Standardisation and continuous improvement help Fonterra to grow


11 July 2011

Recently we talked to Don McVeigh, OE Acceleration Stream Support at Fonterra, about how standardisation helps Fonterra to remain one of the top ten dairy companies in the world. Fonterra is using some materials from our '101 benefits of standardisation' campaign to promote standardisation within the organisation/company. The '101 benefits' campaign shows ways that Standards and standardisation improve our economy, our environment, and our quality of life.

Fonterra operates to multiple standards for the environment, agriculture, health and safety, and quality, which need to be maintained at all levels of the business. 'These standards are critical for health and safety of our people, and for the wellbeing of the people consuming our products,' says McVeigh. 'We have internal teams that focus on the standards we need to maintain. Internal and external auditors measure us against these standards and industry best practice. We also benchmark our performance against external companies around the world.'

'Standards and standardisation offer us the opportunity to grow as a business', says McVeigh. 'If we maintain a reputation of hitting or exceeding our standards, we will be associated with a quality product, gain more customers, and become more competitive.

'Standardisation is a key component of any business – it helps to ensure you are doing things consistently. It provides a way to actively measure performance against standards, identify ways you can improve, and make checks and adjustments, that put your business in a good position for external audits.

'Fonterra has run a continuous improvement programme called 'Operational Excellence' for 11 years. We continually go to the people in our business to understand how they currently do things. We identify, then agree the 'best way' and try to standardise this across our business, where applicable.'

Intrinsic to this programme is the 'Plan, Do, Check, Adjust' cycle, which enables Fonterra to truly understand if their processes are working effectively. McVeigh explains: 'Plan – when we plan a new process we incorporate the relevant standard into that process. Do – we implement the process. Check – we ask, 'is our process enabling us to meet that standard'? We put a measure in place to check that the standard is being met and applied uniformly across the business. Adjust – we make adjustments depending on the performance of the process. We check the change is working and if required, adjust our standard accordingly.'

Fonterra has used Standards New Zealand's '101 benefits' images in workshops to engage staff and prompt discussion about how Fonterra can gain value out of standardisation within its own processes. 'Standardising how we work means we get a better understanding of how we do things,' says McVeigh. 'This reduces staff confusion and frustration from using different processes.

'We appreciate the opportunity to be involved in the standards network and I encourage other businesses to be involved – driving this continuous improvement mindset will lead to a better and more productive New Zealand.'

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The question is not what you gain from standardisation, it's what you lose without it.