1994 KFY A RFA: UTrT ISATION OF PRODUCrION
RFIOURCrq
1. Canacirv Pl;-n
.Manufacturing capacity should be planned to meet
Marketing forecasts including
seasonal and other fluctuations. Additional
capacity should only be planned in nominated
key operating companies or when markets are
particularly volatfle and spare capacity
elsewhere in BAT cannot be used due to sourcing or
import restrictions.
Where possible, contract manufacture, which
absorbs surplus capacity in other
BAT compardes, must be considered as an
alternative to investment in new capacity or
where there are overall cost benefits.
For hygiene reasons. Primary manufacture should
not be planned for full three shift
operation.
Contingency plans should be made to respond to a
disaster at a production site or
warehouse or at a key supplier. Plans should be
consistent with the format being
developed at Southampton plant and should include
procedures to:-
Assess then minim se risk
Manage the disaster and miaimise its effect on
personnel and property
EstabiLsh altermative production sources in the
event the disaster could produce
Lnterruptioas to market supply
Restore production capabdity.
2. Machinerv
Inves=em in new machinery must always maintain or
improve product quality.
New tachnology wdl be adopted where product and
mmmercial benefit can be
shown.
M,achinery purchases should be consistent with
BATCo and regional machinery
standard isatio n.
Machinery utilisatioa should be maximised,
including the use of multi shift
working where this is cost effective.
3. Production CoeU
Companies should aim to be the lowest cost
producer where competitive markets
exist and to 3r-bieve mst reductions of at least
5% per year in real per mille costs
(excluding depreciation) on average over the plan
period.
Competitor production performance and capabdity
should be specifically reviewed
on 3 regular basis with particular reference to
their production strategy and production cost
structure.
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Production departrnents shoWd provide Marketing
with information on each
product manufactured which reflects the true costs
of the diffiereat cigarette and pack
specifications, production volumes etc. A costing
model which allows allocation of fixed
and variable production costs to brands is being
developed at Southampton.
Production plans to reduce costs should identify:-
3.1 Targets for improving productivity in the
direct and indirect areas.
Strategies should include.
Flexible Working practices
Team Working and *MW Factories'
Reduced Product handling
Contracting out services, if finaricially viable,
and with a view to
improving the quality of smice
Use of effective information systems
Machinery investrnent where justified
Reduced layers of management
3.2 Targets for process and material cost
reductions.
SZtegie:s should include:-
'Me priociples of \SPU
Reductions in stock levels, including Finished
G~~WVS and R&RS
Rational isation of specifications
Reductions in energy usage ratios and energy costs
Regional Cooperation on stock items
Use of Procurement Dept. to ensure competitive
purchasing
3.3 Targets for improved use of existing
resources.
Strategies should include:-
Machine Efficiency improvement programmes
lmprovements to material and cut tobacco quality
Comprehensive maintenance and machine cleaning
programmes
On floor management and supervision
Improvements in skills, through local or regional
traLaing
Reduced macbine change over times
Disposal of surplus assets.
4. Product Oulitv
Companies should plan that product quality meets
the expectations of the consumer,
is superior to that of competition where this
exists and that, as a minimum, products meet
standards set under relevant legislations.
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Production plans to improve product quality should
show targets for improvements
in Product Quality Ratings, performance against
competition (where appropriate) and
reductions in consumer complai=. Strategies should
include:-
Moving responsibility for quality to machine
operator level
Quality training at all levels
Quality Performance Audits and Reviews at shop
floor level
Compliance with QC Protocols and Q Methods
Investment in on line quality measurement
Off line quality measurement at the point of
manufacture
Quality data and complaints analysis
Quality systems and procedures which are
consistent with the principles of
1509000
Machinery investment where specificafly justified
Effective Machine maintenance programmes
Working with material suppliers to enhance the
quality of their products and
;ervices.
5. Health =d Safety
Companies should aim to elornina e all accidents
and risks to health to personnel on
BAT premises.
Production plans to improve Health and Safety
should show strategies for reducing
the number of accidents and the time lost through
accidents and for improvements in
hygiene. Strategies should include:-
Compliance with BAT safety requirements as
expressed in BAT Safety Manuals
and Guidelines
Ensuring that contractors are carefully selected
and supervised and are obliged to
adhere to BAT standards of safety
Compliance by visitors with BAT safety standards
General and job specific safety training for all
employees
An effective safety orgaaisatioa and regular
safety meetings and audits at Company
and Departmental level
Promotion of the safety message tbrougb specific
campaigns and programmes such
as 'Safety Week"
Provision of safe systems of work
Detailed investigation of all accidents and
incidents which could have led to an
accident
Machinery which is fully guarded and interlocked
Safe storage and use of hazardous substances
Effective systems for fire prevention and fire
fighting at all locations, including
remote warehouses and depots
Elimination of electrical hazards
Meeting all relevant legislation
Maintaining the highest standards of hygiene in
the factory, lavatories, kitchens
etc., including regular Hy.giene Audits
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BATCo document for Province of BritiSh Columbia 23
April 1999