Like any resource-constrained industry facing uncertain demands and external competition, the food industry is under constant pressure to reduce operating expenses, shorten lead times, improve flexibility and increase throughput. Designing new facilities or expanding existing ones is an expensive undertaking and is often ranked low on a list of options for companies. The mantra these days is to “do more with less” (or at least do more with the same).
In other words: Get more throughput from a facility with fewer resources and reduced operating expenses. Oftentimes, this means reducing investment in R&D, technology and marketing, but that shouldn’t be the first option.
Reducing operating expenses by addressing inventory, lead times, headcount, spatial needs and/or improving resource-sharing capabilities, etc. is the rational line of thought. Reducing operating expenses does not mean compromising product quality and human safety. Savings can be achieved by improving operational inefficiencies and eliminating non-value added activities in the value streams. Small investments in operations improvement, continuous improvement and teams of industrial engineers may be necessary. The benefits achieved by these teams pay for much more than the investments made in them.
When considering some of the tools and techniques to improve operational efficiencies and quantify/prioritize improvement options, it is important to understand the operational nature of the food industry. This industry can be characterized as a high-mix, high-volume industry. The high mix in upstream operations, such as raw material kitting/cleaning, blending, processing/cooking and filling, can be attributed to the variety of ingredients and flavors, unique recipes and different levels of concentrations needed to make products. In the downstream operations (primary and/or secondary packaging), the high mix can be ascribed to several aspects, such as different container or package selections (bottles, cans, packs, blisters, pouches, etc.), container or package shapes and sizes, labeling requirements and pallet size configurations, just to name a few.
It is well known that a high-mix environment can create several inefficiencies: inconsistency in product routing, need for dedicated/specialized equipment and an increased number of setups and changeovers, etc. It also increases variability in processing times and may result in longer lead times.
On the other hand, the high-volume manufacturing environment may necessitate the need for increased pieces of equipment, which leads to larger space requirements, increased needs for material handling, additional personnel and overall infrastructure improvements.
Additionally, depending on the type of product manufactured/packaged and the investment capability of the facility, the processes can be manual or automated. Other commonly seen attributes that can increase lead times include unplanned equipment downtime, yield issues and material stock outs, among other issues.
All the aforementioned factors, exacerbated by the uncertain and highly variable demands, impact the overall efficiency and operating expenses and subsequently, profitability for the company.
Many food and nutraceutical companies are now realizing that they can leverage and benefit from the cost-saving techniques and models used by the automotive and semiconductor industries. These industries have leveraged Industrial Engineering tools and have pioneered lean techniques and Six Sigma methodologies, having used them extensively to eliminate non-value added activities and variability within their operations.
To read about real-life case studies that demonstrate how the application of these tools and techniques have increased packaging line efficiencies and improved the design of operations and facilities to accommodate growth, click here.