OM in the News: Dr Pepper’s Move to Kaizen
At its Plano, Texas, HQ and in manufacturing plants in the U.S. and Mexico, Dr Pepper’s mantra is RCI, or rapid continuous improvement (although some executives there use the Japanese word for improvement, kaizen). At “kaizen events,” teams of Dr Pepper employees spend several days dissecting every step of their work flow in search of waste.
Here are some details, based on a Wall Street Journal (Feb. 22, 2016) interview with Dr. Pepper’s CFO: “We’ve done 575 kaizen events. RCI is about taking the existing baseline and improving it by finding the waste. It starts with walking the entire process. We call it “going to gemba.” The goal is always to shorten cycle times. You would be surprised. You put a bunch of people in a room to describe how a process works, and they don’t all agree with each other—and they all work on the same process.
We have 32 people in the RCI group. They aren’t there to make improvements themselves but to facilitate teams. We’ve issued 6,500 certificates for participating in kaizen events. Through a number of projects, we improved inventory turnover by 35%, or 1.5 million square feet. We’ve also learned how to create flexibility, including setup reduction in our fountain-syrup line. Sanitizing lines to take the next flavor used to take an average of 32 minutes. We figured out we could do it in 13. Some of the changes are as simple as: He walked from the machine to get a tool. Why is the tool not at the machine?
We walk by waste every day. A team watched the process of fountain-syrup bags being assembled and packed into the cardboard boxes used to ship the bags. Somebody asked, “Why does that box have the maroon Dr Pepper logo on it when the box isn’t a consumer package?” You call on the box supplier and ask, if we took that off, how much could we save a year? They said $60,000, and we said great.”
Classroom discussion questions:
- What is RCI and why is it important?
- Explain the concept of inventory turnover (see Ch.11).