cheese, which is a completely new platform for us in this country. It will bring some opportunities and some complexity as well. We accelerated our schedule as a result of the announcement in January that Uniq was going to pull out of cottage cheese.

Stourton is one of the key sites for kicking off pilot projects. We are just starting up with flavoured milk production. We are also looking at building more capacity across the site to increase our retail presence. We will run an innovation programme and develop a lot of great ideas from what we have learned.

Our three-year plan is focused on consolidating what we have and trying to increase our throughput. Last year was about getting the equipment in and now it's time to take stock.

In 2010 we took 72 people to develop a site strategy for Stourton. They came up with targets and enablers, looking up stream and down stream of their role.

We have production line facilitators on site and we're going through units where our guys have taken a problem and come up with the best way of tackling it. We implemented a fantastic solution in January and we will get benefits of £100,000 a year out of that. We have students in Denmark that want to come over here as well to learn and share ideas.

We have a team optimising throughput and another cutting waste. We thought there was no way they could achieve their targets, but they have delivered them. We have four cell teams and each has a project.

We have a line maintenance and development programme that we're rolling out using our production teams. I believe in empowering teams. They are the ones who know the job more than I do. Our line programme is driven by reducing cost and developing our people.

Integral to our line maintenance philosophy is total asset care. I did my Masters on it. The principles are great, although if you stick too rigidly to them you are going to fail.

We started the pilot lean production programme for the UK group at the beginning of last year. Stourton and the adjacent national distribution centre (NDC) were chosen as one of the pilot sites.

Build phase one for this site, a £55M investment, started in March 2003 and went live in September 2004. We installed four filling lines that can fill up to 20,700 bottles an hour, which has moved the benchmark for the industry on significantly, including what we believe could be the world's largest filler. It is 4.3m wide and can fill 250 four pint bottles or 150 six pint bottles a minute.

We have Tetra Pak packaging and bottle blowing on site and we're expanding our blow moulding capability.

We finished installing a unique automated Autefa system for storage in September 2004. We build and draw on stock, using robots.

Phase two of development a £25M investment in Cravendale milk processing started after that and involved the installation of two more lines. We now also have 'Cravendale with a hint of ...' flavoured milks in a one shot, grab and go format.

The final fresh milk expansion programme started in 2008 with the further injection of £12M, which included the installation of another Krones filler. At the same time, internal lean manufacturing activities increased overall processing capacity to close to 450M litres a year.

In 2009, we built a £2.5M Innovations Centre, which included a pilot plant and product development laboratory. We began phase three the following year with a further £70M investment, which allowed us to get into creams. That's when we installed our six AmPak fillers, the fastest of which can fill 36,000 pots an hour. During the Christmas period, we need that.

We also put X-ray machines and automatic packing and stacking in then, as well as a rapid cooling tunnel, which ensures we can cool everything down to less than 5°C. And we installed automated line management, warehouse management and APO advanced planning and optimiser tools.

Everything was fitted into a modular design, so there was minimum impact as we went through the stages. We now have in-house cap manufacturing, so all our caps for fresh milk are injection-moulded on site.

We have nine 250,000 litre silos for use on fresh milk and six bays for milk intake. We run like a railway timetable. We take in more than one million litres of milk every single day. With that sort of volume you have to make sure every delivery comes in on schedule.

We can hold 10,000 bottles at peak storage at the on-site NDC in our tetratainers, roll cages that can hold 80 four pint bottles each.

We can view production line statistics day and night from the office or remotely. We use SAP software as a major part of our business for maintenance scheduling, spare part stock control and ordering.

Increased product traceability has allowed us to trace ingredients far more quickly back to the farm. Arla UK buys more than 90% of its milk from Arla Foods Milk Partnership, which is composed of 1,400 farmer members.

We changed the whole structure of our supply chain management last year. It is now divided into three: one person is in charge of the north, one is in charge of our southern operations and we have a vice-president of supply chain operations. This has given us a more integrated approach to sourcing and distribution.

One of the biggest areas of improvement is in how we balance commercial and supply chain functions. We have just held a supply chain conference, cascading information across all our employees. Everybody got the same message. We hold an annual barometer survey on our supply chain strategy and work on action plans throughout the year with the aim of improving our score.

We use high-efficiency motors on all our equipment, reverse osmosis water treatment and we're looking at biogas boilers.

We have encompassed farmers within our environmental remit, with an on-farm support package, which we're rolling out in the next few months, including a free environmental audit. Asda, Tesco and others will through us have a relationship with farmers.

We are now working on lighter and more robust bottles, but the ultimate aim is to move towards a polybag. The Platts index shows plastics prices are way up. We currently use recycled high density polyethylene in our packaging. We would use more if there was more on the market and we will aim to increase our use of it. We also have our own internal recycling systems.

We are also relamping, looking at using more energy efficient lighting tubes. Our corridors already operate on sensors, so that the lighting only switches on when someone is walking through them. FM

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