Manufacturing News

Tech Flash Vol. 5 No. 1

January 14, 2009
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When it comes to reducing costs, managing growth expectations and needing interoperability among manufacturing locations, the food industry is out in front of other industry segments.

Manufacturers hone their survival skills against increasing costs

Increasing energy costs and coping with them represents a major concern for manufacturers. Of two independent studies, one ranked energy as the primary cost concern and the other ranked energy second to the rising costs of raw materials.

Conducted in the third quarter of 2008, TBM Consulting Group’s sixth annual Multinational Manufacturing Pulse, cited “cost pressures” as the major concern of 1,406 executives from mid-sized to large companies in the US, UK, Germany, France, Mexico and Brazil. The majority of respondents (53%) saw these pressures as the biggest hurdle to success in the year ahead. 33% identified rising energy costs as a source of angst, a dramatic increase from last year’s response of 11%. Quality and people issues continued to be challenges as well.

More than half (55%) of all manufacturers said they felt challenged by the current economic climate. The study revealed that executives are taking measures to keep market share and maintain a competitive edge. Three key areas involved improving quality (46%), shortening lead times (45%) and increasing ways to better connect with customers (38%).

According to an Aberdeen Group study, ERP Plus in Process Industries: Beyond Compliance, 46% of more than 300 process industry respondents said they needed to reduce costs. Seventy-six percent were concerned about the rising costs of materials, 55% with rising energy costs as they affect manufacturing operation costs, 48% with increasing energy costs of inbound and outbound transportation, 30% with the impact of poor quality, 28% with unpredictable energy and commodity costs and 21% with the proliferation of product changeovers.

Among the food industry respondents, 51% said they need to reduce costs; 26% need to improve customer response time; 30% would like to make it easier to do business; 32% need to manage growth expectations; 33% said they have interoperability issues across multiple manufacturing locations; and 10% feel pressure due to regulatory compliance requirements.

The Aberdeen study points to real-world ERP applications that can make a difference. “Before we implemented our new ERP system, there was no real visibility as to when we could expect stock to arrive,” says Barry Cummings, CFO of Langdon Ingredients. “Now, using our system, all staff can see our best estimate of when goods will be available for sale.”

Another reason to implement ERP comes from George Neill, CIO of Organic Valley Family of Farms. “Forward and backward lot traceability enables us to not only comply with regulations, but also to notify our customers of any problems in a timely manner,” says Neill. “We have real-time data on product compliance and traceability that allows us to track our milk, meat and produce from the farm to the store,” adds Neill.

For more on the TBM Consulting study, visit www.tbmcg.com.

For more on the Aberdeen study, visit www.aberdeen.com.


General Mills Innovation Network a year later

Marking the one-year anniversary of its Worldwide Innovation Network (G-WIN), General Mills said the company’s open innovation initiative seeking partnerships with entrepreneurs, inventors, universities and other food companies has produced hundreds of concepts for patented technologies or potential products that could be complementary to its existing brands and businesses.

The concept of applied open innovation has generated a wide spectrum of collaboration opportunities, everything from applying technologies more effectively to partnering more closely with key suppliers to finding potential new partners in entirely different industries. Progresso Light, for example, is one of the innovations resulting from the G-WIN program. Among other ideas, a cross-functional team leveraged research and expertise from across the company to suggest that Progresso develop a light soup that could qualify for 0 POINTS value per serving with Weight Watchers.

In its first year, the G-WIN team received more than 200 concept submissions, and through this open innovation, was able to generate new product introductions. Two important innovation highlights include the development with an exclusive partner of Fiber One Chewy Bars, a snack bar with 9 grams of fiber, and through a partnership with an external company, the creation of Progresso Reduced Sodium soups.


More crops, less environmental damage

Crop production is making substantial improvements in efficiency while incurring a smaller environmental footprint, says a new report from Field to Market, the Keystone Alliance for Sustainable Agriculture. The Environmental Resource Indictors report was released at the annual meeting of the American Farm Bureau Federation.

The report evaluated national-scale metrics over the past 20 years for land, water and energy use; soil loss; and climate impact in corn, soy, cotton and wheat production. In 2007, these crops comprised nearly 70% of the 305 million acres of US cropland.

“Production agriculture has become increasingly efficient, relying on fewer inputs to produce more,” says Alliance member and Director of Conservation Programs for the Central US region of The Nature Conservancy Michael Reuter. “However, we recognize there are significant challenges ahead in meeting increased global demand in a sustainable manner.” Reuter said these metrics will be expanded to define other attributes of sustainable agricultural production and lay the foundation for studies that will analyze additional environmental, socio-economic and health factors.

