Cielo e Terra, where wine is LEAN

Becoming more aware of what the customer perceives as product value and, as a consequence, rearranging processes within the company by eliminating inefficiency and waste, is essential to improve value flows. It is a path that is no slogan or marketing strategy: it is rather a need, especially in such a period of economic uncertainty. This type of analysis leads to the improvement of production processes, basically through work reorganization and the enhancement of the existing assets. This is the experience of Cielo e Terra wine-growing and producing company.

The starting point

In 1999 the privately-held Cielo Company, presently a leading supplier of bottled wine in 0.75 liter size, opened its shareholding to Cantina Cooperativa Colli Berici, which has acquired 51% stake.
For the first time in Italy, a privately-held company opened its doors to a wine cooperative: this operation aimed at safeguarding the concept of supply chain and laying the basis for productive unity.
The sound and fast growth and the consequent process complexity, however, began to cause management problems to the company: warehouses and spaces seemed no longer enough, difficulties in filling orders, delays in production. “This situation negatively affected the ultimate goal of our work: the value perceived by customers, i.e. the value of a good product which comes on time on the shelf, with good quality-price ratio” says Luca Cielo, General Manager at Cielo e Terra – Gruppo Cantine Colli Berici.
Looking for a way to change this situation, in 2006 Luca Cielo discovered the lean principles, or LEAN Organization, on the basis of which his company started a path which since 2006 to today has led to very positive results.

Value stream: back up to customers

According to Luca Cielo a new mindset and a different way of working are the two main novelties of the approach he chose: “The goal of the LEAN approach, which applies the Kai Zen method, Japanese for towards improvement, is to increase the product value perceived by customers. Everything is aimed at perfecting the steps of the production processes which increase the value and removing those that do not increase it”.
Efficiency, removal of waste and unnecessary processes. But, while the concepts of the LEAN method do not differ from other methods aiming at improving management efficiency, the true novelty lays in the procedures. Finished products (in this case: wine bottles on the shelf sales) are analyzed in all stages of their creation, but backwards: in this way, the analysis necessarily starts from the final target, the value for customers. Each step from the finished product to its origin – which, in the case of Cielo e Terra, is the transposition of wine tanks from Cantine Colli Berici for bottling – is disrupted until its last element and action, and each of them is analyzed for a potential improvement in view of the value of the final product.

Human potential: a pillar for companies

This procedure – which is scrupulously performed also through the analysis of the processes by means of cameras and post-recovery analysis – is not, however, conducted only by consultants that are external to the company and the work, but mainly by involving the relevant players: those who work every day and know best how the process works.
This is definitely one of the novelties of this method: focus on the internal and already existing company structure, i.e. first and foremost on the people who, regardless of their roles, are the essence of the organization. Involving them to improve their work environment and showing them that their expertise and experience are heard and have value, is definitely an essential part in determining the success of the LEAN approach” says Luca Cielo.
A good theory, but how to engage people? “Initially, this was the biggest challenge: to win skepticism and reluctance showed by some employees. But the results achieved gradually persuaded all of them: a much more clean and orderly work environment, timely problem solving, professional enhancement of  everyone’s skills, and improvement of both  work flows and times, so for example, a decrease in overtime has been recorded. These elements improve the work environment for everyone”.
It is up to the top managers to create a structure which permanently involves people: “We have at least a meeting per week with the different work groups. Throughout the year, we also have cross meetings between operators of the different lines and production levels. We try and create a mentality according to which everyone can make their contribution, give their ratings, and have confrontation and horizontal dialogue. Internal communication is essential and must involve all levels of the organization” says Luca Cielo.

Facts, not words

Albeit starting from Toyota (the LEAN method is also known as Toyota method), the method is also applicable to SMEs and winemaking companies which with the production and size of Toyota have very little in common.
On the other hand, the results of Cielo e Terra are clear: the improvements achieved within 6 years have allowed increasing efficiency by reducing production time by 30% and implementing a reduction in stock levels, while optimizing the use of spaces and rationalizing production according to market demands.
A detail of the results scored thanks to the LEAN approach? “Before the lean approach, the change of tooling in the bottling line from 1.5 liter bottles to 0.75 liter bottles required 90 minutes; it now takes only 30 minutes. We filmed the process, analyzed each step with those who work on the line, found possible changes and improved performance”.
But where should a company start and what advice would you give to wine companies? “Everyone has to identify the company areas which are more critical, i.e. less efficient, which cause the majority of problems. From there, it is necessary to start a detailed analysis of the processes in the light of product and final consumers. This analysis is the starting point for improvement. In our case, we started from the production and storage areas, where it is also easy to assess the results”.

LEAN method for the SMEs of Made in Italy production

Given the very positive feedback in terms of optimization, in 2012 Luca Cielo was given the task by Confindustria (see box) to build up a working group to inform and propose initiatives to promote and support SMEs in the paths of corporate restructuring and recovery productivity through the principles of LEAN Organization.
We will provide the expertise we acquired in order for the project to be a source of inspiration for entrepreneurs who want to give strength to their Made in Italy production” says Luca Cielo. “The challenge is to draw a path on how to build a new model for Italian entrepreneurship and management which do not betray their roots”.

 

The LEAN approach to company management, which is based on the Kai Zen method and also aims at achieving lean manufacturing by reducing waste, is a way of thinking and organizing manufacturing activities in a lean manner, by increasing potential, eliminating inefficiencies, giving value to people, i.e. the true and only competitive factor in the production unit. This approach aims ultimately at increasing the value perceived by end customers, a primary goal of the continuous process improvement.

 

Set up in 1910, Confindustria is the leading organization representing manufacturing and service companies in Italy. It groups, on a voluntary basis, 148,392 companies of all sizes with a total of 5,454,962 operators.

 

by Luisa Doldi

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