Production
Increased:
When the herbal tea brand had to more than double production, Traditional Medicinals turned to Sensei On Demand to scale the business.
Stockists Grew From
20,000 to:
70,000+
Sales Increased from $20 Million to:
$120 Million
Cost Savings
Exceeded:
$500,000
Background:
In 2016, Traditional Medicinals faced an enviable problem: they had to double production. The herbal tea producer, predominantly serving health food stores, now was looking to expand into mass-market retailers like Safeway, Target, Walmart, and Amazon. With the demand tsunami coming, the leadership team turned to Sensei On Demand to improve efficiencies in the production process to meet new business goals.
Traditional Medicinals developed a plan and budget for building a brand-new production area that was essential to get the most out of this critical investment. Sensei On Demand, was enlisted to design a new production process using Lean principles.
“This is an amazing experience for a Continuous Improvement enthusiast, having a blank canvas to start from allowed us to build in critical success principles from the beginning of this growth.”
- Jennifer RalstonCEO of Sensei On Demand
The Challenge:
At the core of the business were production inefficiencies that would need to be resolved to scale output. Sensei On Demand teamed with Traditional Medicinals, empowering the multi-lingual team to design their new production area. Sensei On Demand and the team began by asking everyone for input. What did they dislike about the current layout? How could the process be improved? The team then looked at each work area as a unit and observed how it ran. What was causing inefficiencies? What did the team need? How can we bring in Visual Management and Error Proofing as we increase production?
KEY CHALLENGES
Driving sustainability required the difficult task of segregating trash and separating out several types of recyclables.
Mechanics voiced that misplaced tools slowed down production.
The sanitization process in packaging took 4 to 6 hours, and during this time, production workers were idle.
The Solution:
Sensei On Demand facilitated Kaizens for each area of production. By addressing these opportunities for growth, the team helped provide quick wins for improving working conditions, and created buy-in from employees. The staff employed 5S Principles (Sort, Set in Order, Shine, Standardize, Sustain) to create and maintain an organized, clean, and safe work environment. These 5S Principles mandated that there be “a place for everything and everything in its place.” This helped to ensure that what was needed for the job was readily available, provided early awareness if work supplies were missing or incorrect, and eliminated wasted time searching for parts or materials.
The results were dramatic and production soared. Traditional Medicinals realized a savings of half a million dollars, and production increased from 9,000 cases per day to roughly 25,000, with the same quality standards. Best of all, Traditional Medicinals was able to grow at a 20% rate without the need to hire additional staff. All because of Sensei On Demand.
Employing these principles improved efficiencies throughout the process. The production area was redesigned to better facilitate sorting for sustainability goals. To better organize tools, the team brainstormed ideas and came up with a location and a storage pegboard with outlines to show where each tool was to be housed. Finally, when tackling the sanitation task, the team decided that, rather than spending time cleaning the packaging equipment, the mechanic shop could have clean equipment ready to bring in for the changeover, reducing time from 6 hours to less than 45 minutes.
”During the first quarter the new production line was in operation, the Overall Operational Effectiveness (OOE) increased from 20% to well over 60%.
- Traditional Medicinals
The Future:
The entire Traditional Medicinals team is now on board using Lean techniques for continuous improvement. The company has a Lean production line which is scalable and well positioned for growth. The factory now runs 24 hours a day and produced over 600,000,000 bags of tea in 2019! It is just one of many success stories for this tea company, and they hope to share many more.
