Effectively communicate, measure and implement to achieve a powerful, sustainable advantage.

BAKINGINDUSTRY

2

BIG Change Global Pty LtdT/A BIG Change Agencyenquiry@bigchangeagency.com

big changE agEncy.com

Global Reachmelbourne

brisbane

Jakarta

This document is presented on behalf of the big change agency in conjunction with Livebake and Factory in your Pocket. all rights reserved. The information contained within may not be reproduced without written consent from the publisher and is given in good faith, obtained from sources believed to be accurate at time of print however the big change agency cannot guarantee its accuracy and interested persons should not act on any statement, opinion or advice and rely on their own enquiries. all contained material does not infringe any copyright, trademark, defamation, libel, slander or title, breach of confidence, does not contain anything obscene or indecent, or does not infringe the Trade Practices act or other laws, regulations or statutes. Further to the above mentioned, these persons agree to indemnify the publisher, directors, affiliates and/or its agents against any investigations, claims or judgements. The views expressed by contributors and advertisers are not necessarily those of the publishers or affiliates. (bca_bi0315)

3

BackgroundWelcome to the BIG Change Agency difference...

1. The Markets1.1 Australia 1.2 South East Asia

2. Industry Challenges2.1 Employment. 2.2 Research and Development.

3. The Science3.0 Collaboration, Alignment and Cohesiveness. 3.1 The Process 3.2 The LiveBake Difference

4. Project Approach and Methodology

4.1 Objectives. 4.2 Methodology

5. Case Studies5.1 Enterprise. 5.2 Business

ConclusionReferences Notes

Contents

04

06

08

09

12

16

18

4

Australasian employees believe a mentally healthy workplace is the most important aspect to workplace happiness.

For companies, the everlasting task is to preserve and enhance competitiveness.

Competitiveness is the prerequisite for survival. Companies need to look for competitive advantage continuously. How can they stand out? Cost, price, quality, speed, innovativeness?

Companies need to mobilize their people on all levels to strive for competitiveness, to look for improvement, never to stand still.

(Hans-Paul Buerkner., Global Economic Symposium, 2014)

9/10

5

Welcome to the BIG Change Agency difference - Now ask yourself...

Is your organisation sufficiently productive, agile and innovative to remain relevant?

Today’s business environment is continually shifting with a lot of change happening very quickly. Whether it be from competitive, technological, social or political forces, the ability to respond to changing conditions is mandatory for long-term survival.

“We need to improve our productivity!” is a commonly used phrase, yet in boardrooms around the world, Leadership teams are constantly asking themselves – Realistically, where are the productivity improvements going to come from?

This question will be explored within this paper along with suggestions for effectively harnessing the employee collective brain.

By doing so, organisations can realise genuine productivity gains and carve out a sustainable competitive advantage, ensuring long term success.

6

1. The Markets

Australia has a strong, profitable and well regulated food and beverage retail sector which is increasingly engaging in both regional and global markets.

The baking industry in Australia is intricate comprising of powerful corporate level and a division of small to medium sized businesses in all baking product sectors.

At both retail and wholesale levels, baking is extremely competitive and disorderly.

This has proven more unstable in that the majority of industry businesses are operating in a mature domestic market with international exports only accounting for around 1.4 per cent of total annual turnover.

“From a manufacturing perspective, the industry is continuing to rationalise its capacity at the corporate level, with recent closures of bakeries and biscuit manufacturing plants. national franchises, especially in the bread sector, are increasingly drawing market share away from the major players.”

In 2011-2012, turnover in the industry was estimated at almost $3.7B, representing 3.5% real growth. Therefore total Australian sales for the industry is estimated at $5.1B.

1.1 Australia:

22%

32%28%

18%

Total Retailing

cakes/Pastries manufacturing

bread manufacturing

biscuit manufacturing

Source: IBIS World

Total Industry Turnover $5.1 Billion

BRI Australia LTD: The Australian Baking Industry - A Profile

7

1.2 South East Asia:

“indonesia’s baking industry is expected to record higher growth next year as a forecast increase in economic growth will further increase people’s purchasing power. The indonesian bakery association (aPEbi) estimates that total sales of baked products, from bread to cakes, may surge 15 percent to Rp 23 Trillion on the back of the improvement in the country’s economy.”

