Food Engineering

Are you best-in-class or a laggard?

March 1, 2007

Most studies are based on interviewees’ conjecture and opinion. But a best-in-class benchmark report of food and beverage packaging operations conducted by Informance sampled actual production data from customers’ 141 packaging lines worldwide using the company’s Enterprise Manufacturing Intelligence Suite. The study reveals polar results. For example, best-in-class manufacturers are 22% more productive because they identify manufacturing losses at a rate 45 times greater than laggard processors. Why? Successful manufacturers are able to measure, manage and mitigate the problems that result in capacity loss, quality loss and poor asset utilization.

Manufacturers typically achieve competitive advantage by concentrating on “operational excellence” initiatives, which include Six Sigma, lean manufacturing, total productive maintenance and other continuous improvement approaches. Manufacturers want to unlock capacity, reduce inventory and labor costs while they increase productivity without additional expense.  To meet these goals, processors measure key performance indicators (KPIs).
Packaging lines in the food and beverage industry incur more than 18,000 interruptions of less than ten minutes each per year, an equivalent of seven per hour. Best-in-class manufacturers approach 80% overall equipment effectiveness (OEE) with asset utilization rates as high as 97%. Laggards’ OEE was typically in the 25 to 35% range with asset utilization hovering around 27%. OEE, operational availability and asset utilization were top KPIs used in the study to determine best-in-class lines.
To determine a processor’s competitive position, each KPI from each company was ranked from best to worst score. Organizations in the top 20th percentile were defined best-in-class, the middle 50th percentile as average and the bottom 30th percentile as laggards. Based on best practices from TPM practitioners, the study defines a set of six loss categories for the food and beverage industry. To read the executive summary, visit