Kinshasa, République Démocratique du Congo
Opportunity Maintenance
At one of Bralima’s packaging lines
‘A maintenance system that will cancel itself’
Master Thesis Michiel Oosterwechel
August 2009
Opportunity Maintenance
At one of Bralima’s packaging lines
‘A maintenance system that will cancel itself’
Author
M.T.A.G. Oosterwechel Student number: 1335979
Email: michieloosterwechel@hotmail.com Noorderstationsstraat 16
9717 KN Groningen The Netherlands
Heineken International / Bralima S.A.R.L.
Supervisor: R. Rijsenbrij Brewery Manager
Email: remco_rijsenbrij@heineken.com 1, Avenue du Drapeau
BP 7246 Kinshasa (Gombe/ Barumbu) Democratic Republic of Congo
University of Groningen – Faculty of Business Administration Master: Operations & Supply Chains
Supervisor: Dr. Ir. S. Brinkman Email: S.Brinkman@rug.nl Co-assessor: Dr. N.D. van Foreest Email: n.d.van.foreest@rug.nl Nettelbosje 2
9747 AE Groningen The Netherlands August 31, 2009
The author is responsible for the contents of this master thesis. The copyright of this master thesis is held by the author.
Preface
This report concludes the final part of the master Operations & Supply Chains at the University of Groningen. I have had the privilege to do this research at one of Heineken’s operating companies, Bralima S.A.R.L. in Kinshasa, the capital of the Democratic Republic of Congo. The research is done to improve the performance of one of Bralima’s packaging lines through doing opportunity maintenance.
I have worked and studied at the brewery for almost six unforgettable months of which I can write a whole book. Doing research in a country that differs in so many ways from everything I was used to, is a real eye-opener and makes me put things in The Netherlands in a better perspective now. It has been a real challenge to work together with the Congolese employees that have an entirely different frame of reference than me, to relate scientific theories to the practical requirements of the brewery in its context, and not to mention the experience of entering a foreign country in the middle of the night without being able to express yourself in the French language!
This research would have been impossible without everyone I have worked with and gave me my impression of the brewery and Congo. I would like to use this preface to thank them again. First of all, I want to thank all employees from the packaging and maintenance department and the staff of the Brewery Manager that have helped me during my research and also for all interesting conversations that were not work related. Second, I want to thank the General Director, Hans van Mameren and the Brewery Manager, Remco Rijsenbrij for the opportunity they gave me for coming to Congo to do my internship. Next to that, I want to thank Remco Rijsenbrij for supervising my research at the brewery during the six months, his valuable advices and of course for all evenings of doing ‘De Kolonisten van Catan’. Third, I would like to thank my fellow interns and roommates Jan van der Vorm, Tim Wolbrink and Folkert Praamstra for exploring Congo whether it was at the brewery, during evenings or at the weekends! Fourth, I want to thank Bas Brinkman, my supervisor from the University of Groningen for his patience and useful feedback. Finally, I want to thank Mr. van Foreest, my co-assessor from the University for assessing the thesis.
I hope you will enjoy reading this master thesis.
Michiel Oosterwechel Groningen, August 31, 2009
Management summary
This master thesis describes the research that is done at the main site of Bralima S.A.R.L. that is one of Heineken N.V.’s operating companies and located in the capital of the Democratic Republic of Congo. The situation to operate a brewery in this country deviates enormous from doing this in a western country. The combination of cooperating with employees that have an entirely different frame of reference and level of education, the pressure to squeeze each hectoliter out of the packaging lines that pulls out all the stops and thereby seeking the limits on doing maintenance trying to keep up with the market demand that is increasing enormous for consecutive years makes it an interesting setting for doing this research.
The packaging lines are the bottleneck of the brewery. Despite all three packaging lines kept producing 24 hours per day and seven days per week during all 52 weeks of the year, the stock levels of Bralima’s SKU’s were less than a few days of sale and there were real difficulties to keep up with the continuing rise of the market demand during 2008. The focus of this research is on packaging line 3. In the initial situation, performance losses caused by breakdowns and planned maintenance periods at this packaging line were high and the packaging line continuous production with many defects that can result in more breakdowns.
Due to the height of the market demand, there was not enough time to do all preventive maintenance tasks like solving all defects during planned maintenance periods. For not running out of stock and to meet market demand, the performance of the packaging line had to increase by reducing losses in a sustainable way. The main research question that has to be answered is:
‘How can losses by planned maintenance be minimized without resulting in an excessive increase of losses by breakdowns?’
The research objective is:
‘To develop a system for doing opportunity maintenance and inspections during production to reduce losses by planned maintenance, while losses by breakdowns should not increase too much’1.
This research is done by using the DOV model that consists of three phases: diagnosis, design and change. The diagnosis phase is divided into two parts. The first part, the problem determining diagnosis, results in a clear description of the current functioning of packaging line 3. It is described how preventive and corrective maintenance are currently done during respectively planned maintenance periods and breakdowns. Next to that, indicators that measure losses by planned maintenance and breakdowns are used to describe the current situation. During this part of the diagnosis seven improvement areas and problems at the current situation have been determined. The second part, the problem explanatory diagnosis, aims to find out the possible causes for the current performance2. The causes for the seven improvement areas and problems have been explained.
The design and change phases partly overlap. The combination of the experiences of the researcher gained at the work floor during two months of coordinating two TPM teams, the
1This research objective is adjusted during the design phase to extend the applicability of the new maintenance system
2A.J.C. de Leeuw, Bedrijfskundig Management, 2000
theoretical framework that is formulated by using scientific literature and documents of Heineken on maintenance concepts, the diagnosis phase and the limiting conditions are input for the design and change phases. Lewin’s change model (unfreezing, moving and refreezing) is used to modify the behavior of the employees that want to keep the status quo into behavior to reach and keep the desired situation3. So the newly designed maintenance system is already implemented.