The Statistics…• Theassociationestimatestotalbakerysaleswillgrow

from the Rp 20 Trillion data recorded in 2014.

• Indonesiaisthelargestwheatimporteracrosstheentire South East Asian region – 6.3MMT in 2012.

• 380%increaseinflourmillsestablishedinSEAsiafrom2000 to 2012. Majority going into production for the end products to remain in SE Asia.

• ImprovedconditionsviaGovernmentregulationsand industry standards being enforced through marketing guidelines, export requirements, product certifications and internationally standardised labelling recommendations.

• Animprovedandstrengtheningeconomicstatusprovides better spending power, with the willingness to now pay for westernised wheat based products.

Linda Yulisman, The Jakarta Post, October 2014

8

2. Industry Challenges

Professional development in baking has been steadily changing from more traditional skills to the skills required to run manufacturing establishments with a high level of automation. This has been largely caused by industry deregulation, improvements in production technology and the availability of premix formulations, resulting in a reduced reliance on skilled bakers.

Training programs currently focus on the compliance and food safety factors of the industry and the preservation of standards rather than the development of skill sets. Many independent businesses now consider themselves more to be processors rather than bakers

In many cases the ingredient suppliers drive the R&D and advances in ingredient and premix technology have providedgreaterflexibilityandlesstechnicaldemandsonthe smaller bakeries.

With commercial companies largely managing the research effort, information on product and machinery developments has become extremely guarded however there are concerns that duplication is occurring in some areas as a result.

2.1 Employment:

2.2 Research and Development:

9

3.0 Collaboration, alignment and cohesiveness:

LiveBake

BIG Change Agency welcomes the strategic partnership with Australasia’s premier Baking manufacturing productivity improvement technology - LiveBake

Founded in 2013, LiveBake was developed with only one thing in mind, to help baking manufacturers become more efficient and more profitable, So that you can be the best at what you do. LiveBake offers a range of services to suit your exact needs including custom software, out of the box programs and process improvement consulting.

Each of these services has a common goal; that is, to turn your data into useful information and to ensure that everybody in the business has a real time understanding of exactly how they are impacting the business. This is done by making reports, dashboards and visual KPI’s a normal part of the business day.

3. The Science

10

3.1 The Process:

Your business is different to the next and you have specific needs that make you what you are. Because of this our process follows 5 steps to ensure that the end result for you is step change in the way your business operates.

automated Data collection, removing the emotion and the human element from data collection to increase speed and accuracy of the data to be used.

Data Entry optimisation, where a user interface is required for data collection we design one that is functional and a joy to use.

Turning Data into information, data when collected is just numbers and words, it is not until we filter, sort and refine this data that we begin to see the value in the resulting useful information

Reporting & business integration, utilising the award winning yellowfinbi we establish with you an agreed set of reports and dashboards, rather than being there for after the event reporting, these tools are integrated into your business as usual requirements and are customised to work with your current reporting practices.

aligning the factory culture and training initiative to the new system.

BIG Change Agency specialises in the consulting, facilitation, training and coaching required to ensure that the behaviour of all personnel aligns to the systems designed to produce benchmarked best practice in productivity and profits.

1.

2.

3.

4.

5.

11

3.2 The LiveBake Difference:

Our primary focus is not about getting another software program out there, instead the priority is to help you to optimise your existing business systems and increase the visibility of live KPI’s.

To do this we draw upon local expertise to design and oversee the business process and reporting interface and utilise a wide network of programmers as and when required.

REsERvE youR DiagnosTics oFFER wiTh BIG ChAnGe AGenCy via EmaiL: enquIRy@BIGChAnGeAGenCy.Com

12

4. Project Approach and Methodology

The key objective of the project alliance between BIG Change Agency and LiveBake is to provide an overall development of change and successive growth of the Australasian baking industry, including market trends and drivers.

