EY: Alliance with P&G role model for operational excellence
A successful alliance between Ernst & Young (EY) and Procter & Gamble (P&G) that ‘achieves operational excellence in manufacturing’ is now used in 400 smart factories resulting in savings of $15b.
The 10-year partnership between consultants EY and household product brand P&G - best known for Pampers, Gillette and Ariel - focuses on improving the end-to-end supply chain with an Integrated Work System (IWS). This smart factory model is now helping other global manufacturers and SMEs grow and optimise their business.
“We've taken an industry leader in performance, coupled it with an industry leader in operations consulting and transformation and together we're offering organisations the ability to extend what they're currently doing and deliver transformational results,” said Craig Lyjak, EY Global Smart Factory Leader.
“It's great that we can go into a site and have significant capacity improvement in a very short period of time,” added Lyjak, who pointed out EY has now renewed the contract with P&G for another decade, which will allow them to offer even more “capability to our collective clients”.
“Our vision with the P&G relationship is that we’re offering an end-to-end capability that enables our clients to not just have the manufacturing performance improvement, but to be able to leverage that and to advance the corporate strategy in the total supply chain,” he said.
What is IWS?
P&G’s IWS empowers every employee through a vertical line-centric model that establishes clear ownership and accountability. This method of lean manufacturing aims to eliminate loss and waste. This disruptive way of working is predicted on two principles:
- A drive to zero losses
- 100 per cent employee ownership
“This is a big differentiator as it engages people on the shop floor in a way that is consistent, repeatable and delivers the business performance,” said Lyjak.
What is a smart factory?
This is an environment in which cyber-physical systems monitor the physical processes of the factory, provide analysis, and automate or support controls and decision-making to improve manufacturing efficiency and effectiveness.
By boosting overall equipment effectiveness (OEE), the smart factory can help manufacturers increase revenue and defer capital investment. It can also improve workforce productivity and morale and reduce operational costs.
“OEE and yield are the two primary business case drivers from a manufacturing performance perspective that we see in the short term. But once you have that performance uplift, how can you sustain it?
Uplift in performance
“When you combine IWS and the EY Smart Factory solution - with emerging technologies to provide a digital experience - this can accelerate and sustain performance,” said Lyjak, highlighting this as the way forward for businesses looking for a “quick win”.
“Gone are the days of people embarking on a transformation and wait quarters, or even years, to see uplift. We need to be able to have quick wins but in a sustainable way. From a timeline perspective there is generally a performance change in about eight to 12 weeks and within that four to six month time horizon, you will have broad acceptance that it's not just a blip but will continue.”
Lyjak pointed out that it is not about just solving one problem but taking it step-by-step to solve the next and continue that uplift and not regress. “That's when it really starts to feel different.”
Lyjak said these new systems of working can only be adopted if businesses are prepared to change behaviours - as it’s not just about the tools. “There is a comprehensive engagement period which results in the start of a culture change. It's how we leverage the tools to embed behaviours and practices.”
People power during the pandemic
During the pandemic, line operators were entrusted more than ever to make the right decisions. They rose to the challenge, and the policy worked.
“The true value of IWS is that numerous P&G factories not only managed to exceed their pre-COVID-19 performance and deliver record reliability, but also identified opportunities to further improve processes,” said Lyjak.
Four CPG giants to fund sustainable accelerator programme
Breakthrough ideas can come from anywhere and anyone. That’s the premise behind the coming together of The Coca-Cola Company, Unilever and Colgate-Palmolive in the funding and support of world-leading brewer AB InBev’s 100+ Accelerator program.
These four consumer packaged goods multinationals will leverage both their size and resources to fast-track a shift toward sustainable solutions by mobilising some of the world’s sharpest thinkers to solve some of the world’s most pressing sustainability challenges.
The aim of this collaboration is to “supercharge adoption of sustainable solutions by funding the accelerating fantastic innovations that will change the world by making all of our businesses more sustainable”, says Tony Milkin, chief procurement, sustainability and circular ventures officer at AB InBev.
“Sustainable business is smart business, and we are working to solve huge problems that no one company can handle alone. With our combined global reach, we can accelerate progress towards a more sustainable future.”
What is the 100+ Accelerator program?
Originally launched in 2018, 100+ Accelerator is a global incubator program that aims to solve key supply chain challenges across water stewardship, circular economy, sustainable agriculture and climate action.
It offers size and scale to passionate entrepreneurs to help bring their solutions to market faster, and the program’s first two cohorts have already piloted 36 innovations in 16 countries, with participating startups raising more than US$200m to help them scale globally.
Among the established innovators are those already creating huge impact on sustainability, with projects including the first solar thermal plant in Africa, recycled electric vehicle batteries that store renewable electricity in China, and upcycling saved grains from the brewing process to produce nutritious foods in the US.
- The implementation of green cleaning solutions to reduce water and energy use in brewing operations in Colombia
- Solutions delivering traceability and insurance for smallholder farmers in Africa and South America
- The collection of more than 1,000 tons of glass waste in Brazil
- Piloting returnable packaging in the United States
- Recycled electric vehicle batteries that store renewable electricity in China
- The ability to upcycle saved grains from the brewing process to produce nutritious foods in the United States
- The first solar thermal system to be installed at an AB InBev plant
How will the new program work?
So, how does it work? Applications are invited from entrepreneurs or small businesses (deadline for cohort 3 is May 31 2021) and the partners will choose 20-25 ideas which are then provided with funding.
Project aligned with goals of the CPG multinationals
The participation by all three consumer packaged goods giants is in line with each of their own sustainability goals, with each passionate about transforming global supply chains towards a greener future, and knowledgeable that “we can achieve our purpose faster and more effectively with equally committed partners”, says Patricia Verduin, CTO of Colgate.
Since launching its World Without Waste sustainable packaging platform, Coca-Cola has actively engaged the startup community for inspiration and innovation and is an inaugural investor in Circulate Capital, a fund launched in 2019 focused on ventures, infrastructure and innovations preventing the flow of plastic into oceans.
The program’s social inequality component is also aligned with Unilever’s values. “This year, we made commitments to ensure that everyone who directly provides us with goods and services receives a living wage by 2030,” says Marc Engel, chief supply chain officer of Unilever. But that’s not all. “We’re increasing our spend with suppliers from underrepresented groups and committed to train 10 million young people.”