Conclusions
The focus has to be on doing preventive maintenance. Just decreasing time spent at preventive maintenance during planned maintenance periods leads to short term gains of production time that eventually leads to breakdown losses that surpasses the time saved. Next to that, doing the same maintenance action preventive instead of corrective results in less losses of production time and it will prevent unplanned production stoppages through breakdowns and improves the reliability.
Since the packaging line has to run continuously, production is interrupted for doing preventive maintenance during the planned maintenance periods. It is preferred to do preventive maintenance without interrupting production to prevent losses of production time which is outlined at the research objective. By developing a system for doing preventive maintenance during opportune moments (opportunity maintenance) and inspections during production, no production time is lost because production is not interrupted. Opportunity moments are caused by interruptions of production through breakdowns, external and general stops.
The following three points explain how losses by planned maintenance periods (for doing preventive maintenance) and breakdowns (for doing corrective maintenance) are minimized by using the newly designed maintenance system together with the planned maintenance periods:
- Through doing opportunity maintenance and inspections during production next to the planned maintenance periods, the initial situation where there is a stack of work orders for preventive maintenance that cannot all be done during the planned maintenance periods will eventually disappear. The combination of using these additional moments that do not interrupt production together with the planned maintenance periods, the pile of work orders will decrease and will eventually make sure that time spent at the planned maintenance periods can be decreased too
- By being able to work through the stack of work orders, the defects with which the packaging line ran in the initial situation will be solved too. Since these defects could have resulted into breakdowns, it is likely that the amount of breakdowns will decrease.
This results in less production time lost by breakdowns
- Depending on the height of external and general stops, the combination of doing preventive maintenance during production, opportune moments and planned maintenance periods should lead to the situation that the reliability of the packaging line increases enormously and unplanned production stoppages through breakdowns will reduce and become very low. Because in the initial situation the largest part of opportunity time is caused by breakdowns, in the future, the new maintenance system should cancel itself mainly due to the future low amount of opportune time.
The velocity of reducing losses by planned maintenance periods and breakdowns depends on the combination of the amount of opportunity time, the use of opportunity time to do
3T.G. Cummings and C.G. Worley, Organization development and change, 2005
opportunity maintenance, the amount of inspections that will be done during production and the amount of time spent to do preventive maintenance during the planned maintenance periods.
Due to its simplicity the newly designed and implemented maintenance system can easily be expanded to other areas of the brewery and outside of the hours it is currently used as stated at the limiting conditions. Next to that, it can be easily copied and applied to other organizations throughout the world without the necessity of doing fundamental changes. The system is certainly not restricted to the brewery in Kinshasa.
For Bralima the biggest challenges for making the new maintenance system run well are:
- Changing the current sense of time of employees for using available opportunity time efficient; reduce wasting time
- Fading the borders between different sections of the packaging and maintenance department
- The employees that have to determine which work orders will be done at opportune moments have to become a team that is quickly on the spot and they have to act more as chefs that delegate and keep track of work orders performed by maintenance personnel.
Through implementing the additional maintenance system, the autonomy of all employees involved is increased. The differences between the Congolese culture and the western culture should be kept in mind; it will take time to change the current behaviors, attitudes and values for running the new maintenance system in the direction of western standards and before the new way of working is really ingrained.
Recommendations to Bralima
Three recommendations to Bralima are formulated:
- Work orders that have to be done with the new maintenance system are not prioritized while specific work orders are more urgent than others. Currently, these work orders could be missed out while other work orders with lower priorities are executed before them. This could be studied further
- The time spent at planned maintenance periods should not immediately be reduced, because of doing also work orders for preventive maintenance with the new maintenance system. The stack of work orders for preventive maintenance that could not be done in the initial situation due to a lack of time has to disappear first. Time spent at planned maintenance periods should be reduced when this pile of work orders does not exist anymore
- Over a longer time period, it appears that the average results on one of the performance indicators are a lot higher than the target. An increased target that is closer to this higher average will be more challenging.
Table of contents
Preface ... 3
Management summary ... 4
Table of contents ... 7
1 Introduction ... 8
1.1 Introduction Democratic Republic of Congo ... 8
1.2 Heineken N.V. and Bralima S.A.R.L. ... 12
1.3 Conclusions ... 17
2 Packaging lines and maintenance department... 18
2.1 Introduction ... 18
2.2 Packaging lines... 18
2.3 Responsibilities of the maintenance department ... 23
2.4 Conclusions ... 26
3 Research approach... 27
3.1 Initial motive ... 27
3.2 Problem statement ... 28
3.3 Research methodology ... 29
3.4 Value of the research ... 30
4 Theoretical framework ... 32
4.1 Introduction ... 32
4.2 Maintenance ... 32
4.3 Conclusions ... 38
5 Diagnoses ... 40
5.1 Introduction ... 40
5.2 Problem determining ... 41
5.3 Problem explanation... 53
6 Design and change ... 58
6.1 Introduction ... 58
6.2 Design and change ... 59
6.3 Conclusions ... 75
Conclusions and recommendations ... 77
Conclusions ... 77
Recommendations to Bralima ... 79
List of references ... 80
Appendices ... 82
1. Description of the packaging process... 82
2. Coordinating two TPM teams ... 85
3. Indicateurs de performance ... 91
4. Extended description of using Lewin’s change model... 93
5. Procédure entretien pendant arrêts non-planifiés et production... 102
1 Introduction
The research is done at one of Heineken N.V.’s operating companies, Bralima S.A.R.L., in the capital of the Democratic Republic of Congo. Before introducing Heineken N.V. and especially Bralima S.A.R.L. (paragraph 1.2), an introduction of the Democratic Republic of Congo is presented for understanding the difficult living conditions of the population, and therefore Bralima’s employees (paragraph 1.1). This chapter ends with short conclusions at paragraph 1.3.