Our related aims include:• Providingindustrywidemeasuresofmonitoring

and standardisation with the information to aid in the development of business policies.

• Providingbusinesseswithadetailed,profileanalysisfor diagnostics and the development of effective policies.

• Toincreasetheindustryparticipantsprofit,minimisewaste and establish employment stability that can be trialled, measured, reviewed and monitored. This data can be directly distributable to key stakeholders, consulting technicians and company wide leadership teams, ensuring continuity.

4.1 Objectives:

13

BIG Change Agency and LiveBake undertake the Australasian baking industry with drive and industry know-how. Our introduction of a manufacturing specific network of tools and operations.

The key steps being conducted in Australasia’s leading baking and manufacturing enterprises include:• Datasourcingandcollection.

• Industryconsultationandsurvey.

• Interpretationofkeymetrics.

• Culturechange.

• Gamification.

4.2 Methodology:

14

5. Case Study: 5.1 Enterprise

Initial Situation:

At the beginning of this 12 month period the plant was running with 2 production lines with a capacity of 16,000 loaves of bread per hour. DIFOT was being maintained at a high level but only through significant overtime. Plant KPI’s were in place and were running at an overage of:

KPI Uptime Rate Quality OEE

BEFORE SCORE 74% 82% 92% 55.8%

Improvement Approach:

The approach taken to make improvements was based around rigorous analysis of production and engineering data combined with rapid implementation of corrective actions.

Twice daily the improvement team would collect production data including detailed descriptions of all downtime and causes of waste. Through the analysis of a standard Pareto chart each day the top 2 reasons were fully investigated and corrective actions put in place to ensure there was no recurrence.

KPI Uptime Rate Quality OEE

AFTER SCORE 87% 89% 98% 78.9%

$$$ IMPACT $500k $270k $360k

15

The Results:

Improvements in machine reliability in an industrial bakery environment quicklyflowthroughthebusiness.

Less breakdowns mean less waste and more consistent production. This in turn led to more consistent quality, more reliable deliveries and an overall improvement in the consistency of business operations.

YourGrowth

Environment

Implementation

Structure

People

16

5. Case Study: 5.2 Business

LiveBake was commissioned to work with a leading Australian bakery with the scope to “Assess current situation and make a step change improvement to line output”.

Initial Situation:

Running 16 hour production shifts each day and with a new contract about to come on line this bakery had an urgent need to increase line output to enable additional volume to be made on the existing line.

On the line downtime, waste and giveaway were recorded manually with pen and paper and these figures were presented to the management team on a weekly basis. It was not the norm for this critical production information to be filtered down to the front line staff and there was not usually any pro-active follow up on the issues that were recorded.

Improvement Approach:

After spending time observing the line in operation it was evident that there was excessive downtime and giveaway that was not being recorded or acted upon. LiveBake initially undertook a staged approach to data collection:

Establish an Excel spreadsheet to collate and communicate the recorded line measures, at this point it was found that 20 minutes downtime and 4% giveaway a day was being recorded

introduce Livebake computer data entry point to replace the traditional pen and paper, this gamification increased the recorded downtime from 20 minutes to 60 minutes and the recorded giveaway from 4% to 5%.

connecting Livebake directly to the line equipment to gain exact downtime measurements led to the recording of over 150 minutes of downtime per shift and an increase in giveaway recording to 7%

1.

3.

2.

*Additional uptime was used to make and sell more.**Direct cost reduction of materials.

17

Factory In Your Pocket - Improvement Approach:The creation of the base line or ‘current state’ enabled both the bakery and LiveBake to agree on the next course of action; reduction in downtime and giveaway.

A project team was established to drive these improvements using both LiveBake standard reports and detailed Factory in Your Pocket analytics provided through Yellowfin software. Using standard improvement techniques combined with formal Root Cause Analysis and 5-Why investigations the team was able to identify and reduce the causes behind significant downtime and excessive giveaway. information to be filtered down to the front line staff and there was not usually any pro-active follow up on the issues that were recorded.

