In February 2023, FrieslandCampina began one of the most ambitious operational excellence rollouts in its history. Across 48 manufacturing sites and a global supply chain spanning 30 countries, the business set out to create one consistent way of working. After FrieslandCampina Chief Supply Chain and R&D Officer David Cutter’s presentation at a recent CCi OpEx Leader Insights Webinar (read the key insights here), the session opened up to questions from more than 200 registered attendees. In this Q&A, David shares the operational excellence leadership insights from FrieslandCampina’s journey.
Operational Excellence Leadership in Practice
Q: You have rolled out across 48 manufacturing sites and are now extending into supply chain. What is the difference between rolling out in manufacturing and moving into the supply chain?
David Cutter: Probably the most difficult thing at first was working out what to focus on. In a factory, you have a clear loss and waste framework. In supply chain, you have to think differently and redefine what good looks like. We started looking at how many times we deliver to customers on time, how many factory changeovers we are causing through planning decisions, how often material shortages force us to change plans. We picked three or four specific focus areas and that made it much more granular.
What we are finding now is that the link from supply chain to the factory to logistics is becoming stronger and stronger. The standards do not change. Recognition is still important. The tier structure stays the same. But the application of it becomes much more focused.
And honestly, I think there is more opportunity in supply chain than in manufacturing. If you think end-to-end, from customer back through planning and logistics and into suppliers, there is huge potential. If a truck brings packaging in, it should leave full of product. If you can change minimum order quantities, drive reliability, and make the warehouse more flow-through by linking it to the cluster, those things have a massive impact on the end-to-end organization.
Q: Once manufacturing operations were streamlined, what issues did you encounter on the supply chain side?
David Cutter: We specifically said at first we want to drive OEE. That’s the core. If we can get OEE up and waste down, build a stable operation, then we have an opportunity from a supply chain perspective to do things differently.
We are looking at increasing changeovers in the next couple of years, we’re driving cash harder, and working back further into suppliers and customers. We are a reasonably complex business, but we deliberately simplified through planning first. Now we are reintroducing that complexity from a position of strength.
Q: Which TRACCs did you launch, and how did you prioritize them?
David Cutter: We launched around five or six. We focused on teamwork, leadership, and 5S. Asset care has probably been the biggest for us. If you can get good at asset care, you build the foundation for everything else. Safety is on that list too, along with focused improvement and visual management.
We do not drive toward improving a TRACC Maturity score for its own sake. We pick the areas that really matter, do them really well, and then consider what to add next. The core TRACCs are what move the needle.
Q: You mentioned the inverted pyramid and servant leadership. Where do you see the real value getting unlocked there?
David Cutter: We are primarily helping our operators through coaching. It starts with giving them tools and coaching them to get better at their job. We are now moving into more advanced territory, getting operators to engage directly with original equipment manufacturers (OEMs), building their ownership and involvement at that level.
The moment you know it is working is when operators come to you and say, can you help me here? Or: I have more visibility now than I have ever had before. Or simply: is it not great that people actually care now? That is what you want to hear. Value is created and lost at tier one. The higher the ownership of the equipment by the operator, the more value you can unlock.
Q: When employees ask their leaders for help, how do you ensure the leaders teach the employees how to fish, rather than giving them the fish?
David Cutter: It comes down to providing the tools and coaching people to use them. Five Why, fishbone diagrams, structured problem-solving frameworks. The leader’s job is to work alongside the person, not to take the problem away, fix it, and hand it back. That is the easy path, and it teaches nothing.
Leaders as coaches. That is the principle. It is difficult to get right, but it is so important. When you coach someone through solving a problem rather than solving it for them, you build a capability that stays in the organization.
Q: How have you built internal capability and how do you plan to sustain it, and what role does CCi play in that?
David Cutter: We have the same people we started with, and they are great people. The approach has been straightforward: give them the tools, show them what to do, coach them, provide support, and give them the space to do it. That is genuinely all you have to do.
CCi’s role, particularly in the early days, was to coach us on the methodology. As that has matured, the relationship has evolved. The next stage for us is really driving and sustaining long-term improvement. We are getting much better at standards. We are getting much better at using CCi TRACC. The question now is how we move into more transformational thinking.
Q: What are you most proud of in terms of early wins?
David Cutter: The team. The people at FrieslandCampina who took this on. It is a very different way of doing things, and to walk through the factories and see people who have moved from different roles into running factories, to see the operational excellence team grow, that is what I am most proud of.
What I also value is the opportunity we have created for people to be more creative, more successful, and to put more into their work. When you give someone a standard to operate within, they do not have to spend their energy thinking about the standard itself. They can focus on how to improve it and how to get better. There is a phenomenal level of talent in this organization, and my job is to give those people the tools they need.
Q: What would you describe as the culture shift from 2022 to today?
David Cutter: We were a culture of “deal with your own problems”. Do not stick your head up on performance, just take it step by step. If the commercial team wants something, you do it. You’re not an equal partner, you’re a provider. Every single part of the business operated differently.
The biggest change we drove was saying: there is one way of doing this, and you are actually not that different from anyone else. Ninety percent of what we measure is the same no matter where we do it. Here is a set of tools that will help you improve, and by the way, you are an equal partner. And then the conversations with commercial teams changed. They can no longer launch products every five seconds without understanding the impact. It feels like a much more balanced relationship now.
Q: If you could only implement one improvement initiative, which would you choose?
David Cutter: Problem solving. Get really, really good at problem solving. If you fix problems properly so they do not come back, performance improves naturally. It is not about the relentless pursuit of a number. It is about fixing the things that are holding that number back. Fix the problems, and the performance will follow.
Q: If you were starting again, what would you do differently?
David Cutter: I think we can move faster. Even faster. I believe if you give people the right tools and the right support, you can accelerate more than we did. That is not a criticism of what the team has achieved, because I am incredibly proud of it. But it is how I am wired. I am never fully satisfied, and I think the pace of change could have been higher.
Q: How do you see data and AI fitting into the ‘Our Way of Working’ methodology?
David Cutter: Data is one of those things where you never have enough, but you always have too much. The sources vary significantly across sites, but I do believe we can get the core data we need.
On AI specifically, I will be honest: I am a little cautious about making everything about AI. Machine learning is as important, or more so. We are using machine learning to build predictive algorithms, particularly in maintenance, to understand the life of a machine and anticipate failures before they happen.
We will use AI tools in forecasting and in understanding customer behavior. But when it comes to factory operations, I fundamentally believe machine learning and standards will get us there. And as coaches, it is important that tier one and tier two teams really understand the methodology in the real world before you go too digital. Everything tier one, tier two, and tier three for us is manual. Multi-site is where we go digital.
Progress at Scale
Three years in, the results are hard to argue with. Over €400 million in savings delivered. Material losses down 13% globally. OEE heading toward 80%. Employee engagement up 10%, even as around 700 roles came out of the business.
For David, though, the proudest moment is simpler than any of those numbers: walking through the factories and seeing people grow. The same people who were there at the start, given the right tools and the right support, are running a fundamentally better operation.
For the headline principles behind the program, read our 10 key insights from the webinar. To hear the full conversation, watch the on-demand webinar here.