1.1 Introduction Democratic Republic of Congo
As the circumstances at the Democratic Republic of Congo deviate enormous from the known situation in the western world it is necessary to provide relevant background information on the country, which is done at this paragraph. Five subjects are presented: the country’s nature
& environment, culture, society, history & politics and economy. The Democratic Republic of Congo is located below the centre of Africa and is colored yellow at Figure 1.1.
Figure 1.14
1. Nature & environment
The Democratic Republic of Congo is an enormous country with a surface of over 2.3 million km2and an estimated population of over 68 million5. It is the largest country of Africa after Algeria and Sudan. Only Nigeria has more residents. After the Nile, the Congo River is the largest river of Africa with its 4.700 km. The Congo River has a dozen broad and innumerable smaller tributaries and streams. The parts that are navigable are important for transport, because almost all infrastructures on the mainland are changed into rubble. The country has one of the largest uninterrupted tropical rainforests of the world. The tropical rainforest covers more than 1 million km2and large parts of it are inaccessible due to the lack of roads and the dense vegetation; only the parts where the river is navigable are accessible. A huge part of the plants and insects is not yet inventoried. The rainforest contains several large National Parks that are of great value. The rainforest is better preserved than in other African countries, because the wood processing and exporting companies are established mainly in the environment of the Atlantic Ocean. A more important threat is the expanding population through which woods have to make place for agriculture. Next to that, wood is the only affordable fuel. The rainforest in the Democratic Republic of Congo is less ‘deceased’ than a lot of other rainforests, but it is also more vulnerable due to the absence of any kind of regulation by the not functioning government. A large part of eastern Congo is governed by armed factions that are not controlled by the government. And the enormous poverty of
4The original picture is coming from: http://ec.europa.eu/world/images/flags/cg-lmap.gif
5CIA, The World Fact book
almost all inhabitants causes a destruction of the rainforest by using it as a source of survival and illegal incomes. Concluded: the poverty is the largest threat for the nature6.
2. Culture
The Democratic Republic of Congo has an estimated number of 500 different folks, each of them with their own language. Four of these languages have acquired a national status of which Lingala and Swahili have crossed their ethnic groups the most. The official language is French. The Democratic Republic of Congo has hundreds of different cultures that have developed a huge diversity of art styles. The visual arts have even influenced leading artists in western countries. An enormous diversity of masks and sculptures/ carvings has been created by the different folks. In most cases these objects have in common that they are functional and are important in everyday life. Often, the objects are a part of religion, like ancestor cult, funeral ceremonies, fertility and initiation rites and worshipping of gods. The colonization and Christianizing have decreased this role. Contemporary painters also access the interest of foreign countries. The new generation of writers has converted successfully traditional oral genres like fairy tales, fables, ritual texts, epics etc. to literature. Problems are however:
literature depends on an intellectual class, but the Belgian colonial model was not ideal for creating one. Other problems were: freedom of expression and well-functioning book companies and publishers that are not strong points of Congo. A lot of authors were therefore restricted to a small public. The cultural discipline with which contemporary artists have reached the stages worldwide is music. Next to the Congolese inhabitants, the remainder of Africa, and a substantial number of people in Europe, North America and Japan are enthusiastic fans. The traditional music was interconnected to ceremonies and rituals, but also had a recreate function. The Congolese music, sung in Lingala, is about the backbone from the national identity, in the country that is in so many ways divided and torn. They consider their music as a blessing from above to compensate a part of the suffering wherein the country is immersed for decades7.
3. Society
From the total population in the Democratic Republic of Congo, 46.9 percent is 14 years or younger, 50.6 percent is between 15 and 64 years old and only 2.5 percent is 65 or older8. The buying power and living standard are decreased to all time low, there is no working legal system, the economy is almost fully dismantled and there is almost no employment. Public services do not exist anymore and Departments work with budgets that only exist in theory.
Salaries are very low and are paid irregularly. Medically schooled employees tend to go to the cities to search a job. Inaccessibility of large areas of the country and large migrations of inhabitants due to the violence make it difficult to map health problems. Preventive activities like vaccination campaigns and health education are impossible to organize and therefore deceases can spread very quickly. AIDS is one of the most threatening deceases and malaria is also gaining ground. As the health care, the quality of education is very bad and continuous to get worse and employees are not paid regularly. Therefore, parents have to contribute in the school’s costs, which is not possible for a huge amount of families. The number of drop-outs is enormous.
The problems in Congo are worst in cities and especially in the capital Kinshasa that has around 10 million inhabitants. Problems in the cities and countryside are not the same. The
6K. Berwouts, Congo, 2001
7K. Berwouts, Congo, 2001
8CIA, The World Fact book
daily struggle for life is more difficult in the cities; most inhabitants live on the edge of famine. Most families in the quarters only eat one meal per day or even once per two days.
Available import products decrease and meat, fish, grain and vegetables are consumed less and less. Manioc with its low nutritional value is most important in the daily nutrition.
Because of the bad conditions of the roads and scarcity of energy, the supply of cities is difficult. Due to high rents, it is very difficult to grow food for own use near their houses. The quality of public transport is very bad, and when it rains hard there is no public transport due to the bad quality of the roads. The Democratic Republic of Congo is still a rural country. The urbanization is a recent phenomenon (since the 1940s), however, due to the violence of the past years the exodus of the countryside is accelerated. Families hope to regain their physical safety. In Kinshasa, the hopelessness is very frustrating for the inhabitants from which half is under twenty years old.
