CASE STUDY: REDUCING WASTE ON CHICKEN NUGGET LINE

By Jennifer Kinneberg

Kahiki Foods, a family-run Asian foods manufacturer with about 200 employees in Gahanna, Ohio,
USA, had an excessive amount of waste on their chicken nugget product line; their average daily
waste was 9.72 percent. That waste correlates to a loss in raw materials of $601,170 annually. By
redesigning the waste tracking system, identifying root causes and then implementing prioritized
solution elements, the business predicts an annual savings of $178,042 and a 24-percent decrease in
the daily waste percentage.
The complete case study is available for purchase on the iSixSigma Marketplace.
Define
Kahiki Foods had extreme amounts of daily waste on their chicken nugget lines. The daily amount
of waste on the line averaged 4,976 pounds (for two production lines running two shifts) – more
than Kahiki’s two other major product lines combined. The initial project goal was to create a 50-
percent reduction in the primary metric of daily waste percentage.
The project was scoped to encompass the beginning of processing (at the Carruthers machine, a
chicken dicer) through to the end of palletizing. Waste was defined to include all food materials
collected in red inedible bins, machines and on the floor, and to exclude packaging material. The
members of the core team included a process improvement engineer, line leads and production
managers, as well as employees from R&D, finance and scheduling. A kick-off meeting was held
with the core team, in which members used multivoting to identify where they believed the most
waste was being created and where the most opportunity for improvement existed. This information
was used to help focus attention when observing the process, while also promoting a better
understanding of the process.
The team created a SIPOC (suppliers, input, process, output, customers) map as a visual
representation of the value stream, and identified the material input and output at each machine in
the process. From this, the types of waste being created at points throughout the line could be
identified, along with the cost of these types of waste per pound.
 Figure 1: Define

Measure
The goal of the Measure phase in this project was to determine what data would need to be collected
to understand the current state and the impact that potential Xs had on the Y (daily waste
percentage). The team developed a measurement plan after considering the following questions:
• Which metrics need to be tracked?
• Were the metrics already being captured?
• If not, what measurement method should be used for data capture and who would own the
information?
The three primary metrics for this project were:
1. The daily waste percentage,
2. The amount of waste being created in zoned areas on the line, and
3. The composition of waste in these areas.
The daily waste percentage was a metric already calculated by Kahiki and tracked on their KPI (key
performance indicator) dashboard. The daily waste percentage was calculated by dividing the total
amount of waste for the nugget line (pounds) by the total amount produced on the bagger (pounds).
The existing waste tracking system divided the line into five areas and recorded the waste for those
five zones (Figure 1). The team realized that to better understand where the greatest opportunities
for improvement existed, more granularity was needed in the waste tracking system. The updated
system divided the line into 14 areas based on what type of waste was being created within those
zones. The division of areas is shown in the floor layout diagram in Figure 2. The daily waste
tracking forms were updated to depict the changes in waste collection areas; the sanitation staff
would record the time of collection and amount of waste under the appropriate column.
To distinguish among the zones, a letter was assigned to each area and painted on the floor in the
relevant area, labeled trashcans were placed in each section, and the corresponding letter was added
to the column headers of the waste tracking forms. It was important to assign a symbol – in this
case, a letter – to each updated area because the majority of the sanitation staff and operators did not
speak English. The sanitation staff was trained on the updated system and the system was
implemented on February 8, 2012.
The third key metric for this project was the composition of waste in certain waste tracking areas; it
was unknown how much usable product was being lost at these points. The waste composition study
was needed to determine the associated loss in capital for each area. The areas to be included in the
waste composition study were:
• Batter applicators: percent of batter versus percent of chicken
• Fryers: percent of tempura nuggets versus percent of crumb and grit
• Freezer entrances: percent of tempura nuggets versus percent of crumb and grit
The study was set up so that 20 data points would be captured – 10 for each line. The study
collected data from both shifts and ran for two months, from February 16 to April 16.
In addition to these other steps in the Measure phase, the team created a run chart from which they
determined that the average daily waste percentage on the line was 9.72. An I-MR chart showed the
process to be out of control. With the additional information gathered to date, a process capability
study was performed that showed 83.65 percent of days had a daily waste percentage out of spec.
The Cpk was calculated to be -0.34, indicating that the center of the process far exceeded the desired
center. Its value of less than 1 meant that the variability of the process was greater than the size of
the desired range.

Figure 2: Measure
Analyze
During the Analyze phase, the monitoring of the average amount of daily waste created at each of
the 14 areas was based on the updated waste tracking system. A cost was linked to each area based
on the waste composition study and cost of the type of lost material. The results can be seen in
Figure 1.
Next, the core team held meetings to discuss each area in order of importance – based on associated
loss in capital – and determine the root causes for waste creation. In these meetings, team members
analyzed each waste area using the 5 Whys. After the meetings, statistical tests were used to either
confirm or reject the proposed root causes, including one-way analyses of variance (ANOVA),
correlation analyses and two-sample t-tests. The final root causes identified by waste area are shown
on Figure 1.

Figure 1: Analyze

Improve
The core team generated ideas for eliminating waste from each area of the chicken nugget
production line based on the identified root causes. With the help of the project’s Champion,
potential savings were calculated for each solution element along with a corresponding difficulty of
implementation. Based on potential savings and difficulty level, four solution elements were
approved to move to the pilot stage.

Initially, the solution elements regarding packaging (bagger to palletizing) were to 1) provide
standard placements for rework and 2) add a check to be completed by the bagger operator every 30
minutes to ensure that rework bins had been emptied and were not overflowing. From these two
changes alone, however, no significant shift was seen in the waste created. Based on this result – in
addition to line observations and line knowledge – it was determined that the culture of keeping the
line running at any cost had a larger role in the amount of waste created than initially thought. To
create daily awareness among operators about their performance against the company’s goals,
printouts of the previous day’s performance were discussed at daily shift meetings.
After piloting the idea to sift flour from the drum breader, the team determined that this idea
required more operator attention than the savings warranted. An alternative solution, a sieve added
to the end of the shaker table, was implemented; this new solution element was tested with
successful results.
Two additional solution elements – a system for capturing lost nuggets on the z-conveyer and a cart
to capture waste at the Line 2 freezer entrance – had successful pilots and required no changes.
The expected results from all the solution elements are a 24-percent reduction in daily waste
percentage, to 7.39 percent, and a yearly savings of $178,042.

Figure 2: Improve

Control
Control elements were created to ensure the continuation of all solution elements. Daily checklists
were either created or updated to confirm that the solution elements were being used daily; standard
operating procedures (SOPs) were updated to show the changes in the process; and the practice of
generating daily printouts of shift performance was implemented. All control elements for each
improvement area are shown in Figure 5.
In addition to control elements, a project transition and sign-off document was created to ensure the
full completion of all solution elements. The items left to be completed are also shown in Figure 3.
The complete case study is available for purchase on the iSixSigma Marketplace.
In order to continue tracking the line’s performance, the daily waste percentage will continue to be
tracked in the KPI dashboard and the updated waste tracking system will continue to be followed.

Figure 3: Control