Progress had been made. The initial index shows that soil-loss efficiency trends have improved substantially by 30% to nearly 70% for the four crops evaluated. Energy use per unit of output is down in corn, soybean and cotton production by nearly 40% to more than 60%, according to the study. Irrigated water use per unit of output has also decreased 20% to nearly 50% while carbon emissions per unit of output have dropped by about a third for these three crops. A next-generation report will assess water quality and biodiversity indicators.

These improvements are especially important when put into the context of global needs for food and fiber. Experts predict demand for agricultural goods will double by 2050 as global population increases by an additional 3 billion people.

For more information, visit http://keystone.org/spp/env-sustain_ag.html.


Chinese promise food safety crackdown

Food experts from Beijing will step up safety inspections in seven provinces before the end of January, says the Chinese Ministry of Health. According to the China Daily, the experts will crack down on non-edible substances and excessive use of additives in food during the busy Lunar New Year holiday food sales period.

The inspection will cover markets, restaurants and additive producers in the provinces, including Hebei, where the melamine-contaminated milk formula scandal began, said Mao Qun’an, a Ministry spokesman. “We will severely punish groups or individuals who violate the law,” he said. “We will also update the public on major cases in the country.”

According to the ministry, the country had screened 22.4 million babies who were fed melamine-tainted formula by the end of December and found that 296,000 were sickened. Hospitals treated 52,898 sick babies nationwide and were able to cure 52,582.

Qun’an also said the government has allocated about $1.46 billion for infectious disease control and new drug research and development.


Features



The greening of manufacturing

Food plants often outlive the people working in them. No wonder more attention is being paid to their sustainability.
FULL STORY


Minimum processes, maximum hurdles

Fresh and nutritious sounds good on paper, but minimally processed foods pose a big challenge to food safety.
FULL STORY


Poultry processors uncover new ways to reduce costs

Market pressures, sustainability and food-borne illness issues are driving industry changes.
FULL STORY


Tech Update: Process control

If you think process control is a closed-loop PID controller or a collection of them, or a PLC running a machine, you need to expand your horizons.
FULL STORY


People, Plant and Industry News

Robert L. Fregolle, Jr., vice president of customer business development for Procter & Gamble Asia, has been named global customer business development officer. Mariano Martin, P&G global customer business development officer, will retire effective June 30, 2009, after 33 years of service.

 

Cargill Meat Solutions Corporation purchased certain assets of Carneco Foods LLC, including a ground beef processing plant in Columbus, NE and 80 acres of land.

 

Unilever completed the previously announced sale of its Bertolli olive oil business to Grupo SOS for a consideration of €630 million.

 

Forbes named Flowers Foods the “best-managed” food company among the 400 best big companies in America. Forbes selected Flowers Foods as the best among the 17 companies in the food, drink and tobacco category that made it onto Forbes’ annual Platinum 400 list.

 

Sunsweet Growers, Inc. and Shoei Foods USA formed a joint processing alliance where Sunsweet will dry, process and pack all Shoei USA prune products.

 

Bay Grove Capital LLC, a specialized principal investment firm based in San Francisco, acquired Seafreeze Cold Storage, a subsidiary of Toyo Suisan Kaisha, Ltd.

 

Dairy company Royal FrieslandCampina sold its production facility Prenzlau to Uckermarker Milch GmbH in Potsdam (Germany). All jobs will be retained and the new employer will adopt all contracts of employment without change.

 

WBF, formerly known as World Batch Forum, has postponed its North American conference for 2009 to a date later in the year. In another announcement, WBF and OMAC cancelled their co-located May 2009 event, Expanding the Horizons of Manufacturing.

 

Corbi Plastics LLC, a manufacturer of reusable plastic dunnage for the food and beverage container industry, named Richard R. Smith as its director of sales.

 

Stellar, a design, engineering, construction and mechanical services firm, hired Michael Ballew, P.E., as a senior mechanical engineer for the company’s Food & Beverage Facility Services division.

 

Jack Sinclair, executive vice president of the grocery division for Walmart Stores Division, was elected to the Food Marketing Institute (FMI) board of directors.

 

Jim Marcum, a seasoned sales executive who recently joined popchips as director of natural channel sales in the eastern US, will help lead the company’s growth east of the Mississippi River.

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