The country is not the best environment women can wish for. However, women are the strength that to some extent holds the society together. They lead many single-parent families and older sisters take care of their younger brothers and sisters when they are orphan.
Moreover, women control the major part of the informal economy. Development organizations try to help inhabitants and are most important for the fight against poverty.
Vocational trainings, providing microcredit and alphabetize programs have little result. There is however a high diversity of organizations that lack cohesion and a common vision for helping the inhabitants. Inhabitants of the country are not busy with human rights or democracy, each day they struggle to survive. Helping the society does not work at all on the longer term when the root causes of the current situation are not tackled and changed9.
4. History & politics
Congo is a Belgian colony between 1908 and 1960. Congo became independent at the fourth of June 1960 while the country was hardly prepared to become independent. Already in July, there is a national chaos and a government crisis. The following five years are very turbulent and the different governments are not able to control the situation. At November 1965, the United States of America help Joseph Mobutu to get the power which would last until 1997.
Mobutu is able to keep all concerned parties satisfied for a while. The country name changes to Zaire in 1971 which was the beginning of Mobutu’s campaign of retrocession where western influences are reduced and the pride of the African origin is found again. At 1973 Mobutu disowned foreign companies which did not work out well and the economy is damaged irreversibly. In 1990 Mobutu proclaims the end of the one party system: one year later there are 225 different political parties. Mobutu keeps seizing every opportunity to foster chaos and violence. A few weeks after the proclamation his elite troops cause a massacre at a campus. A few months later, the army loots throughout the country. In 1992 and 1993 there are heavy riots where thousands inhabitants are killed and the army loots again. Mobutu wants to be the winner of the transition period and leaves no opportunity to block the process of democratization.
In July 1994, two million Hutus from Rwanda were on the run for the Tutsis and ended up at the eastern part of Zaire. Mid 1996 there are Tutsi regimes in Rwanda and Burundi that have a good relationship with Uganda, while the opposition of these three countries (Hutus) operates from Zaire. In October 1996 the Tutsis that live in Zaire received the message to leave Zaire;
however, they resisted and got support of the Rwandese army that wanted to dismantle camps of the Hutu rebels in Zaire. Opponents of Mobutu from the years after the independence
9K. Berwouts, Congo, 2001
formed an alliance with the armies of Rwanda and Uganda. Gradually, both countries moved to the background and putted forward Mobutu’s former opponent Laurent Kabila. The alliance, internationally supported by the United States of America and Canada, reached the capital of Zaire at May 17, 1997 and conquered the power. Twelve days later Kabila becomes the new president and changes the name Zaire to the Democratic Republic of Congo. In September, Mobutu dies by cancer that has weakened him already for years.
Kabila’s relationship with Rwanda and Uganda deteriorates quickly. In August 1998, Rwanda and Uganda together with a mixture of Congolese opponents of Kabila try to get Kabila away.
This group of rebels falls apart; new groups arise and other neighboring countries get involved. The situation is very chaotic, because of the amount of different armies with different interests that fight against each other and it is unclear which parts of the nation are precisely controlled by which groups. The inhabitants of Congo, the government, the top of the army and all parties involved by the conflict do not believe that Kabila can solve the situation. In January 2001, Kabila is killed by his bodyguard what was not a surprise to anyone. Kabila’s politically inexperienced successor is his son, Joseph Kabila. His commission is an effort of the government to emphasize continuity. Joseph Kabila made career very rapidly in the Congolese army during the reign of his father.
Meanwhile, not all parts of the country are controlled by the government. The eastern part of the nation is still very violent due to local militias that are not controlled. The population is dependent on the arbitrariness of the armed people. The violence is not ideological: it is all about controlling the minerals of East Congo. This exploitation is organized from Rwanda and Uganda10.
5. Economy
The country has potential wealth because of its minerals. The profits have however never benefitted the Congolese inhabitants. Because of the presence of minerals, a war economy has arisen and there are many interests by maintaining the conflict. The Gross Domestic Product is unlikely low: less than 0.82 USD per inhabitant per day (estimation 2008)11. The living conditions are however not worse than in some neighboring countries which have a higher Gross National Product, so the Congolese inhabitants seem to have less trouble with surviving than the statistics suggest.
The Democratic Republic of Congo has large reserves of: copper, cobalt, magnesium, platinum, cadmium, germanium, silver, tin, diamonds, bauxite, gold, nickel, zinc, uranium, tantalum and oil and gas bubbles. Next to that, there are huge possibilities for doing agriculture: tropical products and Mediterranean and European crops can be cultivated. In the past, crops like palm oil, coffee, tea and cotton were exported. Despite all this, the country is one of the poorest of the world. The state of the current economy is partly caused by the colonial period: large companies have done high investments in the mining industry, but were all aimed at exploiting minerals, especially copper. After the independence in 1960, the country was an export country to multinationals and holdings; there has never been a processing industry. The Congolese could not influence the market or its prices. After Mobutu took the power in 1965, the focus and dependence on minerals, especially copper, increased.
There has never been a well agricultural policy; there was small-scale agriculture to meet people’s own needs. Mobutu did not look after agriculture, but focused on prestige projects
10K. Berwouts, Congo, 2001
11CIA, The World Fact book
that had in common that they never worked at full capacity; foreign financiers earned a lot of money, Mobutu’s personal fortune increased and saddled up the nation with a huge burden of debt. When the international economy deteriorated in 1973, the prices of minerals collapsed and because of the nation’s dependency on exporting minerals, the consequences were very high. Mobutu caused the stroke in the neck by disowning foreign companies. After three years this is undone, but most of these companies where irreparable damaged. Meanwhile, the corruption in the nation is that large that in 1977 Mobutu calls-up the population to steel only moderately! This is however too late. The way Mobutu and his companions have stolen money of the public treasuries for years is now adopted by the nation’s inhabitants. Officers, soldiers, and policemen are often not paid which results in bribing and extorting citizens to gain income.
