At a Glance
- A publicly listed company in Asia, with business interests in oil palm plantations, contacted Renoir to request a proposal for assistance in planning a nationwide roll-out of a new SOP.
- Renoir consultants recognised an opportunity to develop a new Management Control System to maximise the benefits of the updated daily harvesting process.
- The project yielded a significant improvement in the daily output. This was achieved through an 11% increase in the daily tonnage of fruit harvested at pilot sites, a reduction in the average harvest cycle from 13.5 to 9.7 days, and other improvements.
Background
Palm oil is the most widely consumed edible oil in the world. It is an important ingredient in many food and personal care products, and a feedstock for biofuels. The processed food industry consumes the most palm oil, approximately 72% of total palm oil production, followed by the personal care and cleaning products industry, with 18% and the biofuel industry with the remaining 10%.
Palm oil is a major contributor to the global economy, and also provides millions of downstream jobs for people employed by industries that use palm oil derivatives, animal feed, and personal care products. The majority of palm oil produced for global consumption comes from plantations in Indonesia and Malaysia.
Our client is a publicly listed company in Asia, engaged in oil palm plantations and other businesses.
Project genesis
Our client initially contacted Renoir to request a proposal for assistance in planning a national roll-out of a new Standard Operating Procedure (SOP). During our two-week analysis, we identified an opportunity to develop a new Management Control System (MCS) to optimise the benefits of the updated daily harvesting process.
Analysis
Our analysis revealed gaps in the control and monitoring of the harvesting process. Here’s a summary of the key findings:
- Harvester productivity was highly variable, with a standard deviation of 44%
- About 90% of harvesting rotations were delayed by more than three days, with 28% being delayed by more than 10 days
- Field supervisors were often idle between four and six hours a day, accounting for more than 50% of their time. They rarely accompanied harvesters in the field.
- Trucks delivering fruit to the mill completed their deliveries after 2am – a common occurrent, about 50% of the time
- Reviews were infrequent, often relying on ad-hoc reporting without standard dashboards
This lack of control resulted in high variability in daily production and supply to downstream processes. A common practice to address production gaps would be to purchase fruit externally, resulting in higher costs compared to internally grown and harvested fruit.
Project Approach
We implemented the Renoir Focus Process® to identify the causes of productivity loss on a daily basis. Over a four-week period, we conducted more than 200 full ‘Day in the life of’ (DILO) observations to examine all stages of the process – from harvest to delivery, to the processing mill. Observations included supervisors and field workers.
A cross-functional Management Action Team (MAT) was established to analyse the data collected. The MAT compiled the findings into an opportunity log, which was then consolidated to identify common root causes of productivity issues.
“The most important thing is control. If we have high achievement we can do it by design, not by luck.”
– President Director
Implementation
Under the guidance of Renoir consultants, a 23-week project called ‘Excellent Productivity 2.0’ was launched. This 23-week project is divided into a 10-week Focus Process, and a 13-week implementation period. Renoir consultants also planned coaching sessions to ensure sufficient support as the changes were embedded.
To address the opportunities identified, initiatives were introduced and/or implemented in three key streams:
Harvesting process
Process workshops were organised with plantation staff to address practical field issues. These sessions led to the development of daily harvesting schedules that took into account local conditions. The primary goal was to create actionable plans that were not only theoretically sound but also achievable, facilitating the identification of gaps in plan implementation. The role of field supervisors, a crucial aspect of plan implementation, was addressed in the next stream.
Supervision and monitoring
Supervisors were provided with a Short Interval Control (SIC) reporting system that tracked daily progress. The system had a dual effect: it increased the close monitoring of field workers to improve productivity, and it allowed for the quick identification of problems affecting daily productivity.
In cases where daily progress was lagging behind schedule, workers could be reassigned between teams to fill any manpower gaps and improve plan achievement.
Management Control System
The implementation of a Management Control System (MCS) is at the heart of this project. The system sets up a recurring cycle of reviews, starting with daily reports that track the entire process, from harvest to mill delivery. These reviews look at the root causes of problems and assign actions.
We also provided coaching on Root Cause Analysis and prioritisation of issues. It became clear that using the entire plantation management system to support these reviews was critical to ensuring the continued realisation and sustainability of benefits.
Results
A 11% increase in the daily tonnage of fruit harvested at pilot sites
A reduction in the average harvest cycle from 13.5 days to 9.7 days
A 75% increase in field productive time for field supervisors
Although a significant improvement in daily output was achieved, the key to the company’s ongoing performance lay in the behavioural change at the start of the pilot project. The client expressed their commitment to continue working with Renoir.
*We have intentionally omitted client-specific details to maintain strict confidentiality.
