It is not often we get to speak with a CEO from one of the largest sugar companies in the world - to discuss how reliability affects business outcomes.
But that is exactly what we had the privilege of doing with my Robert H. Buker, Jr., CEO of US Sugar in Clewiston Florida.
Mr. Buker has accepted our invitation to present the Keynote address for Solutions 2.0 being held November 8-11, 2010 in Bonita Springs Florida. His title is designed to amplify the fact that there is no business called "reliability" however it does have a significant impact on business outcomes.
U.S. Sugar’s mission has always been to out-perform its competitors. In 2002, U.S. Sugar was a 70-year-old company with a 70-year-old culture. Two sugar factories (one 70 years old, the other 36 years old) processed sugarcane into non food-grade raw sugar over a 140-day season. The raw sugar produced was protected from foreign competition by high tariffs and was shipped in bulk to food-grade processors for further refining. The company’s 187,000 acres were farmed in ten separate farming units. During the processing season, maintenance was 100% reactive. The 225-day repair season had zero planning. After the annual harvest, both factories were completely disassembled to the last nut and bolt and then re-assembled just prior to the next harvest season. There was no automation, not even any electric analog process measurement other than a few pressure gauges. This business model depended on inexpensive labor, no foreign competition, and seasonal operation. Our domestic competitors were in similar circumstances, but some competitors globally had moved ahead.
The enactment of the North American Free Trade Act (NAFTA), which removed all tariffs on Mexican sugar, gave U.S. Sugar two options--change or die.
The Company’s response was radical cultural change. Ten farms were converted to four; overhead was reduced by 23%; one raw sugar factory was closed, and the other totally torn down, rebuilt and expanded by 55% while continuing full operations on site; a full capacity sugar refinery was added; and the product sold changed from bulk raw sugar to bulk and retail refined sugar. Operations were increased from 140 days to 357 days, and a new ERP software system, SAP was installed, all in six years.
At the heart of this cultural transformation was Reliability Excellence. Personnel were decreased from 2400 to 1500. Pieces of equipment were reduced from 4000 to 2100. This required constant reliability as tolerance for downtime was removed, and there were neither sufficient people nor machines to afford redundancy.
The results to date:
• Low cost sugar producer in the United States
• Lower cost than Mexican sugar producers
• Refining capacity sufficient to process all internal raw sugar and to import 60,000 tons (9%) of Mexican sugar for processing into refined sugar
• 99.5% fueled by renewable biomass energy
• Extremely high customer quality satisfaction
By 2007, US Sugar had completed a dramatic three-year, $500 million transformation of its 75-year old sugar processing operations as part of its company-wide continuous process improvement. The Company now operated the world’s largest fully integrated cane sugar raw milling and refining factory, one of world’s most efficient citrus processing facilities, and the nation’s largest private agricultural/industrial railroads--supported by 187,000 acres of its own sugarcane land and citrus groves. U.S. Sugar’s new business model is based around highly automated processes, maximum utilization of machine and human assets, reliable equipment and low cost of production.
Today Reliability Excellence remains a critical tactic in U.S. Sugar’s mission to out-perform its competitors. This recap will provide a blueprint that may be adopted or adapted by other businesses and organizations.
Invite your key executives to hear this Keynote - and let them know there is a Charity Golf Tournament to raise money for Autism Awareness immediately following the keynote address. This powerful story may go a long way to getting buy in for your reliability journey. 1 Day passes along with full event registration are available online at http://www.maintenanceconference.com/solutions/