The living standard, employment, infrastructure and social services became worse and at the end of the 1980s it was not even possible anymore to mine minerals that required processing before exporting them what had serious consequences on the treasury. The national debt is sky-high. The unemployment is enormous; wages of officers are often not paid and public services like health care and education do not function. It is the informal economy that consists of innumerable goods and services that keeps millions of Congolese surviving. The nation where the formal economy is collapsed is a place with huge possibilities for unscrupulous people: already after the independence in 1960 diamonds are the centre of illegal trade and conflicts. Already during Mobutu’s government there was an illegal trade of diamonds where the yields did not end up at the public treasury. Since the second half of the 1990’s neighboring countries like Rwanda and Uganda are at war with East-Congo to mine and sell Congolese minerals that need little or no processing, especially diamonds. These minerals are both the way to finance the wars as the yields to continue the conflict situations.
Most yields of these minerals do not end up in public treasuries, but at powerful army leaders.
So there are a lot of interests to continue the conflict situation endlessly at the eastern part of Congo. The contemporary Congo is still dominated by bribery and extortion12.
The Human Development Index (HDI) from the UNDP measures development by combining indicators of life expectancy, educational attainment and income into a composite human development index. ‘The HDI sets a minimum and a maximum for each dimension, called goalposts, and then shows where each country stands in relation to these goalposts, expressed as a value between 0 and 1’13. The HDI ‘provides a broadened prism to view human progress and the complex relationship between income and well-being’. The HDI for the Democratic Republic of Congo is 0.361 and it is ranked at 177thof 179 countries with data14.
1.2 Heineken N.V. and Bralima S.A.R.L.
This paragraph exists of two parts. The first subparagraph starts with a short description of Heineken N.V. where Bralima S.A.R.L. is a part of. Heinekens company profile, strategy and goal and the way that Heineken N.V. is managed are described. The second subparagraph describes Bralima S.A.R.L.’s history and development and its current market position.
1.2.1 Heineken N.V.
Company profile
12K. Berwouts, Congo, 2001
13UNDP Human Development Indices
14UNDP Human Development Index: Statistical update 2008
Heineken N.V. is part of the food industry. Heineken has a long history that goes back to 1864. Gerard Adriaan Heineken buys a small brewery called ‘De Hooiberg’ at the heart of Amsterdam. Four generations of the Heineken family have worked on worldwide growth and expansion of the brand and company Heineken. Heineken is not anymore directed by the family, but Alfred Heineken’s daughter is still highly involved to the company. During 145 years, Heineken is developed from a small local brewer in Amsterdam to a worldwide company with an international brand that employs more than 50.000 persons. It is the largest brewer in The Netherlands, the largest brewer and cider producer in Europe and is in the top 5 of largest breweries internationally. Heineken is sold in more than 170 countries and is the premium beer all over the world.
Heineken has the largest market distribution of all international brewers with its 125 breweries in more than 70 countries and the worldwide network of distributors. The worldwide reach is a combination of wholly-owned companies, affiliates, license agreements, strategic partnerships and alliances. Some of Heinekens wholesalers distribute also wine, distilled and soft drinks.
Heineken strives for having the world’s most prominent brands portfolio and being the leading brewer in all markets it operates at. The most important international brand is Heineken, but Heineken brews en sells more than 200 different international premium beers, regional and local beers, special beers and ciders. Heineken N.V. has sold a volume of 125.8 million hectoliters of beer in 200815.
Strategy and goal
Strategy: ‘Heineken aims for sustainable growth as a broad market leader and aims for segment leadership. In both cases, the Heineken brand plays an important part. A broad leadership is usually established by acquiring strong brands, which are combined into a new, larger company. Offering training to the employees, improving the organization, and introducing new technology then reinforces the positions of the local beers. This results in economies of scale that create a distribution network for both the local beers and Heineken beer. If a market is already in the hands of other brewers, all energy is devoted to developing a premium segment with Heineken beer, and if feasible, specialty beers’16.
‘The goal of Heineken is to grow the business in a sustainable and consistent manner, while constantly improving profitability. The four priorities for action include:
1. To accelerate sustainable top-line growth 2. To accelerate efficiency and cost reduction
3. To speed up implementation: committing to faster decision making and execution 4. To focus on those markets where Heineken believes it can win’17.
Management of Heineken N.V.
Figure 1.2 depicts the way Heineken N.V. is managed.
15Heineken N.V., Annual Report, 2008
16www.heinekeninternational.com
17www.heinekeninternational.com
Figure 1.218
The management of Heineken N.V. is run by the Executive Board that consists of two members: the CEO and the CFO. Their primary duties are to initiate and implement corporate strategy and to manage Heineken N.V. and its related companies.
Heineken distinguishes eleven departments or Groups that are headed by Group directors.
These departments are: Commerce, Supply Chain, Human Resources, Corporate Relations, Legal Affairs, Internal Audit, Control & Accounting, Finance, IT, Business Development and Business Processes.
Heinekens breweries are spread over more than 70 countries; Heineken divides its operating companies into five operating regions: Western Europe, Central & Eastern Europe, North &
South America, Africa & the Middle East and Asia Pacific. Each region is headed by a Regional President.
All green colored rectangles in Figure 1.2 denote that their Group Director/ Regional President together with the two members of the Executive Board are members of the Executive Committee. So the two members of the Executive Board, the five Regional Presidents and five of the eleven Group Directors form together the Executive Committee.
The Executive Committee supports the development of policy and ensures the alignment and implementation of key priorities and strategies across the organization19.
