Stars are aligned

Posted on 9 Sep 2010 by The Manufacturer

General manager Richard Lloyd tells Will Stirling how Europe’s largest wine bottling plant is preparing for 24/7 production and is targeting stellar output of 40 million cases of wine in 2011.

Next time you sip a glass of Banrock Station Cabinet Shiraz or an Echo Falls White Zinfandel, consider how that bottle got into your shopping bag. Since New World wines overtook French and European wines as the favourite tipple of the British public, the wine industry has known the importance of efficiently shipping product from the Californian hills and Australian vineyards to your dinner table.

Multinational group Constellation Wines Europe and Australia (CWEA) had been tracking the British love affair with this wine and in 2006 began designing Constellation Park, which at 885,000 sq ft is Europe’s biggest wine bottling facility. It didn’t hang about and saleable product was shipping from the giant warehouse by January 2009.

CWEA wanted to ship wine in bulk from its New World vineyards and bottle it in the UK, significantly reducing its operational costs. Packaging in country of sale provides CWEA with comparative advantage over several competitors who are still importing packaged wine. The Park uses two tank farms that can hold up to 4.6 million litres of wine. The tank farms feed two bottling and three ‘Bag in Box’ filling lines, which in turn pass finished goods into the adjacent 80,000 sq ft pallet warehouse.

“We produced 20 million bottles in the first year, 2009, and we are targeting 40 million in 2011,” says the facility’s newly promoted general manager Richard Lloyd. “This site was built with a 20 or more year horizon in mind, so we have capacity to build more bottling and bag in box lines to accommodate growth. This is essential with new customers coming on stream.” Finding growth doesn’t seem to be a problem. Unlike some UK manufacturing sectors, the wine sector has fared well through the recession and Constellation is a good exemplar. It has found there are advantages in being big.

While the company’s main business is branded wine and spirits, it also has recently been contracted by Sainsbury’s to bottle their own-label wines. “We’re attracting more own-label business because of the quality and scale of our operations,” says Lloyd. “It’s a development that we planned from a strategic perspective to ensure we have truly collaborative working relationships with the major multiples.” Big productivity plans call on Lean The facility was designed to be Lean from the outset. It now uses a principles-based policy deployment – Hoshin Kanri – to permeate the company’s lean strategy and vision throughout the organisation. This centres on the 5 Lean Principles: 1. Specify value in the eyes of the customer 2. Identify the value stream and eliminate waste and variation 3. Create value flow at the pull of the customer 4. Involve, align and empower the employees 5. Continuously improve in pursuit of perfection Constellation Park is confident about its ability to double output next year. “That’s not all from operational and efficiency gains. It’s about ramping-up to 24/7 production and having a new site that is sustainable, from a production and capability point of view, as well as an environmental one,” says Lloyd.

“We’re operating complex pieces of machinery here and the skill is in utilising your assets in sync with demand while balancing the staff shift system we’ve developed.” Mr Lloyd, a recent graduate of Cardiff University’s Lean Operations Management MSc course, is a staunch advocate of Lean manufacturing and he has been instrumental in designing and applying a Lean Operational Philosophy to the Avonmouth site. In some ways, Constellation Park is the perfect test bed for a lean exercise. It is less than two years old. The parent company is committed to a lean philosophy and has demonstrated its readiness to invest. A significant proportion of the 450-strong workforce are new recruits who were not employed within the old Constellation establishment, which had up to eight separate warehouse depots and one production site dotted around Bristol (“we wasted a lot of time moving product around”).

How is Lean actually operating on the ground? Constellation believes in focusing on its fourth Lean principle of ‘Involve, align and empower all employees’ before extensive activity and training is launched on the other principals. “Some people have begun by purely focusing on tools, thinking that tools are the basis of a Lean operational culture. It’s this crass implementation that has damaged the reputation of Lean and made it almost unfashionable,” says Lloyd. “If used in the right place, tools are excellent because they provide a common language and a standardised repeatable process. We have multiple shift patterns here, 450 people, operating 24/7 – I need to ensure that a consistent approach is properly deployed through the same structures, for example we’re changing over in the same way and that we’re approaching problem-solving in the same way throughout the site. The first tool we went with was 5S, purely to show how hard it is to get something sustained by over 450 people.” Lloyd feels that the simplicity of a tool is not the issue, and that getting all employees engaged with, owning and driving such tools is incredibly hard work.

