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Historic award for SABMiller’s ILC brewery

Historic award for SABMiller's ILC brewery

Executive Summary
In 2001, SABMiller became the first international brewer to enter Central America when it took a controlling interest in Industrias La Constancia (ILC), a brewery and soft drinks bottler based in El Salvador. When ILC became a wholly-owned subsidiary a few years later, SABMiller introduced TRACC best practices to address change management aspects as well as the high mean age of the plant equipment. The subsequent introduction of innovative ideas and practices saw ILC become the first Central American plant to receive the Coca-Cola Phase 4 Quality Award.

Production Before After
Beer losses 2001 11.31%
Beer losses 2006 5.96%
Line efficiencies 78% 91%
Brews in one day 5.85 7.15
Electricity 18.5 kWh/hl 10 kWh/hl
Water 11.15 hl/hl 4.36 hl/hl
Thermal energy 164 MJ/hl 99.32 MJ/hl

 

Situation
As is usually the case with resurgent economies, competition in every business sphere is fierce, and most multinationals want a piece of the action. Markets and market share are changing continuously, no less so in the bottling industry.

Therefore, the challenge at ILC was to implement World Class Manufacturing best practices in a market undergoing quantum changes, and on a plant with ageing equipment and machinery.

Action
The TRACC intervention emphasized quality improvements and worker training in housekeeping and hygiene. To devise a prioritized replacement strategy, existing equipment was evaluated rigorously in terms of material risk, energy usage and environmental impact.

Implementation concentrated on 5S, Teamwork, Visual Management, and Focused Improvement. The latter was accompanied by intensive training, and outcome expectations were communicated to all employees.

It was the first international brewer to enter Central America. Since then the group has expanded its Latin American operations into six countries.

Daily production meetings focused intensively on key performance indicators. Changeover time reduction also received attention.

Results
Soon the prevailing downtime of 3-4 hours dropped to less than one hour. Despite the mean age of the plant equipment, innovative ideas and adjustments assisted greatly with the positive outcomes.

SABMiller's ILC BreweryOn the brewing side, beer losses dropped from 11.31% in 2001 to 5.96% in the 2006 financial year, placing it tops in SABMiller’s global rankings. Line efficiencies improved from 78% to 91%, while brew house performance went up from 5.85 to 7.15 brews a day.

Electricity consumption showed a marked improvement, down from 18.5 to 10 kWh/hl. Similar reductions were experienced with water and thermal energy consumption, dropping from 11.15 to 4.36 hl/hl and 164 to 99.32 MJ/hl respectively.

In 2005, ILC became the first Central American plant to receive the Coca-Cola Phase 4 Quality Award, a management-driven measurement system of all plant processes and strategic objectives. This demonstrates the company’s commitment to WCM.

It has since become the number one CSD plant in SABMiller’s global rankings, with lowest syrup, sugar and pre-form losses and best factory efficiencies.

Management also confirmed that there had been a culture change: people realized that there are better ways to manage the various processes and lines. And the company’s quality awards prove the prevailing mindset.

Company Background
ILC was founded by Don Rafael Meza Ayau in 1906. SABMiller took a controlling interest in both the brewery and the company’s carbonated soft drinks (CSD) Coca-Cola bottling plant in 2001. Four years later, ILC became a wholly-owned SABMiller subsidiary.
SABMiller first entered the Latin American market with the acquisition of Cervecería Hondureña in Honduras. It was the first international brewer to enter Central America. Since then the group has expanded its Latin American operations into six countries, including Colombia, El Salvador, Ecuador, Panama and Peru.

Disclaimer
This resource has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained herein without obtaining specific professional advice. Competitive Capabilities International (CCi) does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this resource or for any decision based on it.

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