1.2.2 Bralima S.A.R.L.
Bralima S.A.R.L.20 is one of Heinekens operating companies in the Democratic Republic of Congo and belongs to the operating region Africa & the Middle East. Bralima S.A.R.L.
currently consists of six sites spread over the country: Boma, Kinshasa, Mbandaka, Kisangani, Bukavu and Lubumbashi which is depicted at Figure 1.3.
18www.heinekeninternational.com
19www.heinekeninternational.com
20The name Bralima is an abbreviation for Brasseries, limonaderies et malteries. S.A.R.L. is an abbreviation for Société par Actions à Responsabilité Limitée. This is a company whose liability is limited to the contributions of its members. Shares are not freely transferable; transfers require the agreement of all shareholders
Figure 1.321
The six sites are led by the ‘COMEX’ which is an abbreviation of Comité Exécutif. The COMEX consists of the General Director, Financial Director, Technical Director, Marketing
& Commercial Director and Human Resources Director and is seated at the largest site that is located at Kinshasa, the nation’s capital.
This research took place at the main site of Bralima S.A.R.L. in Kinshasa. To get an impression of the organization, Bralima S.A.R.L.’s history and development will be outlined below after which the current market shares and volumes sold will be described.
History and development of Bralima S.A.R.L.
After the First World War, Belgian businessmen visited the former Belgian Congo to look for investment opportunities. They discovered that the colonial government was interested in producing beer for the country’s inhabitants, because beer produced by the inhabitants caused major health problems. A brewery that could produce a high quality beer would be welcome.
Supported by the Bank of Brussels, a couple of Belgian businessmen founded a brewery called ‘La Brasserie de Leopoldville’ at 23 October 1923 by investing 4.000.000 Congolese Francs in the former Leopoldville (currently Kinshasa). At 27 December 1926 the first Primus beer is bottled and consumed.
Four major problems had to be dealt with during the start-up of the brewery:
1. Selling beer to other countries was not authorized by the government
2. A yearly volume of 35.000-40.000 hectoliters of German beer with a higher quality was imported
21The original picture is coming from: http://ec.europa.eu/world/images/flags/cg-lmap.gif
3. The price appeared to be too high compared to the buying power of the Congolese inhabitants
4. The economical world crisis started and impacted the Congolese economy too.
In 1933, the brewery is even at the edge of bankruptcy and sells less than a tenth of the volume of imported beer. Due to a new director, pasteurizing the beer and an improved production process, the quality of the beer improved and the results became better and better.
Around 1945, the brewery benefited from the economic boom in Congo after the Second World War and business is thriving again. Shareholders became confident again and invested and decentralized by founding new breweries in: Bukavu (1950), Brazzaville (1952), Bujumbura (1954), Kisangani (1957), Boma (1958), Gisenyi (1959), Mbandaka (1972).
In 1960 Belgian Congo became independent, but the shareholders decided to stay in Central Africa and to continue production. Further investments have been done by installing plants for producing soft drinks at all breweries. The breweries had hard times due to Mobutu’s period of Zairianization, the retrocession, and the economic crisis. Despite all this, in 1973 ‘La Brasserie de Kinshasa’ (Mobutu renamed Leopoldville into Kinshasa) modernized by building a new brew house with a capacity of 400.000 liters per day by using stainless steel and abandoning the old copper tanks.
During the period 1979-1981, boats have been developed for supplying the sites in the inlands of Zaire (the former Belgian Congo) with raw materials and replacement parts.
In 1987, the Heineken Group becomes majority stakeholder of all sites of Bralima S.A.R.L.
One year later, Bralima S.A.R.L. opens in Kinshasa ‘the Brewery of the year 2000’ with 12 ultra modern stainless steel tanks with a capacity of 250.000 liters each, a new beer filter with a speed of 30.000 liters per hour. The operations became completely automated and had a central cleaning station, an installation for water treatment for the three yeast tanks and labelers with a capacity of 24.000 bottles per hour each.
The expansion continuous and in 1992 CIB (Compagnie Industrielle de Boissons) that bottles mainly Coca Cola and owned by a soft drink plant in Lubumbashi is acquired. Four years later, Bralima S.A.R.L. founded EBAC (l’Ecole des Brasseries de l’Afrique Centrale) in charge of training employees of seven African countries. At the 75th anniversary of Bralima S.A.R.L. in 1998, BONAL that bottles mainly soft drinks of Pepsi and Mirinda is acquired.
In 2002, Bralima S.A.R.L. modernized its packaging lines and in 2003 at the 80thanniversary, all efforts are crowned by receiving the certification ISO 9001. Bralima S.A.R.L. is the only company in Central Africa that is awarded at all levels at international standards22.
Currently, Bralima S.A.R.L. owns six sites (as depicted at Figure 1.3) in the Democratic Republic of Congo and despite the political instability of the nation, Bralima S.A.R.L.
continuous to invest in modernizing and expanding its current sites to maintain its dominant position in this country. The expansion of two packaging lines at the site in Kinshasa with a third in 2006 and even a fourth packaging line in 2008 and the expansion of the soft drink plant in Lubumbashi with a new brewery in 2008 outline these investments.
22Bralima: 4 x 20 ans, 2003
With its 85 year, the site in Kinshasa is one of the oldest of Africa and about 1180 persons are employed at this site of which 720 are contracted by Bralima S.A.R.L. and 460 are hired from two employment agencies.
Market share and volumes
Bralima S.A.R.L. has three competitors in the Democratic Republic of Congo of which Bralima S.A.R.L. has 65 percent of the market share at the end of 2008. The market share of the largest competitor is only 23.5 percent.