“Actually doing it opens managers’ eyes to the reality that achieving ownership and continual improvement in a simple tool is far from straight forward. In certain areas of the site we are still grappling with it now.” Every area has its own 5S board, its own monthly performance audit, has an action plan fulfilled by line operators not managers, and the whole site management perform 5S walks every Thursday at 2pm. SIC – short interval control – boards are installed on each line, which shows the daily output by hour. The majority of shop floor meetings are held on the floor, “but there is a presentation room and two training meeting rooms to take the team’s offline,” he says. “Seventy to eighty per cent of shift managers’ communications, team meetings and departmental management meetings are held on the floor. Offline meeting rooms are used regularly to discuss financials, company targets and so on.” Lean, as everyone knows, is an ongoing process – Constellation Park is two years into its journey and has plenty to do, but Lloyd is confident that a successful Lean Operational culture can contribute is critical to the requirement to continually increase the output efficiency of the site.

Innovative annualised shift pattern
Companies tend to say that their people are their most important asset. Here, the evidence is compelling. Wine has very seasonal demand, with a big spike in the autumn leading up to Christmas.

Constellation Park has devised a shift system that flexes through the year in line with this seasonal demand. “The key objective is that the site capacity is matched to the demand placed on it; the secondary objective is to get the best work/life balance for our staff,” Lloyd says with conviction.

“Factory floor employees are on fully-roistered holidays for 12 months, but within that they’re getting 12 weeks’ holiday.

It’s a pretty easy sales pitch, and we have excellent staff retention. Whenever we advertise for line vacancies we are inundated.” The company is about to embark on a new round of recruitment, emphasising that business is brisk.

The shift pattern is getting industry-wide recognition from organisations like the Chartered Institute for Personnel and Development, and Richard will make a presentation about the demand/expectation for work life balance at the CIPD’s annual conference in November.

Minimum environmental impact The original concept behind building this huge facility was to minimise supply chain costs and the company’s carbon footprint. “It is demonstrably more cost and materials-effective to package wine and food in country of sale,” says Lloyd.

Processing wine at the lowest cost to the environment was formally recognised when CWAE won the Green Supply Chain Award 2010. All employees pass through an induction training platform and an understanding assessment to support the intent of meeting the company’s Safety, Health, Environment and Quality policy (SHEQ).

Far from being another set of tedious corporate paperwork, SHEQ has linked-up once disparate functions, such as removing weight from glass, label rationalisation and other brand-related initiatives. By linking these green goals with all departments – operations, sales and marketing, purchasing and finance – and back to manufacturing, the Park is monitoring its carbon footprint with more accuracy. “Through good collaborative relationships with key suppliers we’ve developed a 330 gram bottle compared to the industry norm of 500 grammes. This reduces cost, weight and carbon footprint. But the design is a fine balancing act as consumers have historically favoured a heavier bottle which they associate with quality.” In addition to SHEQ, the company has introduced further energy saving projects this year including the conversion of the old high bay lighting lamps to induction-style fittings and the reprocessing of waste water from the packaging lines. These form part of Constellation Park’s continuous improvement action plan. In addition, the business is committed to the Courtauld Commitment and CCA/CCL Legislation for reducing packaging volumes.

Improvement out of the box Currently, domestic demand for boxed wine is softer than in Australia and mainland Europe. But it’s an important part of Constellation’s UK portfolio, and the Park can process 110,000 bag in boxes a day (BIB). “The wine is kept fresher in a bag in box once you’ve opened it,” says Lloyd. “An important change is that we now make all the bags on-site.

Bag leakage has traditionally been an issue in the industry.

With us now controlling this part of the manufacture process we’re been able to get to the root cause of the leakage, making a step change in terms of quality going to market.” Constellation recently launched a more premium-looking BIB, called ‘Freshcase’, to try and break the stigma of BIB being associated with lower quality wine. “It’s taken off reasonably well in the UK, and done particularly well in Europe.” Richard Lloyd sums up the next step for this unique operation. “The future at Constellation Park is about developing all our people through the Lean Operational Philosophy to ensure we supply a product valued by the customer which is delivered on time, in full, every time.

Sustainable collaborative relationships are being built with the major supermarkets that are mutually beneficial. The scale and quality of Constellation Park would add value to any end-to-end supply chain, a value that all collaborators have been quick to recognise. Staying true to our fifth Lean principle we are striving to continuously improve, learn from our experiences and deliver ever more value to our customer.”