Silver Lake Foods Limited
Silver Lake Foods is now a medium size organization manufacturing a variety of confectionery products e.g.
biscuits, toffees, bubble gums, chocolates, candies etc, under the brand name KIM. Established in 1995 as a
SME, the organization was conceptualized by a food scientist, namely Mr. Qadir Mehmood. Chocolate and
candies were introduced in the product line in 1998, while instant drinks under the brand name of U-Sip were
introduced in 2002. The company operates its factory in Hattar Industrial Estate, located at a distance of about
50 kms from the main capital, Islamabad. It complies to quality standards of ISO 14000, ISO 9001/2000 and
HACCP food safety requirements. It is currently exporting its products to 25 different countries, mainly in the
west e.g. USA, UK, Australia, Canada, Sri Lanka and Afghanistan.
The year 2002 posed major challenges to the operations of the company. A number of biscuit factories in Hattar
failed in their businesses and closed down. A prime reason was the end of sales tax exemption period, which
increased the cost of production by 15%. However, the financial crunch increased substantially when sugar
crises occurred in the country and the price of sugar increased from PKR 10 to PKR 38 per kg, more than 300%
increase. At Silver Lake, the daily utilization of this basic raw material was 8-9 tons, which led to a massive
increase in the cost of production. A major challenge for the company thus became reducing its costs of
operations, enhancing sales volumes and improving the overall productivity of the organization.
Productivity Improvement Plan
In July 2005, at a time when contemporaries were closing down their factories due to high cost of production
thus rendering the business unprofitable, Mr. Mehmood embarked upon a productivity improvement plan to
reduce the organization
s cost of production. With the assistance of his Quality Assurance Manager, namely,
Mr. Ishtiaq Hussain Kiani,
quality parameters were set with a two-fold target: wastage reduction and
productivity enhancement. The targets were translated into department-wise, machine-wise, process-wise, shift-
wise and variety-wise. A productivity implementation plan was put in place.
In the first couple of months of the plan, results were not very encouraging. After few months, Mr. Mehmood,