Made in Brazil: Smarter, leaner businesses

What can manufacturing steel cylinders teach you about making granola? Quite a bit, it turns out. Employees of a natural foods company in Salvador, Brazil recently completed a month-long transformation program at our newest model factory, Fabrica Modelo Brasil (FMB). This hands-on learning environment teaches the principles of lean manufacturing. Through a series of live scenarios and interactive exercises, the food company employees developed skills such as mapping a work stream, balancing a line, identifying waste, measuring cycle times, and creating relevant performance metrics.

Fabrica modelo Brazil
Fabrica Modelo Brazil is located on SENAI's campus in Salvador, Brazil
Fabrica modelo Brazil

On returning to their own workplace—an industrial bakery—they began to apply these concepts, looking for ways to improve productivity. "The process changes we made included prepping ingredients, such as grating the coconut the day before; reordering the steps in the recipe; standardizing measurements; and using lighter, less-expensive packaging," explains Bruna del Negro, the McKinsey consultant who worked on-site with the group. The employees doubled their production capacity without adding staff.

"Low productivity is the single biggest hindrance to growth in Latin America," says Björn Hagemann, the McKinsey partner who leads the program. This is especially true in the northeastern region of Brazil, which is underprivileged and developing very quickly. As companies come in to set up their first factory or facility in the region, they are often hiring people with limited or no experience. "Field workers can become industrial employees overnight," according to Björn, "and there is a tremendous need for skills."

To build FMB, our first model factory in Latin America, we partnered with SENAI, a major not-for-profit institution that provides formalized industrial training throughout the country. SENAI built the factory on the grounds of its Salvador campus and is focused on programs for micro, small, and medium-size businesses, the engine behind much of Brazil's potential growth. Our team supported the factory design, development of the lean curriculum, and staff training.

The facility allows us to deliver customized training to clients—which are typically large organizations ranging from manufacturers to banks, retailers, government agencies, and more—embarking on major transformation programs. Objectives can range from improving the performance of supplier networks, streamlining core processes, or enhancing the skills of frontline employees.

"It makes a tremendous difference for our clients to be taught by our local experts who understand the idiosyncrasies of Latin American business—and they can do hands-on work in an actual model factory," says Björn. McKinsey then reinforces these newly learned skills with coaching, role modeling, and performance metrics to develop and ingrain new mind-sets and behaviors.

A second pilot program included a professional uniform manufacturer. After spending time at the model factory, employees produced a 30 percent increase in output with no additional resources by realigning the sewing cells on the factory floor and redistributing the work flow per person.

"We want to offer our clients here in Salvador and the rest of northeast Brazil access to the same skills and ways of thinking that we provide to our clients in other parts of the world," says Vijay Gosula, the McKinsey director who founded the Salvador office three years ago. With a focus on hiring and growing local talent, the office is close-knit, young, and enthusiastic—some 15 business analysts are helping build our presence here, serving clients in the retail, consumer goods, infrastructure, and public sectors. "I am from Salvador," says Victor Pinto, a local business analyst, "and proud to be involved in some of the projects that are changing the city for the better."

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