Dave Hogg, director of business development at Ross Systems, looks at how food manufacturers can achieve substantial cost savings through clever use of new technology.
It seems there is no let up in the raft of new technologies to hit the manufacturing sector. Acronym hell in the shape of ERP II, MRP, EPM, APS, BI, CRM, VOIP, XP, SQL, AIM, APQP and BPM (to name but a few), means that its easy to understand why many manufacturers might switch off to the latest announcement of version 7.9 of company Xs product.
It is true that many new technologies are a case of technology for technologies sake and often they demand hefty investment for little return. However if deployed in the right way, some new technologies hold the key to unlocking the major cost savings and efficiencies needed for manufacturers to inflate squeezed margins, maintain a competitive edge, comply with legislation and ensure profitability.
The challenge lies in understanding which technologies can deliver genuine benefit and which should be left to the glossy marketing brochures.
One example of a technology which is delivering major benefit across a number of industry sectors is mobile computing. Although mobile computing has inevitably been caught up in media hype, it has proved beyond doubt that it has the propensity to deliver substantial return on investment. Within food manufacturers it can create major impacts in three key areas: live stock, production efficiency and brand protection through traceability.
Mobile computing as an enabler to real-time data capture
The capture and feedback of real-time data is fundamental to achieving the visibility and dynamic control needed in todays fast moving food industry. Data capture can of course be achieved without the use of mobile computing. However in a rugged manufacturing environment the only way to genuinely capture and feedback data in real-time is to implement wireless devices in the production plant itself.
Currently many manufacturers record data on paper which is then entered into a computer-based system, sometimes several days after the event. Clearly this approach is not real time, is error prone and is destined to result in manufacturers falling short of meeting ever-stringent customer and regulatory demands.
Currently a lack of knowledge of their live stock position is costing manufacturers hundreds of thousands of pounds each year in stock errors (including mis-matched packaging and labelling), missed shipments, poor customer service and out of shelf life product.
Through implementing handheld devices in the warehouse where operatives can capture live data and issue feedback in real-time, a live stock position can be established. This clear visibility of current inventory means that manufacturers can gain competitive edge through minimising costs, improving service and responding quickly to fluctuating customer demand.
On the production line
The production line is another source of inefficiencies which can be improved substantially through the use of mobile devices in capturing and feeding back real-time data.
According to the six sigma model, OEE (overall equipment effectiveness) factors which contribute to the maximisation of efficiency in the production process include:
- Utilising production equipment for the maximum time available. For example a dormant production line in a sector where demand outstrips supply inevitably comes with a hefty price tag.
- Maximising quality ratios is an area where efficiencies can be greatly improved. This can be calculated by the quantity of premium grade material produced, divided by total production. For example in the production of a fruit salad, there is huge scope for unnecessary wastage to escalate if not monitored.
- Measuring the rate of production against the capacity of a machine to produce is fundamental to ensure that productivity is as high as it can be. So, if significant investment has been made in a machine which can process both meat and vegetarian products, the return on its investment will be diminished if the machine only ever manufactures salads.
In order to properly measure the effectiveness of the production line and improve efficiencies against these criteria, data must be captured and used as it happens, requiring the use of mobile applications at the coal face of production. Only through assessing these factors in real-time on the production line can improvements be made.
Brand protection and traceability
January 2005 saw the introduction of the EU General Food Law Regulation (178 / 2002) which states that manufacturers must be able to recall a product, if required, on demand. The high profile Sudan-1 food scare case followed in February 2005 and fuelled already heightened public awareness surrounding food safety. These factors combined mean that food manufacturers cannot afford to take any chances in the way in which products recalls are anticipated and managed if they are to preserve their brand reputation.
A truly on demand response to a recall can only be invoked if data on a products development has been recorded in real-time, requiring a mobile device.
So with this evidence set out on the table, what is stopping food companies from investing in mobile technology to improve the availability and use of data?
Cost, culture and chaos
Cost, culture and chaos (in the sense of disparate systems) summarise the key barriers to implementing such a strategy.
Although the case for return on investment (ROI) on a mobile computing implementation is clear, any investment must be weighted against other business priorities. If a broken machine needs to be replaced, this is likely to take precedence over an IT-related investment.
Secondly, the right foundations, in the form of a good ERP system, must be in place in order for a mobile strategy to work. If integration is impossible then the project is likely to escalate and become prohibitive from a cost perspective at least in the short term.
However the main barriers tend to be cultural. Often the fear of something new, or the perception that a new way of working might compromise the freedom of the production manager, can take their toll in preventing such a solution. Resistance from users also creates challenges; so instilling an IT-centric culture where buy-in is sought from users at an early stage is key to ensuring that the project is a success.
Theres no question that making the shift to implementing a mobile manufacturing strategy is a significant step change for many manufacturers. However the hundreds of thousands of pounds worth of efficiency savings delivered as a result of such a strategy would seem to be a fitting reward. Sooner or later such a strategy will become compulsory in order to comply with legislation, maintain a competitive edge and ultimately, protect brand reputation so those who steal a march now will be best placed to prosper in the future.
Dave Hogg is director of business development at Ross Systems. He has extensive knowledge of ERP and supply chain applications having worked for Viewlocity, Xerox and Fujitsu. David also built fundamental manufacturing industry knowledge working for Land Rover as an industrial engineer for 11 years.
Focused on the food and beverage, life sciences, chemicals, metals and natural products industries and implemented by more than 1,200 customer companies worldwide, the company's family of Internet-architected solutions is a comprehensive, modular suite that spans the enterprise, from manufacturing, financials and supply chain management to customer relationship management, performance management and regulatory compliance.