Dive Brief:
- Manufacturers can take a data-driven analytical approach to operations to identify opportunities to boost ROI and their bottom line.
- By analyzing production line data, manufacturers can spot instances of overfill and adjust filling processes to reduce lost ingredients and materials. Or they can determine whether they can reduce the use of certain high-cost ingredients, such as concentrate or syrup in beverages.
- Analyzing production processes for risks of mislabeling products, failing to meet regulatory compliance, or using defective or non-conforming bottles can also cut down on costly glitches in the system. Otherwise, those glitches could slow or cease production or result in brand-damaging product recalls.
Dive Insight:
Preventing recalls is a less tangible and quantifiable way to boost ROI, but that doesn't make it any less critical to profitability. According to a 2015 report, more than half of the recalls reported between 2002 and 2015 cost a company more than $10 million, with some companies reporting more than $100 million in direct costs from the recall.
Mislabeling can be more than just a scenario where ingredients, packaging materials, and delivery costs are wasted — it can also be a serious safety issue. If a product that contains common allergens isn't labeled as such due to a malfunctioning during processing, the manufacturer could be at the center of a costly consumer health crisis. Mars quickly enacted a recall of Dove chocolates late last year when a consumer found a Snickers piece in the Dove packaging (Snickers contains peanuts, a common allergen).
A thorough analysis of a plant's operations can achieve two ends simultaneously. Manufacturers already need to be collecting data and assessing processes for potential safety risks and providing documentation per the new FSMA requirements. At the same time, manufacturers can be using that data to determine ways to optimize their processes to boost ROI along the way.