BATCo document for Province of British Columbia 23
April 1999
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1995 KEY ARrA PAPFR: UTIT ISATION OF PRODUCrION
RESOURCEq
1. C2vacitv Plan
M&mL&cmring 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 mwitets are
particularly volatile and spare capacity
elsewhere in BAT cannot be used due to sourcing or
import restrictions.
Where possible, contract rr-h-c wbich absorbs
surplus capacity in other BAT
companies, must be considered as an alternative to
investroem in new capacity or where
there Me OVer2lI cost benefits.
For hygiene reasons, Primary should not be planned
fbr fidl 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 fbrmat being
developed at Southampton plant and should include
procedures to:-
Assess then minimise risk.
Manage the disaster and minimise its effect on
personnel and property.
Establish alternative production sources in the
event the disaster could produce
interruptions to market supply.
Restore production capability.
I M2chinerv
Itivestroent in new machinery must always maintain
or imp. ov productquality.
New technology wM be adopted where product and
commercial benefit can be shown.
Machinery purchases should be consistent with
BATCo and regional machinery
scami-rdisation.
Machinery u"Tisarion should be maxima including
the use ofmulti-shift working when
this is cost effective.
3. Production Costs
Companies should aim to be the loweg-cost producer
where competitive markets exist to
achieve cost reductions of at [cast 5% per year in
real per mMe costs (occluding
depreciation) on average over the plan period.
Competitor production performance and capability
should be specifically reviewed on a
regular basis with particular reficrence to their
production strategy and production cost
SWUM=.
Production departments should provide Marketing
with information on each product
mamda=red which reffects the true costs ofthe
different cigarette and pack
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BATCO CONFIDENTIAL - CATEGORY 1: NIINNESOTA
TOBACCO LITIGATION.
BATCo document for Province of British Columbia 23
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specffications, production volumes etc. A costing
model which allows allocation of fixed
and variable productions costs to bmn& is being
developed at Southampton.
Production plans to reduce costs should idemify:-
3.1 Targets for improving productivity in the
direct and in~ area . Strategies
should include:-
- Flexible Working practicm
- Team Working and 'Mini F=orics*.
. Reduced Product handling.
- Contracting out services, iffinancially viable,
and with a view to.
improving the quality ofservice.
- Use of effective information system.
- Machinery hwe=ncnt where justified.
. Reduced layers ofmanagement.
M=u to erisure a healthy IR environment.
3.2. Targets for process and material cost
reductions. St:rategies should include:-
- The principles ofMRP1L
- Reductions in stock levels, including Finished
Goo4 WMS and R&RS.
- Rationalisation of specificatioriL
- Reductions in energy usage ratios and energy
costs-
. Regional Cooperation on stock item&
- Use of Procurement Dept. to en=e competitive
purchasin&
3.3 Targets fbrimproved use ofatisting resourtes.
Strategies should include:-
- Machine Efficiency i-,,,o-ent programmes.
- Improvements to material and cut toba= quality.
- Comprehensive and machine clearing programmes.
- On-floor man, ement and supervision.
- Improvements in skills, through local or
regional training.
- Reduced machine change-over times.
- Disposal of surplus a&---t&
4. Pmduct Ouslity
Companies should plan that product quality meets
the c9ectations ofthe consumer, is
superior to that of competition where this cdsts
and that, as aproducts meet
standards set under relevant legislations.
Production plans to improve product quality should
show targeu fbr improvements in
Product Quality Ratings, performance against
competition (where appropriate) and
reductions in consumer complaints. Strategies
include:-
Moving responsibility for quality to machine
operator level.
Quality training at all levels. V1
Quafity Performance Audits and Reviews at
shop-floor level.
Compliance with QC Protocols and Q Methods.
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BATCO CONFIDENTIAL - CATEGORY 1: MINNESOTA TOBACCO
LITIGATION.
BATCo document for Province of BritiSh Columbia 23
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Investment in on-line quality mewurement.
Off-line quality measurement at the point of
mm-A,",re.
Quality data and complaints analysis.
Quality systems and procedures which are
consistent with the principles of iso
9000.
- Machirmy inves:tment where specifically
justified-
- Effective Machine mainter=ce progranmes.
- Woridng with material suppliers to nihan the
quality of their products and
services-
. Reducing the cost of quality by ernphasising
prevention of defects rather
detection. tl- their
TTe2lth and Safetv
Companies should aim to eliminate all accidents
and risks to health to personnel on BAT
premi-
Production plans to improve Health and Safety
should show strategies for reducing the
miraber of accidents and the time lost through
accidents and for improvements in hygiene.
Strategies should include:-
Compliw= with BAT safety requirements as expressed
in BAT Safety Manuals
and Guidelines.
Ensuing that co ors are carefiWy selected and
superv~ed and are obliged to
adhere to BAT standards of safety.
Compli;ance by visitors with BAT nfiny standards.
General and job specific saflay umining for aA
employees.
An effective safety orpnisation and regular safety
meetings and audits at Company
and Department level.
Promotion of the safety message through specific
campaigns and programmes such
as *Safety Week'.
Provision of sale systems of work.
Detailed irrvestisation 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 sub ces.
- Effective systems fbr fire prevention and fire
fighting at all k=Wons, including
remote warehouses and depots.
. Elimination of electrical hazards.
- Meeting all relevant legislation.
- Maint;iining the highest standards of hygiene in
the factory, lavatories, Idtchens
etc., including regular Hygiene Audits.
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BATCO CONFIDENTIAL CATEGORY 1:,NIINNESOTA TOBACCO
LITIGATION.
BATCo document for Province of BritiSh Columbia 23
April 1999