Premier attacks operational costs

By Rick Pendrous

- Last updated on GMT

Related tags: Better

Premier attacks operational costs
Britain's biggest food manufacturer, Premier Foods, has come under a lot of flak recently for the problems with its leadership, direction and strategy.

But at the 'coal face' it is clearly undergoing a complete transformation of its manufacturing operations to bring them up to world-class standards.

If the 'Premier Attack' programme of continuous improvement (CI) is successful, as early signs indicate, it will help to generate the cash needed for investment in the firm's 'drive brand' portfolio of products, under its new chief Michael Clarke.

Speaking at a manufacturing forum in Manchester last month organised by maintenance, repair and operations specialist Brammer, Premier's group manufacturing excellence manager Graham Paterson described the remarkable journey the company began about two years ago. Over the past 12 months alone, operational costs have been reduced by £41M and the company is on target to achieve £135M by 2015, reported Paterson.

"It really is about collaboration," ​said Paterson, who stressed the criticality of getting all involved in a CI programme to buy in if it is to work a "bottom up"​ strategy. "It's about the journey rather than the destination,"​ he argued. If it works, it will achieve the outcomes that are sought: everything from reduced accident rates to greater efficiencies; reduced manufacturing costs to improved quality and consistency of products.

But, it's not about compulsion, he stressed. You can't beat workers about the head: they've got to understand the benefits of doing things better for themselves and welcome the change voluntarily. Key to the process working is a simplicity of vision, he added. "It's all about engagement and execution," ​said Paterson. "Change is an emotional thing; it's a personal thing."

For a firm as large, diverse and complex as Premier with 16,000 employees across around 60 sites cultural change is no mean feat. And it isn't about imposing uniformity across the group either, said Paterson. Each site has its own focused improvement plans, which is essential where businesses needs vary so radically: from 24/7 bakery operations to ambient businesses where stock can be held.

To date, the results have been very impressive, but the potential to do even better is compelling. "In Premier there are big numbers to go at, to drive real benefits,"​ said Paterson. Across the group thus far, there has been a 71% reduction in reportable accidents, a 37% improvement in equipment utilisation and an 18% increase in overall equipment effectiveness; a 8.5% reduction in inventory held over the past 12 months worth £14M and a 13% reduction in energy consumption worth £7M. It comes from thousands and thousands of individual improvement projects, which can generate savings from as much as £500,000 a year to just £20 a week, but are equally valued.

"The thing I'm most proud of is the fact that it is designed and run by our shopfloor and onsite teams," ​said Paterson. "We want to have one team and one agenda looking at one set of losses."

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