It’s been said that the creation of alcoholic beverages is an artform, but there is a lot of science that is required to produce alcoholic beverages of all forms, whether brewing beer, fermenting wine, or distilling spirits with significantly higher alcohol contents. Whatever the brew, it needs to maintain its unique flavour, every time.
Before Toyota was developing Lean or Motorola was developing Six Sigma, in the early 20th century the Guinness brewing company in Dublin, Ireland was investing in scientists and mathematicians as they sought to find methods to ensure consistency in their beer to match rapidly accelerating popularity and output. One of their employees, William Gosset, developed breakthrough methodologies that overcame the roadblock of small datasets—such as barley, malt, or hops in beer—through the development of the T-test, which compares the averages of small sample sizes to make accurate estimates about the larger population. His quality control methods quickly spread across breweries and were crucial to the foundation of variance analysis, hypothesis testing, and efficient design of experiments—all key aspects embraced by Lean Six Sigma. This and other lean techniques evolved to the point of becoming a ‘must requirement’ for companies within the alcoholic drinks industry that wish to remain competitive.
What is Lean?
The lean methodology was developed with the ultimate goal of reducing costs and increasing efficiency by identifying and eliminating activities in a given process (service or manufacturing) that fail to add value and yet consume resources. In the lean terminology, value is defined as ‘what the customer is willing to pay’. As a result, lean is heavily oriented not only to efficiency and cost reduction but also to creating value to ensure customer satisfaction.
On the other hand, Six Sigma is a system developed with the goal of controlling variation and making processes more consistent and reliable to ensure the quality of deliverables. The combination of Lean with Six Sigma results in a faster creation of value at the lowest possible cost.
Lean/Continuous Improvement within the Alcoholic Sector
As stated, the major operational challenge of many breweries and distilleries is consistency in the final product due to challenges throughout the complex processes, as well as natural variation existing in organic ingredients such as sugar content, which can affect final alcohol concentration. The ability to ensure consistency is essential, especially regarding alcohol content and all aspects of taste. Final recipes depend upon consistency in ingredients throughout each stage of the various brewing, fermenting, or distilling processes. However, it’s not just the final spirit being produced but also across all areas of the process flow, from material collection to bottling and corking operations to transportation—all of which can contain inefficiencies that are costing companies money.
Lean offers the potential to reduce time for production, maximize the use of production capacity, minimize waste, reduce energy and water use, and enhance sustainability.
After identifying relevant key performance indicators (KPIs), lean teams can establish the baseline currently achieved in comparison to realistic targets. Then, lean offers strategies to develop a plan that leads from the baseline toward the target. KPIs that are a focus of continuous improvement in the alcoholic industry can be grouped into four areas:
Regarding productivity for distillers, one of the most common KPIs is proof gallons per labour hour; design of experiment tools exist to help adjust recipes or heating and cooling cycles to maximize output and save time without sacrificing quality. Production lines can also monitor metrics such as defects per million opportunities to evaluate efficiency and further refine processes. Costs per unit produced is another KPI that can help identify potential aspects of the process flow that have excess waste: for example, water usage is a major cost of the distilling process, and at a threshold rate there are more efficient alternatives.
As another example, when brewing beer, hurdles need to be overcome regarding stabilization and minimizing the likelihood that haze-forming proteins will fail to be removed from beer. It is difficult to predict effective cold stabilization due to variations inherent to the process, leading to high costs and extract losses. Following lean principles can lead to the substitution of cold stabilization with enzyme-based technology to achieve beer stabilization, thereby eliminating multiple steps in the process such that energy costs can be reduced by up to 6%, while reducing brewing time and increasing capacity.
Across all industries, inventory and the movement of materials or products are sources of waste with plenty of potential for improvements. The production of alcoholic beverages is no exception, especially when sales cycles could be affected by the season and are not necessarily synchronized with brewing times. Lean techniques such as 5S organization (sort, straighten, shine, standardize, and sustain) can help efficiently organize materials to decrease errors and save time.
In addition to this, setting up a statistical process control system (SPC) is of paramount importance to determine process capability, and indicators such as Cp and Cpk or Pp and Ppk. This powerful tool will be extremely instrumental for determining further process improvements, the Sigma Score of your process, the defects to be expected and, as a consequence of this, the financial benefits that you can expect to achieve when improving that process. Undoubtedly, this type of improvement in your process will also deliver higher rates of customer satisfaction. During our consulting practice we have observed a wide range of examples of critical to quality (CTQ) variables within the alcoholic drinks industry that needed to be monitored in a process capability analysis. Some of the most common examples include alcohol or sugar concentrations as well as many other chemicals or properties that depend on the type of drink being produced. However, there are further statistical tools that have successfully delivered significant benefits to operations within the alcoholic drink industry, such as correlation analysis, regression, statistical predictions, or hypothesis testing.
Lean Six Sigma Implementation & Training
At AMSaxum we help our clients with the implementation of process improvement projects and provide onsite corporate training on lean six sigma/continuous improvement methodologies. There are government grants available in Canada and the USA to help cover the cost of corporate training.
Government Funding & Assistance Options
In addition to the tangible benefits possible through lean, the research and development efforts (labour, materials and subcontracts) required in the alcoholic beverage sector could be eligible to be recovered through government funding, such as through the Scientific Research & Experimental Development (SR&ED) program in Canada.
For companies in North America, specifically, there could be applicable grants to aid in upfront costs such as capital investment and employee training. AMSaxum experts in government funding help with the application of these grants and with the preparation of SR&ED claims.
There are additional tools that can aid in improving overall efficiency, such as an RCCA labor tracking solution we offer, which is an application for collecting data or for tracking labor or KPI efficiency.
For more information on continuous improvement and Government funding within the brewing or distilling sectors call AMSaxum at 905-315-6847 or contact us here.