A world class story at Story Fresh

Recognised for its low-fat products in the vegetable processing sector, Story Fresh are also "Lean" when it comes to its processes. Having evolved over the past 30 years and specialised to meet market demand, Story Fresh scored in the world class category in QMI Solutions' Manufacturing Microscope benchmarking exercise.

Story Fresh is a relatively new name for a family farming business based in Cambooya (near Toowoomba) that has spanned 30 years and four generations. Turning over $9 million per year, and employing 130 staff, it is no longer a small affair.

"My grandfather and father grew a variety of vegetables here, and now that my son has finished university he has joined the business too," says Managing Director, Geoff Story. "In fact, he was our first connection with QMI Solutions, having encountered it as an engineering undergraduate."

In order to survive, the business has expanded to include processing facilities at Cambooya, a winter farm in the Lockyer Valley and the use of contract growers. Not the least of Story Fresh's achievements has been the development of effective supply chain partnerships that see its fragile produce reach market in top condition.

This fragile produce is primarily iceberg lettuce, trimmed, sliced and packaged for the Queensland fast food restaurants of Subway, KFC and Hungry Jacks, and many smaller outlets.

"Time is of the essence when getting a highly perishable fresh food to market,' says Story, "Our commitment is to cut, cool and process today so our product reaches the distribution centre (in Brisbane) tonight. This is what our distribution partners expect, and consistently meeting their expectations is what keeps us in business.

With such short lead times for daily deliveries, it is essential that the entire process, from harvesting through to trimming, cutting, washing, drying and packaging is streamlined with minimal bottlenecks and delays. Precision planning is needed to grow and source sufficient lettuces to meet demand fluctuations. Strict customer food safety audits must be met, including temperature control.

The processes Story Fresh developed and continually refined since they started value-adding in 1992 have needed to meet all these criteria. Although unfamiliar with the terminology, Story Fresh had employed the fundamentals of Lean Manufacturing, a business practice characterised by the endless pursuit of waste elimination. The goal of Lean Manufacturing is to mimimise the amount of manpower, materials, money, machines and space to get the job done on time and maximise value to the customer.

"We have implemented our own ideas as a result of years of experience, visiting other operators, listening to customers and submitting to customer audits for 10 years," says Story. "Even so, we were nervous about undertaking the Manufacturing Microscope. We weren't really sure how we would perform as our only external measurements were from customer audits, which are primarily food safety focused. This would be a more holistic benchmark across the manufacturing process."

The Manufacturing Microscope, part of the PROBE suite of diagnostic tools, compiles a report through asking cross-functional and multi-level teams to score results via a self-assessment questionnaire with the guidance of an independent facilitator. The finalised scores are calculated against a world class model of manufacturing excellence developed by the London Business School and the IBM Consulting Group, and benchmarked against a cross-section of international companies within the data set. Intended as a management summary, the Manufacturing Microscope report expands and reinforces findings from the facilitated discussion with the company.

"The six members of our senior management team were involved in the benchmarking in late 2007. Our flat structure means that everyone is very hands on. For example, our production manager spends 95% of her time on the factory floor, working closely with the operators. The only people sitting behind desks here are me and the receptionist," says Story.

Needless to say, Story Fresh was delighted with their results. Their overall practice index at 88%, lead performance at 82%, putting Story Fresh into the 'World Class' sector of the world class model. The six point practice lead over performance shows their investment in practice improvements may not yet have paid off totally in terms of a corresponding level of performance. This, however, is a normal condition of staged continuous improvement, with systematic practices put in place before real performance benefits are realised.

"We have always been committed to continuous improvement. Our score reflected our ongoing efforts and reinforced my belief that practice improvements really do lead to improvements in performance. It was good for the management team to hear this from an objective source. But best of all was the boost in morale we all got. We know we are on the right track and doing a good job," says Story.

When compared with other companies in the Food and Kindred Products sector, Story Fresh was twenty-four points above average in practices, and ten points above in performance.

Story believes several factors contributed to the operation's high score. "We record a wide range of information. A decade's worth of weekly, monthly and yearly customer ordering patterns helps us plan for future capacity requirements in plenty of time, without affecting day to day operations. Every day we expect to meet every order," says Story.

The site successfully meets more than 95% of its daily customer delivery requirements, placing it well above the sector average.

Various other records kept include:

• kilograms of lettuce trimmed by one operator per hour
• kilograms of lettuce packed by one operator per hour
• recovery ratio of lettuces brought in from harvest
• defect rate
• customer complaints.

From these records Story Fresh continuously identifies areas for improvement, whether they be equipment or procedural based.

The close relationships developed with six main distributors helps enormously. Forward integration goes right to consumer level. "The large restaurant chains feed back customer complaints, some more formally than other. One group in particular has an electronic customer comments tracking system. This information is essential in our quest to better meet our customers' needs," says Story.

The site's commitment to quality is evidenced by the fact that far less than 0.01% of units fail to meet customer specifications.

Specialising on a single product, shredded lettuce, has enabled the business to really focus on getting that process right and investing in specialised equipment.  "Years ago we did cauliflower and broccoli retail packs for a major supermarket, but have had much better results from specialising," says Story.

The on-site audits carried out by Story Fresh's multinational customers have been a great catalyst for improvement. Although they do have a food safety focus, they also include elements of recording, customer complaint procedures, on-time-delivery and some other process evaluations.

"What really surprised us was the overlap between what our customers judge us on and QMI Solutions' benchmarking criteria. I guess our customers have a vested interest in knowing that we'll be around for the long haul," says Story. 

As strong as Story Fresh's results were, they still identified some areas for improvement, in particular:

• the capacity of the weighing and packing area outstripped that of the washing and drying area, creating a bottleneck
• wasteful processes reduced the product recovery ratio
• a temporary storage area had evolved between the trimming and slicing areas
• down time was caused by equipment breakdowns or part replacements.

Story Fresh addressed the last point by introducing a preventative maintenance program. By recording when component parts are fitted in equipment, along with the parts' expected lifecycle, operators can now schedule in component replacements at a convenient time, rather than when the part fails. Specific operators are allocated responsibility for specific machines.

"We aim for a 100% continuous flow in our processes. The Manufacturing Microscope highlighted that to achieve this, we need to plan to eliminate bottlenecks. So six months after the benchmarking we undertook the Factory Optimisation project," says Story.

The Factory Optimisation project recommended layout improvements to eliminate the temporary storage area, and suggested investing in specialised equipment. A larger spin dryer will address the capacity inequity between the washing and drying area, and weighing and packing area. Wider conveyer belts will reduce waste, which was being caused by product falling over the edges.

"We will have process modifications and the new equipment online by early next year," says Story.

In the meantime, results are stacking up. In a major customer on-site audit conducted five months after the Manufacturing Microscope, Story Fresh scored 100%.

"We are keen to repeat the Microscope after 12 months to track our progress. Now that we have set the bar so high, the management team is determined to ensure we retain and improve upon our world class status," says Story.

Asked of other future plans with QMI Solutions and Geoff Story says "We have got enough to be going on with right now, but we will definitely use them in the future. Both the benchmarking and the Factory Optimisation project were practical and suited our circumstances."

For more information or advice, please contact:
Consultant: Gary Christian
Email: info@qmisolutions.com.au