September 1, 2004
Nestlé Waters’ Hollis, Maine, plant is its flagship facility, producing its Poland Spring product, and serving as the model against which all new Nestlé plants are built. The Hollis plant, which opened in 2000, is not far from Nestlé’s original Poland Spring plant, but starting from scratch allowed the facility to be constructed with the principles of low-cost, high-performance production in mind. The plant is vertically integrated, manufacturing its own PET preforms and bottles, and features a manufacturing layout designed to flow seamlessly from bottle production to loading docks.
“Our new plants are all laid out the same way to maximize the efficiency of what we are doing. They flow from raw material to finished product, and out of the plant,” says Kim Jeffery, chief executive officer of Nestlé Waters North America.
The plant measures half a million square feet and is highly automated, producing about 900 million PET bottles and 65 million cases of finished product per year with about 200 employees. It features seven bottling lines that run retail-sized single-serve and bulk packages. The Hollis plant does not bottle product for home and office delivery.
PET preforms manufactured at the plant are used in Hollis and shipped to other locations that do not make their own prefoms. In 2004, the company expects to produce close to 1 billion bottles and 1.5 billion preforms, at a rate of 7,500 to 55,000 per hour, per machine, depending on seasonal fluctuations.
Eight blowmolders serve the plant’s seven filling lines, with four machines dedicated to the most popular half-liter size. The plant can produce as many as 30,000 PET bottles per hour, per machine in 8-ounce, 12-ounce, half-liter, 24-ounce, 1-liter, 1.5-liter and 1-gallon sizes.
Fast, but flexible
Most of the water bottled in Hollis goes into the PET bottles it produces, but the company also features some HDPE packaging. Filling speeds vary, depending on the size of the package, from 90 bottles per minute for the 2.5-gallon HDPE size to more than 1,000 per minute for the half-liter PET size.
Water that has been filtered and gone through UV treatment is filled in a positive-pressure enclosure for further protection. Several inspection machines placed along the bottling line check for things such as fill levels and cap placement. In addition, the plant’s quality control team continuously performs its own set of tests while the lines run. The plant’s QA/QC lab operates seven days a week, testing water samples from the source through filtration and bottling. It also retains samples from every product run.
As often as possible, Nestlé Waters tries to have bottling lines dedicated to specific sizes and packages, but according to David Burns, director, northeast supply chain, the plant has become adept at integrating new packages with its standard sizes while not compromising its high-speed processes.
“We continually have new SKUs,” he says. “We’ve added a two 12-pack [package] on the 24-ounce line, two 12-packs on the half-liter line, and we’re reducing material by taking out the tray on some of the cases.”
One of the company’s newest packages is the 12-ounce refrigerator Spring Pack, and it often produces special bonus packages such as 15- or 28-packs.
Getting to market
Another strength of the plant is its warehouse management. “Logistics has been a real focus of ours,” Burns says. “It’s so critical for our business; the cost of shipping is a big component in our cost structure.”
While the plant has a 240,000-square-foot warehouse, with a capacity of nearly 1 million cases, its goal is to move product from the palletizer straight to the loading dock whenever possible. When product is stored in the warehouse, it is arranged with the fastest-moving products closest to the shipping docks. On average, the plant ships 160 loads per day, with more than 200 on peak days.
“In order to do this, you need to make sure you’re making [the product] right the first time, every time,” Jeffery says. “We feel very confident with the systems we have in place.”
Unlike many of its competitors, Nestlé Waters does not use direct store delivery, but ships product to customers’ warehouses and distribution centers. The Hollis plant uses only third-party carriers to ship product, and Burns says about 90 percent of its distribution is done through direct shipping rather than using a third, intermediate warehouse.
“A lot of things have driven this,” he says. “If we have the right product mix, we don’t have to take it someplace else, bring it back here and ship it out. It’s about having the right inventory and changeover flexibility. It’s a lot cheaper to changeover these lines quickly — have that pit-stop mentality of changing them over and getting the products we need.”
According to Jeffery, it also requires big thinking among Nestlé Waters employees. “It cannot work if the company is not culturally aligned, with a goal that’s bigger than the individuals or their specific jobs,” he says. The company puts a premium on finding the right employees, and Jeffery says the selection begins right when a new plant opens.
“Our manufacturing assets are all fairly new, and we can build a plant with no baggage,” he says. “We have the pick of the litter as far as employees. We know what we expect from people, and as a result, we have one of the most progressive workforces in the beverage industry in the United States because it’s all new and it’s all using best practices.”
As part of one of the largest food companies in the world, Nestlé Waters has access to a variety of measurement tools and performance meters that help it determine best-in-class practices. The company is constantly measuring itself against its performance goals.
Continuous Improvement Manager Val Lovelace says, “It’s all about taking apart what we do really well today and making sure we can do it even better tomorrow. One of the things about Hollis, which is an outstanding facility, is that that’s not enough. How do we keep it that way five years from now?”
Jeffery adds, “We’re working to get better every day and measure ourselves against key performance indicators in every aspect of the business. The way we do this is through developing people.”
One of the ways it develops people is to put decision-making into the hands of employees. Nestlé Waters plants, including Hollis, use self-directed work teams, and employees are encouraged to meet daily to evaluate production and discuss changes.
Stepping it up
Employee input also has been a key component of Nestlé Waters’ environmental program in Hollis. Tamara Risser, regional safety and environmental manager, leads the environmental effort, which often includes working with the state of Maine and other companies in the area, in addition to implementing environmentally conscious programs at the plant.
The company participates in Maine’s Step-Up program, which Risser says, “stresses environmental sustainability and working with other businesses to help each other out. One of the things they stress is pursuing those things that make sense from an environmental stability standpoint as well as a business standpoint.”
Many ideas, including recycling programs and the use of an onsite sanitary wetland to treat wastewater, have come from employees, some of whom have been recognized by the state’s governor for their contributions.
“It must be the Yankee frugality,” says Risser. “It’s easy to get great ideas out of people.”
The wetland project, Risser says, will pay off in less than two years. “It means we’ll no longer be contributing to nitrogen loading in coastal waters because we’ll be treating [the water] onsite, it saves greenhouse gasses by not tankering it away, and it saves money.”
Through the Step-Up program, the company committed to reducing energy use at the plant by 10 percent in three years, and succeeded in reducing it by 15 percent. It similarly committed to reducing solid waste by 10 percent, and is on track to reach more than 40 percent in 2004.
“There is the perception of big companies — that they’re wasteful, that they’re polluters,” says Jeffery. “One of our commitments everywhere we have a plant is to be a good neighbor or a good citizen in the states where we do business.” BI