Bralima S.A.R.L.’s market share of the main site in Kinshasa, where this research took place, is 68.1 percent against 31.9 percent market share of the only competitor. The total volume sold by Bralima S.A.R.L. in Kinshasa has increased enormously over the last years. During the last four years, the volumes sold in Kinshasa increased from 1.090.000 hectoliters in 2005 to 1.265.000 hectoliters in 2006 to 1.487.000 hectoliters in 2007 to 1.895.000 hectoliters in 2008. The increase of volumes sold in the recent years is caused for about 33 percent by a growing market and for about 67 percent by increasing market share at the expense of the sole competitor23.
The site of Bralima S.A.R.L. in Kinshasa produces fourteen different SKU’s24 of which nine SKU’s are soft drinks, four are beer and one is Maltina25. From the total volume sold in Kinshasa in 2008, 37.80 percent contains of soft drinks, 55.77 percent of beer, and 6.43 percent of Maltina.
1.3 Conclusions
The Democratic Republic of Congo is potentially extremely rich due to its many minerals.
However, the history of the country is characterized by a struggle for these minerals. There are too many parties that want to mine them and let no one standing in their way by doing so.
The Congolese population has never benefitted from the presence of the minerals. After becoming independent from Belgium, there has never been a government that could bring peace and prosperity to the nation. The country became more and more an anarchy and lawless. Every day is a struggle to survive for by far the largest part of the population. The country is currently ranked 177th of 179 countries with data on the Human Development Index.
Despite all difficulties of the country, Bralima S.A.R.L. consists already 85 years and was able to overcome the difficulties it faced. The company kept investing to modernize and improve the production process and quality, sites have been extended, new sites have been opened and acquisitions have been made. Next to that the EBAC is established to train employees of seven African countries. Currently, Bralima S.A.R.L. has by far the largest market share compared to its competitors and the sales volumes keep increasing.
From here, Bralima S.A.R.L. will be referred to as ‘Bralima’ and concerns the site in Kinshasa only.
At Chapter 2 the physical areas where the research has been done, the packaging lines and the maintenance department, will be explained in more detail.
23This is an estimation of the Marketing & Commercial Director
24Next to these fourteen SKU’s, relatively small quantities of several Coca Cola products in cans and bottles of Heineken Beer (both imported) are sold. These volumes are negligible small
25 Maltina is produced in the brew house, but contains no alcohol and is vitamin rich. It competes with the regular soft drinks
2 Packaging lines and maintenance department
2.1 Introduction
The Brewery Manager is responsible for the six departments depicted at Figure 2.1. He reports at the Technical Director.
Figure 2.1
The actual production process is spread over the production and packaging departments. Beer and soft drinks are produced at respectively the brew house (production department) and the
‘siroperie’ (packaging department). Beer and soft drinks produced at specification are stocked at enormous tanks at respectively the brew house and siroperie, where it waits to be transported to the packaging lines to be bottled. The packaging lines belong to the packaging department. Beer produced is bottled at packaging lines 1 and 3 while soft drinks are bottled at packaging lines 1, 2 and 4. This is depicted at Figure 2.2.
Figure 2.2
The packaging lines are the bottleneck of the brewery and their performance26 has to increase to keep up with market demand. The stock of finished products in the full warehouse is less than a few days of sale. This research will improve the performance of one of the packaging lines by changing the way of doing maintenance and thereby the way of working at the packaging line and the maintenance department. Therefore a well understanding of both the packaging lines and the maintenance department is necessary; which is provided respectively at paragraph 2.2 and 2.3 of this chapter.
2.2 Packaging lines
An understanding of the packaging lines is presented in two subparagraphs. The first subparagraph explains how tasks are spread over employees that run the packaging lines, because personnel of one of the packaging lines will become involved by improving the packaging line’s performance. The second subparagraph explains characteristics of the
26 The performance of the packaging lines is described with the ‘Operational Performance Indicator’ (OPI) which will be defined at paragraph 3.3
packaging process to picture the physical area where improvements of performance will take place.
2.2.1 Running the packaging lines
The Packaging Manager is the head of the packaging department. He is responsible for the four packaging lines and the siroperie. As mentioned above, the siroperie also belongs to the packaging department, but does not form a bottleneck and will therefore not be the focus of this research. The Packaging Manager is assisted by two Chefs de Shift and sixteen Team Leaders, which is depicted at Figure 2.3.
Figure 2.3
The packaging lines produce 24 hours per day and seven days per week during all 52 weeks of the year which is realized by a four shifts system. Almost all 270 members of this department work in a four shifts system: three shifts per day, while one shift has a rest-break.
Each employee works two days during the first shift (06hr00-14hr00), two days during the second shift (14hr00-22hr00) and two days during the third shift (22hr00-06hr00), which is followed by a rest-break of two days after which he starts working again at the first shift. The packaging lines are run by six categories of employees: Chefs de Shifts, Team Leaders, operators, fork-lift drivers, cleaners and day laborers. Each category is explained shortly below.
1. Two Chefs de Shifts work between 07hr00 and 20hr00 and assist the Packaging Manager to manage all four packaging lines. They control and support the Team Leaders. The Chefs de Shifts are responsible that all packaging lines keep on producing towards their maximum capacity. When the performance of packaging lines is not satisfactory during evenings and nights, one of the Chefs de Shifts can be put in during these periods to increase performance
2. Sixteen Team leaders work in the four shifts system: four per packaging line which is one per shift. Each Team Leader controls directly the performance of his packaging line and corrects the operators, fork-lift drivers, cleaners and day laborers directly. The Team Leader reports at the Chef de Shifts and gains their support
3. Operators also work in the four shifts system. Not all operations depicted at Figure 2.4 (below) are manned by operators. During each shift, the maximum number of operators per packaging line is eight (depending on the presence of a pasteurizer and a labeler at a
packaging line). The work stations that require an operator are: depaletizer, unpacker, bottle washer, filler, pasteurizer, labeler, packer and paletizer
4. The four shifts system is also used for the fork-lift drivers. During each shift, there are two fork-lift drivers per packaging line. One driver brings pallets from the empty crates warehouse to the depaletizer and the other driver brings pallets with full crates from the paletizer to the full crates warehouse
5. Fifteen cleaners in total clean the floors, machines and conveyors of all four packaging lines and work between 08hr00 and 16hr30
6. During each shift there are about six day laborers per packaging line. They are put in for all kinds of tasks. Examples are: taking bottles out of the crates that have not been taken out by the unpacker, taking seriously damaged crates off the conveyor after the unpacker and placing them outside etc.
