According to ARC Advisory Group Principal Analyst John Blanchard, “The new requirements for business systems to collaborate with supply chain partners like mass merchandisers are driving major changes in the way food manufacturing plants will have to respond.” Power has shifted to the cost to quality conscious mass merchandiser and the consumers who are demanding increased quality, variety, and convenience. Shelf replenishment has become the responsibility of the manufacturer. “As a result,” Blanchard says, “sales forecasting has become less reliable as an indicator of what plants will actually need to produce.”
Any factors that diminish the accuracy of sales forecast will have a direct impact on manufacturing operations. Food plant managers, who thrive on long, stabilized production runs, will have greater challenges as changes in production schedules are increasingly driven by changes in demand from important customers. Plant control systems will need to be more responsive and able to facilitate quick product changeovers as variation in demand coming from the market impacts plant capacity constraints. The power of mass merchandisers will force the industry to change the way food plants are run. With continuing consolidation, fewer and fewer plants are required to produce an increasing variety of more complex products.
The production plan that comes from the business system will be driven by constant change from mass merchandisers. The plant production schedule will be optimized if it shows long, continuous runs. How well food plant managers deal with this discontinuity, the better the results for the manufacturers and retailers. Dealing with this challenge is a critical issue for both plant management and IT. The business systems in a food company are based on optimizing business transactions — essentially production schedules, orders, and transportation to optimize the cash position of the company. The manufacturing systems are based on optimizing the response that the plant can make to the demand that is put on it. When the business systems produce production plans that are based on sales forecasts subject to variation, the burden is placed on the plant to respond in a more flexible manner. According to Blanchard, “We are moving to a point where there is an increasing contention between the transaction based scheduling capacity targets of the business system and the real time capacity constrained systems that are found in food plants. This has created a demand for more flexible plant control systems.”
One company that has addressed its business planning systems is La Fabril, C. por A., a new Latin American refiner and distributor of edible vegetable oils based in Santiago, Dominican Republic. The company needed an enterprise solution to help it handle its automated process operations. La Fabril wanted a solution that would reflect its physical operations in the plant step by step, allowing it to control every production stage and view information on the efficiency, productivity, material variations, quality characteristics, and cumulated cost of the manufacturing process. Bernardo Espinola, general manager of La Fabril selected Protean from Invensys. According to Espinola, the process market as a whole is extremely unpredictable and is susceptible to external influences, such as the climate, which can cause price fluctuations. “In addition,” Espinola says, “ we are facing a slowdown in the Dominican economy and a very unstable oil price market. Protean can provide us with the tools to help us react flexibly and quickly to these changing market conditions and optimize every business advantage across the supply chain.”
Rich Products, Buffalo, NY, has also focused on improvements in its business planning systems. Based on its requirements to integrate and accelerate its product lifecycle management (PLM) process, Rich Products selected Formation Systems’ Optiva platform to support research and development, testing, formula management, labeling, and other business-critical departments. As a result, Rich Products has strengthened its product quality process and streamlined its compliance function due to the reduction of data errors across R&D departments. Specifically, Rich Products has eliminated 60 percent of the work associated with reviewing product data for accuracy. The tighter integration among the R&D functions has enabled the processor to reduce the product introduction time by approximately 20 percent.
Mott’s Inc., a subsidiary of London-based Cadbury Schweppes, has taken a similar tact with Accolade portfolio management software from Sopheon. Accolade has enabled Mott’s to reduce the cost and risk of innovation by supporting effective decision-making and helping the company focus resources and attention on its most commercially promising product ideas. It has allowed Mott’s to track and manage multiple projects within a single data source, customize portfolio views, and utilize best practice performance metrics to help executives make informed, strategic resource allocation and project selection decisions.
In order to achieve greater forecast accuracy, Otis Spunkmeyer, the San Leandro, CA, cookie maker, selected Demantra, a provider of consumer demand-driven supply chain solutions, to replace its less effective system of using spreadsheets for planning. Demantra’s Demand Management solution provides a collaborative environment that allows all departments greater visibility into the supply chain, enabling Otis Spunkmeyer to optimize inventory levels by analyzing historical trends and patterns down to the SKU level. As a result, Spunkmeyer has improved forecast accuracy by 25 percent and increased inventory turns from 13.7 per year to 15.5 per year.
Other companies have looked to software vendors to improve their plant response to market variation. Gerber Foods’ Costa Rica plant was also looking for a business transaction system to meet the challenges of its stringent product costing requirements, quality control procedures, multi-currency and language needs and inventory management capability. The processor chose a Ceecom ERP solution that monitors product movement between warehouses and manages shelf life, lot tracking and recall capability once the product is in the supply chain.
Kellogg’s, the Battle Creek, MI, cereal maker is using OSISoft’s PI System to provide accurate indication of whether or not a plant system is running properly in real-time, as well as a valuable history of process performance and progress. According to a Kellogg’s process capability manager, “What gets measured, gets improved. By documenting and implementing best practices at our plants, we are able to improve the quality and consistency of our production lines.” Using the PI System helps personnel spend less time gathering data, and more time analyzing it for process stability and capability.
Maritex, a subsidiary of the Danish company Aarhus Olie AS, has been working on manufacturing responsiveness and selected PlantWeb® digital plant architecture DeltaV from Emerson Process Management to automate a fish processing facility in Sortland, located in Vesterålen, Norway, north of the Arctic Circle. Maritex selected PlantWeb architecture for the control of a new process, including an evaporator. “Continuous changes are taking place all the time in our process equipment,” said Maritex Plant Manager Viktor Johnsen. “For that reason, it is important that we can quickly adapt the process system to them. The DeltaV system is easy to use. At the same time, PlantWeb architecture is capable of handling everything from monitoring of the tank farm to advanced process control,” remarked Johnsen. “These advantages continue to be important to us. At the time of the installation, we did not have a process automation department at Maritex. Since then, we have configured a second evaporator on our own.”
It took a disaster to transform the manufacturing facilities of Alsace Lait, the French dairy, into one of the world’s most modern dairy processing plants. In 2000, a major fire destroyed a large portion of the plant that produces quality dairy products. Starting from scratch enabled Alsace Lait to resume production of fresh milk products within two months and to build an entirely new process plant using the latest PC-based production systems and equipment.
This challenge was met with products from Invensys. New APV Systems piping, tanks and equipment were installed to resume production and packaging. FactorySuite™ from Wonderware Software provided a manufacturing execution system (MES) that uses InTrack™ tracking software and IndustrialSQL Server™ database. “The new system allows us to centralize all data on one PC and provides access to all site sensors as well as to programs that are installed on this PC,” said Dab Domingue, technical operator for Alsace Lait. “It is possible to have access from any PC on the system and InTouch is easy to work with.”
A challenging future
Food companies have to determine if the issues that keep them from being successful emanate from their business systems or their manufacturing systems. In either case, the software solution, like that installed by Alsace Lait, is increasingly focused on PC technology using Ethernet standards. The change from proprietary technical solutions to PC standards is having an impact on the way manufacturing systems are supported.
Historically, IT department supported the business solutions and had the support staff of database administrators and programmer analysts with the skills to deal with network and data storage/retrieval issues. Manufacturing systems tended to be custom, isolated, and not interfaced to the business systems. Traditionally, operations staff, engineers and plant technicians have supported the manufacturing systems, but today’s PC- based commercial software for plants along with soft PLC components is looking more like the business solution from a technical perspective
As companies work to optimize the responsiveness of the plant with the new manufacturing systems, they are finding a need for a new plant IT skill set to deal with the emerging PC and networking standards found in plant software.
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