Getting better all the time

By Dieter Bergner, Huhtamaki

Dieter Bergner explains why continuous improvement is key to business success

“Continuous improvement projects have helped us not to loose track of our daily business.”
-Dieter Bergner, Huhtamaki

What has happened since Huhtamaki announced its European Consumer Goods business to be under strategic review at the end of 2008?

Dieter Bergner. After the decision, our management team identified certain important objectives in order to stabilise the consumer goods business during the complicated operational and administrative carve-out from the other businesses. We committed to a common understanding that our business would not suffer from the separation process.

After 15 months, the Rigid Consumer Goods Plastic business in Europe is operationally and legally separated from the parent. Now employees and management are keen to understand what the common future will look like.

What role did continuous improvement projects play during this period?

DB. It was essential to focus our workforce not only on carve-out activities, but to build the future management teams and assert ourselves as a new and robust packaging company. Continuous improvement projects have helped us not to loose track of our daily business. A strong focus on cash flow management and manufacturing performance, and its constant improvement, has helped to create a very positive team spirit and this positive momentum has meant that our business has achieved good financial and operational results.

There has been improvement in quality and supply performance, while inventories have been reduced significantly. These actions have definitely boosted business, even making us an industry benchmark in some areas, while preparing our business for a new future. Today, Consumer Goods Europe is running with 40 percent of its 2007 operating working capital, an outcome of continuous improvement throughout all management layers.

How has continuous improvement in Consumer Goods Europe developed since the beginning?

DB. Our continuous improvement process has developed year on year. Like many others, it was a top down approach when we started measuring operational performance in 2005. The programme focused on line and labour efficiency as well as on waste reduction and recovery by technology, and the manufacturing process. At the same time, we announced safety, quality and supply performance to be our top objectives and started to benchmark key performance indicators (KPIs) between our units.

We made a thorough job, gradually implementing measurement and reporting tools so that we were able to speak to everyone, from management to operators, about actual achievements and future targets. Since then weekly business reviews and activity based efficiency reports go alongside our target setting for operational improvements. A handful of performance incentives, broken down local levels, do the rest.

Today, improvements are outlined by middle and lower management into small portions of achievable targets for our local workforce. This has helped us to continue our improvement at a time when all the manager's efforts were dominated by the carve out process.

Which achievements do you want to highlight especially?

DB. All financial and operational KPIs have developed to the point that our performance in certain areas has become a benchmark to the industry. An example is employee safety, an area that has improved drastically: we have reduced the LTIF (lost time incident frequency) by 400 percent. And, as mentioned before, we have more than halved our working capital while notably improving our supply performance at the same time.

What are the future targets to be achieved by continuous improvement?

DB. Continuous improvement is the capability of an organisation to handle interdisciplinary projects in a cost and time efficient way. Many of our processes are disciplined to continuously improve our performance towards the customer, for example through new product development, integrated supply chains or simply by achieving high reliability in what we are doing.

Our strategy is to provide our customers with the highest level of performance, in terms of new product development as well as product quality and service, thereby providing added value to their business and help them to develop their market share.

We will continue to translate market requirements into internal KPIs in order to integrate as many of our employees into this value chain as possible. Continuous Improvement will play a major role in building our future company profile.

Biography

Dieter Bergner started his consumer food packaging career in metal packaging with Crown Cork & Seal and Impress Metal Packaging. With some 11 years experience behind him he joined Huhtamaki as Operations President for Rigid Packaging Europe, where he worked for four years before taking over Consumer Goods Europe as Managing Director.