Since 2005 both operators as Team Leaders are starting to get involved by doing preventive maintenance and small corrective maintenance tasks27 through being a part of small improvement groups next to doing the tasks described above. This involvement of operators and Team Leaders for supporting the maintenance department and improving their equipment belongs to doing Total Productive Maintenance (TPM). However, the process of implementing maintenance activities through TPM goes steady and its desired organization culture is not yet ingrained; this will take time. It is explained in more detail at Appendix 2.
2.2.2 Characteristics of the packaging process
This subparagraph explains characteristics of the packaging process, because it is the physical area where improvements will be made. This subparagraph will start with a figure of the packaging process that is explained briefly. After which the differences between the four packaging lines are explained. Then, the packaging process is typed on the basis of the product variety and facility layout. Finally, the vulnerability of the packaging lines for equipment stoppages is explained.
Figure 2.4 shows all operations, stock points and possible routings due to differences between the four packaging lines.
27Both preventive as corrective maintenance is defined and explained at the theoretical framework of Chapter 4
Figure 2.4
The packaging process starts at the empty crates warehouse and ends at the full crates warehouse that is the Customer Order Decoupling Point (CODP). All products are made to stock; all activities are based on forecasts of customer demand and not on actual demand. The CODP is the full crates warehouse and from this stock point, orders are driven by customers instead of forecasts. Up to eight work stations are manned with an operator. The collection of work stations is focused on making one product type in large numbers and all products of a SKU have the same routing. The packaging lines are continuous production lines: operations are done while the product keeps moving to the next work station28. The packaging lines are multi-model lines: during a certain period one SKU is processed after which the packaging line will have a changeover for processing another SKU. Most equipment of the packaging line is used for all SKU’s that will be processed at it29.
Until November three packaging lines were in use. Since the beginning of December a fourth packaging line has been added for being able to meet the increasing market demand. Due to different requirements of products and differences between the four packaging lines, not each SKU can or will be bottled at all packaging lines:
28Drs. J. Riezebos, Syllabus Inrichting van Transformatieprocessen, 2002
29Drs. J. Riezebos, Syllabus Inrichting van Transformatieprocessen, 2002
- At packaging line 1 all fourteen SKU’s can and will be bottled
- At packaging line 2 there are no pasteurizer and labeler, so only soft drinks without labels can be bottled, which are seven SKU’s. In practice, mainly one SKU is bottled at this packaging line
- At packaging line 3 there is no mixer next to the filler, which is necessary for bottling soft drinks, so only beers and Maltina can be bottled. In practice two SKU’s are bottled at this packaging line
- At packaging line 4 there is no pasteurizer and labeler, so only soft drinks without labels can be bottled, which are seven SKU’s.
A comprehensive description of the whole packaging process and differences between the packaging lines can be found at Appendix 1.
Schönsleben (2007) explains different possibilities for the product variety and the facility layout and both of them are explained below for the packaging lines:
1. The product variety describes the degree to which the producer responds to customer requests. The product variety of the products processed by the packaging lines is that the products are standard products, or ‘off the rack’ products that have no product variety30 2. The facility layout is the way that production infrastructure is physically organized, the
degree of dividing labor on personnel and the course that orders take through the work stations31. The facility layout of the packaging lines is a ‘product layout for high-volume line production’: the work stations form a chain and are linked by transport lines, operations are carried out in direct succession, generally only a few different products are produced, whenever possible in large batches with setup times between the batches32. The characteristics of product variety determine which kind of facility layout has to be used.
The combination of the product variety and facility layout described for the packaging lines is typed as mass production. Schönsleben (2007) describes mass production as: ‘high-quantity production characterized by specialization of equipment and labor’33. At this kind of production process, high levels of utilization or uptime will be pursued and therefore production losses have to be reduced. As will become clear at the next chapter, this also applies for the packaging lines due to the height of the market demand.
The work stations are coupled by transport lines and are dependent on the feeding and the next work station: a work station may have to wait for supply of work by the feeding work station and for supplying its own output to the next work station. A buffer between work stations creates more space and the work stations are more decoupled34. The packaging lines have Work-in-Process (WIP) between each work station that functions as decoupling stock.
The stock is created by the length and width of the transport lines. Decoupling stock arises when two consecutive work stations do not have the same speed of processing and makes it unnecessary to align these work stations completely35. However, the stock on the transport lines between the work stations is not that large which means that a stoppage of a work station will quickly lead to stoppages of the feeding and the receiving work stations. So the packaging line is very vulnerable for stoppages of equipment; more specific for three of the
30P. Schönsleben, Integral Logistics Management, 2007
31P. Schönsleben, Integral Logistics Management, 2007
32P. Schönsleben, Integral Logistics Management, 2007
33P. Schönsleben, Integral Logistics Management, 2007
34Drs. J. Riezebos, Syllabus Inrichting van Transformatieprocessen, 2002
35Dr. D.P. van Donk, Syllabus Inrichting van Transformatieprocessen, 2002
