Styles 05. Case Study Maintenance Drives Profits at Frito-Lay Frito-Lay, the mul
ID: 420211 • Letter: S
Question
Styles 05. Case Study Maintenance Drives Profits at Frito-Lay Frito-Lay, the multi-billion-dollar subsidiary of food and beverage giant PepsiCo, maintains 36 plants in US. and Canada. These facilities produce dozen of snacks, including the well- known Lay's, Fritos, Cheetos, Doritos, Ruffles, and Tostitos brands each of which sells over $1 billion per year Frito-Lay plants produce in the high-volume, low-variety process model common to commercial baked goods, steel, glass, and beer industries. In this environment, preventive maintenance of equipment takes a major role by avoiding costly downtime. Tom Rao, Vice President for Florida operations, estimates that each 1% of downtime has a negative annual profit impact of$200,000. He is proud of the 1 ½% unschedled dowtime his plant is able to reach-well below the 2% that is considered the "word s" benchmark. This excellent performance is possible because the maintenance department takes an active role in setting the parameters for preventive maintenance. This is done with weekly imput to the production schedule. Maintenance policy impacts energy use as well. The Florida plant's technical manager, Jim Wentzel, states, "By reducing production intenruption, we create an opportunity to bring energy and utility use under control. Equipment maintenance and solid production schedule are keys to utility efficiency. With every production interruption, there is substantial waste As a part of its total productive maintenance (TPAMD program, Frito-Lay empowers employees with what it calls the "Run Right" system. Rum Right teaches employees to "identify and do. This means each shit is responsible for identifying problems and making the necessary corrections, when possible. This is accomplished through (1) a "power walk at the beginning of the shift to ensure that equipment and process settings are performing to standard, 2) shift and post-shift reviews of standards and large whiteboard in the shift office. tens remain on the whiteboard until corected, which is seldom more than a shift or two. and (3) posting of any issues on aExplanation / Answer
Frito-Lay’s Florida plant is establishing a world-class benchmark, with 1½% unscheduled downtime. Total unscheduled downtime is 2½%, but 1% of that is used for production changeovers. With each 1% of downtime having negative profit impact of $200,000, keeping the plant operating is very significant. This is facilitated by a two-section board that has operations issues on one side and maintenance issues on the other side. The manager’s job is to call on maintenance to make the correction and provide an explicit description of the problem. Maintenance soft-ware, as described in the text, may provide the next step of information and control for Frito-Lay’s facility maintenance personnel