UT11 JSATTON OF PROnUCrION RPSOI]RCFS 1. Capacity Plan Manufacture capacity will be planned to exceed Marketing forecasts by 10% except where markets are volatile, when a higher provision may be required. Where possible, contract manufacture. which absorbs surplus capacity in other companies, must be considered as an alternative to investment in new capacity. For hygiene reasons, Primary manufacture should not be planned for full three shift operation. 2. Machinety Investment in new machinery must always maintain or improve product quality. New technology will be adopted where product and commercial benerit can be shown. Machinery purchases should be consistent with BATCo and regional machinery standard isation. 3. Production Costt Companies should aim to be the lowest cost producer where competitive markets exist and to achieve cost reductions ofat least 5% per year in real per mille costs (excluding depreciation) on average over the plan period. Production plans to reduce costs should identify:- 3.1 Targets for improving productivity in the direct and indirect areas. Simtegies should include. Flexible Working practices Team Working and "Mini Factories" Reduced Product handling Contracting out services, if financially viable, and with a view to improving the quality ofservice Use ofeffective information systems Machinery investment where justified Reduced layers ofmanagement 3.2 Targets for process and material cost reductions. Strategies should include:- The principles of MRPH Reductions in stock levels, including Finished Goods, WMS and R&RS Rationalisation of'specifications Reductions in energy usage ratios and energy costs Regional Cooperation on stock items Use ofProcurement Dept. to ensure competitive purchasing NJ C-D L-4 c0 CO .10 BAT Industries document for Province of British COIUMbia 23 April 1999 3.3 Targets for improved use of existing resources. Strategies should include:- Machine Efficiency improvement programmes Improvements to material and ctA tobacco quality Comprehensive maintenance and machine cleaning programmes On floor management and supervision Improvements in skills, through local or regional training Reduced machine change over times Disposal ofsurplus assets. 4. Product OnviliV Companies should plan that product quality mftu the expectations ofthe consumer, is superior to that ofcompetition where this exists and that, as a minimum, products meet standards set under relevant legislations. Production plans to improve product quality should show targets for improvements in Product Quality Ratings, performance against competition (where appropriate) and reductions in consumer complaints. Strategies should include:. Moving responsibility for quality to machine operator level Quality training at all levels Quality Performance Reviews at shop floor level Investment in on linequality measurement Off line quality measurement at the point of manufacture Shop floor Quality Audits Quality data analysis Machinery investment where specifically justified Effective Machine maintenance programmes Working with material suppliers to enhance the quality of1heir products and services. 5. fle-Ith and Saf* Companies should aim to eliminate 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 ofaccidents and the time lost through accidents. 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 organisation and regular safety meetings and audits at Company and Departmental level Provision ofsafe systems ofwork Detailed investigation ofall accidents and incidents which could have led to an accident Machinery which is fully guarded and interlocked co -Z~- kA (31, BAT Industries document for Province of British Columbia 23 April 1999 Safe stomCe and use of hazardous substances Effective systems for fire prevention and fire fighting Elimination ofelectrical hazards Meeting all rdevznt legislation Maintaining the highest standards of hygiene in the factory, bvatories, kitchens etc. CD CID 13 AT IndustrieS document for Province of British Columbia 23 April 1999