Results:In this project the Giveaway savings were a direct impact to the bottom line profit of the business. The total cost benefit to the business was $375,000 per year.

Factory in Your Pocket worked with and supported the site team over a period of 4 months, since the completion of this project the team have been able to undertake similar analysis and improvement without external support.

MEASuRE Downtime Per Day Giveaway Weight

BASElInE 150 minutes 7%

FInAl 30 minutes 2.5%

FInAnCIAl IMPACT $250k profit p/a $125k p/a

Baseline:This process completed over the period of 4 weeks allowed the establishment of the project baselines:

DOwnTIME PER ShIFT 150 minutes

wASTE unITS 1.5%

RATE (MAChInE SPEED) 95%

GIvEAwAy 7%

*Additional uptime was used to make and sell more.**Direct cost reduction of materials.

18

ReferencesDr Nasir Azudin Norizad ABD Rashid, Trends in wheat based products in S.E. Asia (2012), NH Consult: http://www.tradingeconomics.com

Larisa Cato, Bill Lambe & Robert Loughman, Indonesian wheat market – key opportunities for future development (2012), Department of Agriculture and Food, Western Australia: http://archive.agric.wa.gov.au/objtwr/imported_assets/content/fcp/cu2012_cato_larisa_indonesian_wheat_market_presentations.pdf

Department of Agriculture, Fisheries and Forestry, BRI Australia LTD (2003), The Australian Baking Industry - A Profile, Food Policy and Communications Section: http://www.agriculture.gov.au/SiteCollectionDocuments/ag-food/publications/rpi-pubs/rdc-outcomes/baking_industry_profile_2003.pdf

Larive (Thailand) Co Ltd, Business Opportunities Study in Thai Bakery Sector (2013), Embassy of the Kingdom of the Netherlands in Bangkok: http://thailand.nlembassy.org/binaries/content/assets/postenweb/t/thailand/embassy-of-the-kingdom-of-the-netherlands-in-bangkok/import/bakery-final-report_2013-7-01.pdf

Roslyn Jettner and Dr Larisa Cato Australian Export Grains Innovation Centre, Repositioning Australian wheat in Indonesia - Opportunities & Challenges (2013), Australian Grains Industry Conference: http://www.ausgrainsconf.com/sites/default/files/files/Presentations%202013/1345%2003%20R%20Jettner.pdf

Wayan Widya Arsana and Yanrui Wu, Comparing Regional Productivity Growth and Its Determinants in Indonesia and China (2013), The University of Western Australia: http://www.murdoch.edu.au/School-of-Management-and-Governance/_document/Australian-Conference-of-Economists/Comparing-regional-productivity-growth-and-its-determinants.pdf

Linda Yulsiman, Baking Industry Growth Set To Rise On More Stable Economy (2014), The Jakarta Post: http://www.thejakartapost.com/news/2014/10/24/baking-industry-growth-set-rise-more-stable-economy.html

FiYP Customer Diagnostic - Factory Questions, FiYP Mainenance Improvement Program - Engineering Audit, FIYP Maintenance and Business Strategy Alignment, FiYP Making Manufacturing Easier - Our Story, Factory In Your Pocket (2014-2015), Factory In Your Pocket: http://www.fiyp.com/

Communicate, Measure, Excel - Welcome to LiveBake, LiveBake (2015), LiveBake: http://www.livebake.com/

19

Notes

REsERvE youR DiagnosTics oFFER wiTh BIG ChAnGe AGenCy via EmaiL: enquIRy@BIGChAnGeAGenCy.Com

20

GLoBAL heAD oFFICe

meLBouRne oFFICe33 city Roadsouthbank victoria 3006 australia

eASTeRn AuSTRALIA

BRISBAne oFFICe55 baildon streetKangaroo Point Queensland 4169 australia

SouTheAST ASIA

JAKARTA oFFICe4b-02a Jl. gandaria Tengah iii, no.44Kebayoran baru, Jakarta selatan 12310 indonesia

BIG ChAnGe AGenCy.Com | enquIRy@BIGChAnGeAGenCy.Com