Operational excellence transformation in a global agrifood processor

In a highly competitive global agrifood market, operational efficiency is no longer optional — it is a strategic imperative. For large-scale almond processors operating with seasonal variability, energy-intensive processes, and significant labor requirements, even small inefficiencies can translate into substantial financial impact.

This case study presents the transformation journey of a major vertically integrated almond producer and processor in Australia. Facing rising manufacturing costs, low equipment effectiveness, high utilities spend, and productivity challenges across seasonal operations, the company launched a structured Operational Excellence (OE) program to protect margins and strengthen competitiveness.

The company and its position in the global agrifood industry

The company is a vertically integrated almond producer and processor operating large-scale irrigated orchards and a primary hulling and shelling facility in regional Australia. It exports the majority of its production to international markets and is recognized as one of the largest almond processors in the Southern Hemisphere.

The company’s vision is clear:

“To become the most differentiated and valuable global food and agri-business by the year 2040.”

As production volumes increased and global competition intensified, improving margins through operational excellence became a strategic priority aligned with the company’s broader operational excellence framework.

Key operational challenges limiting performance

A diagnostic review revealed several structural inefficiencies across the plant’s value stream:

1. Low OEE and high downtime

The hulling and shelling plant experienced significant breakdowns and micro-stoppages, particularly in the inshell bagging area. Downtime, dryer inefficiencies, and spare parts management gaps reduced overall equipment effectiveness

In short, low OEE was driven by micro‑stoppages, breakdowns, and unstable machine settings, as high downtime was in critical equipment, especially bagging and drying.

2. Labor inefficiencies and lack of standardization

Several operational areas lacked standardized work, including:

• Sampling hut.
• Dryers.
• Weighbridge.
• Tarp crew.
• Forklift operations.

Seasonality and variability in casual labor further increased inefficiencies, driving up labor costs and limiting productivity.

3. Excessive utilities spend

Utilities spending had increased year-over-year (+4% in 2019 vs. 2018), with a plant power factor of just 85%, resulting in approximately $250k/year in reactive power charges. Additional issues included:

• No metering of high-power draw assets.
• Inefficient lighting systems.
• Equipment left running while idle.
• No structured fuel efficiency management.

Figure 1 – Excessive use of utilities

The organization needed a structured transformation program to reduce costs without compromising quality, safety, or export compliance.

These issues contributed to a high manufacturing budget, reduced throughput, and increased rework and waste.

The operational excellence transformation approach

The transformation was structured around Value Stream Analysis (VSA), Kaizen workshops, and disciplined implementation planning.

The roadmap focused on three major levers:

1. OEE improvement (Kobetsu Kaizen).
2. Labor productivity through standard work.
3. Utilities optimization through data-driven root cause analysis.

OEE improvement through Kobetsu Kaizen

Kobetsu Kaizen is a focused improvement methodology dedicated to the structured resolution of equipment-related performance issues, such as recurring failures, speed losses, long setups, or quality defects.

This approach is based on rigorous data analysis, root cause identification, and the implementation of tested, sustainable solutions. Its core objective is to eliminate waste and improve Overall Equipment Effectiveness (OEE).

A focused improvement initiative targeted major downtime losses in the hulling and shelling plant. Key actions included:

• Structured root cause problem solving on inshell bagger breakdowns.
• Reduction of micro-stoppages (sewing and labeling issues).
• Improved dryer performance and throughput.
• Autonomous maintenance training for operators.
• Performance dashboards and daily KPI tracking.

These initiatives were supported by a structured A3 methodology and frontline engagement.

Labor productivity through standard work

A detailed work observation and task analysis was conducted across critical operational roles.

Standard Work was implemented in:

• Sampling hut (improved grading consistency and reduced variability).
• Dryers (task optimization and throughput increase).
• Weighbridge (task standardization and FTE optimization).
• Tarp crew (clarified responsibilities and reduced redundancy).

In parallel, structured problem-solving reduced rework and variability in quality inspections. Together with workforce balancing and task redesign, productivity increased significantly without compromising safety or compliance.

Utilities optimization through structured energy management

A comprehensive utilities analysis identified high-impact cost reduction opportunities. Key initiatives implemented:

Power Factor Correction (PFC)

• Improved average power factor from 85% to 98%.
• Delivered $235k benefit.

Automatic lateral motor shut-off

• Reduced lateral motor consumption by 110 kWh.
• Benefit: $26k.

LED lighting with automatic shut-off

• Reduced lighting consumption by 142 kWh .

Asset metering & monitoring

• Visibility of high-energy assets.
• Integration into daily Gemba walk checks.

Total utilities spend reduced from $2.28M to $2M, generating a total benefit of $280k.

Measurable operational and financial impact

The program delivered significant operational and financial impact within the first cycle:

Financial and operational outcomes

• 10% reduction in total manufacturing budget (direct + indirect costs).
• Annualized savings of over $1.5M, achieved with zero CAPEX.
• OEE improved by 7%, driven by reduced downtime and stabilized bagging performance.
• Labor productivity increased by 40%, supported by standard work and optimized staffing.
• Utilities consumption reduced by 6%, lowering both electricity and fuel spend.
• Quality consistency improved, reducing rework and sampling variability.
• Maintenance spend reduced, with better control of spare parts and contract labor.

Figure 2 – Summary of the results achieved

In addition, implementation adherence exceeded 100% at the program level, reinforcing disciplined execution.

These results strengthened the facility’s cost competitiveness, increased throughput capacity, and created a foundation for continuous improvement across future seasons.

Cultural transformation and sustainability

Beyond financial gains, the transformation strengthened:

• Performance management routines.
• Daily operational reviews.
• KPI dashboards aligned to critical performance metrics.
• Root cause problem-solving capabilities.
• Cross-functional collaboration.

Figure 3 – Visual boards for performance monitoring and problem solving

The focus shifted from reactive firefighting to structured elimination of losses, embedding continuous improvement into daily operations.

Next steps: Sustaining results and scaling operational excellence

Following the results achieved, the focus shifts from implementation to consolidation and scale-up. The next phase centers on three priorities:

1. Sustain and deepen efficiency gains
Reinforce daily performance monitoring, strengthen cost control discipline, and expand visibility over critical operational and energy drivers to ensure that improvements are sustained over time.

2. Complete and stabilize the improvement roadmap
Finalize remaining actions identified during the diagnostic phase, embed standard practices across all key operational areas, and ensure that productivity and OEE gains remain stable throughout seasonal fluctuations.

3. Increase organizational maturity
Advance the operational excellence model by reinforcing structured problem-solving, leadership routines, and cross-functional alignment. The objective is to move from isolated improvements to a fully integrated performance culture.

By maintaining governance discipline and continuously eliminating operational losses, the organization is positioned not only to protect margins, but to build long-term operational resilience and competitiveness.

Conclusion: Operational excellence as a driver of competitiveness

This transformation demonstrates how a structured operational excellence program, anchored in the Kaizen methodology, standard work, and data-driven problem solving, can unlock substantial value in a seasonal, high-volume agricultural processing environment.

By focusing on equipment reliability, labor efficiency, utilities optimization, and performance management, the facility achieved meaningful cost reductions and built long-term operational resilience.

We respect our clients’ confidentiality agreements. While names have been changed or omitted, the results are real.