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Tight margins along with competitive price pressure, shrinking brand loyalty, and increasing costs to meet regulatory compliance constraints, are impacting business efficiency of every food manufacturer.

Quality expenditures continue to increase and the only option to battle these trends is to reduced fixed costs and lower Cost-of-Goods Sold (COGS.)

In the packaging area, where the speed of complex machine changeovers are substantial in the profitability and quality of a production run, food manufacturing line workers are not encouraged to measure effectiveness; quality and profitability suffer accordingly.

With an average payback of less than two months, Plantnode by Canadian-based Shoplogix, gathers information from diverse plantfloor equipment and makes it meaningful in the following ways:

- Real-time job-costing variances
- Material usage
- Process Monitoring for quality
- Management of Set-up times to enhance quality production
- Machine maintenance to increase quality output
- Critical alarming (when quality targets fall short)

Plantnode is a hybrid web-based software application designed to an open platform to integrate with existing production equipment, analyze real-time performance, and evaluate machine productivity.

Built-in intelligence goes beyond raw data collection to provide a fully integrated production and quality performance management application.  The quality component for food manufacturers is the ability to differentiate and compare real-time data against planned estimates.  These discrepancies allow for the lean manufacturing quantification of what is and is not working in the quality methodologies established by a food manufacturer.

Overall Equipment Effectiveness

Overall Equipment Effectiveness (OEE) is critical in quality control among food manufacturers.  Machine level visibility with automatic escalations and interactive processes drives a higher level of operational efficiency and quality in the sector.

OEE is also a method to find out the overall effectiveness of equipment and is obtained by the multiplication of three ratios.

Availability Ratio:  Time for which equipment was available for production divided by the total calendar period for which OEE is being calculated.

Quality Ratio:  Quality of Prime Grade material produced divided by total production.

Performance Ratio:  Rate of Production divided by the capacity of the machine to produce.

According to Hellen Budaya-Pileski Communications Manager with Shoplogix, "Most food manufacturers believe they are operating at ninety percent of efficiency levels according to traditional methods of measurement using operator collected data.  When changing to a world class metric of productivity like OEE, food manufacturers discover that they are operating at only fifty percent of operating efficiency.  Exposing the plant team to the three components of OEE, quality, performance, and availability, they become able to focus on the most critical issues that produce real benefits for the company."

Beyond OEE

In addition to compliance concerns such as FDA rulings, USDA inspections, and The Bioterrorism Act of 2002; many companies within the food and beverage industry struggle due to lack of system integration and poor visibility of major business functions. Executives do not want to simply manage their business, they want to lead and direct the future of their company. Today’s executives need real-time sophisticated tools to make educated decisions.

According to Rebecca Gill, vice-president of Technology Group International, “Traceability is paramount to a food and beverage manufacturer. A lean supply chain is critical to a successful operation. American companies spend well over a trillion dollars per year on supply chain related activities, including the movement, storage, and control of products across the supply chain. The food industry is inherent with low margins, so the ability to reduce operational costs really equates to the difference between a profitable company and one that is bankrupt.”

Whether viewing inventory levels or reviewing today’s production capacity, quality integrated food enterprise resource planning (ERP) software allows users to do so quickly maintaining high quality standards. Advanced decision support systems and business planning models using linear programming take the average food executive’s day to the next level by placing all relevant business data at their fingertips – this high degree of operational visibility transforms the quality control and quality assurance processes.

Gill suggests, “It doesn’t matter if you have one plant center or multiple manufacturing and distribution centers, the data is available to optimize your supply chain to minimize costs and maximize your profits.”

Author Biography:

Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based TR Cutler, Inc., the largest manufacturing marketing firm worldwide –www.trcutlerinc.com Cutler is the founder of the Manufacturing Media Consortium of twenty seven hundred journalists and editors writing about trends in manufacturing. Cutler is also the author of the Manufacturers’ Public Relations and Media Guide. Cutler is a frequently published author within the manufacturing sector with more than 300 feature articles authored annually; he can be contacted at trcutler@trcutlerinc.com

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