Intelligence is power, and processors require actionable, well-rounded intelligence to remain profitable.

Installed at a soft drink bottling company in Idaho, Wonderware’s Historian provides reports and trending tools that enable cross-functional teams to analyze plant operations consistently. Source: Wonderware.

You know how to bake cookies, make a good brew,  or create nutritious yogurt. But how well do you know your market? How much product should you make this month, next month or for the holiday season? How much product can you afford to have tied up in cold storage, moving in the supply chain or sitting on the grocer’s shelf? Will you be able to get ingredients when you need them and at the right price?

If you don’t have the right manufacturing intelligence, you’re lost in today’s market where energy costs matter, throw-aways hurt and recalls kill. The right software solution can help.

Based on Microsoft Windows 7 technology and operating free of any Web browser, this Factory Widget shows four KPIs: availability, quality, performance and OEE. Source: APEX Software.

Insight into energy usage

“Software can accomplish two things - either provide insight or transparency to information so the (processor) can make an informed decision, or actually use that information and take action for improvements regardless of application (energy savings, water management, utilities, etc.),” says Matt Chang, Hench Controls’ vice president of sales and marketing. An intelligent system knows when to adopt certain strategies in cooling the product and its environment to keep the product safe while not over-chilling, and the system must also monitor off-peak and demand charges to keep chilling costs low.

Applying energy-savings principles doesn’t stop in the chiller or with a particular heat exchanger.

“Bridging across systems and organizations to deliver true energy management is the key to achieving lasting energy savings while ensuring operational excellence,” says Rusty Steele, Schneider Electric development manager. An effective approach must combine infrastructure performance, including energy usage and quality, with operational parameters such as production and downtime data, resulting in true production energy optimization, he adds.

When a machine has a lot of downtime, it could also be wasting energy, says Tim Donaldson, Iconics’ vice president of marketing. Many processors don’t even realize this until they begin an effective monitoring program. Software can easily correlate aging and problem equipment through the use of energy trending charts, and when older equipment or less-efficient motors are replaced, downtime will decrease along with excessive energy usage.

Software lets processors correlate utilities and energy with particular product production data.

“We have many [processors] who treat inputs like energy or water as just another item in the bill of materials so they can assess whether each run of a given SKU is based on consistent consumption patterns, regardless of location, shift or time,” says Sean Robinson, food and beverage industry manager for GE Intelligent Platforms. When variances arise, processors have the ability to assess whether other operational factors drove the exception so they can correct the root cause quickly. Robinson has seen producers take more than 20% of the energy or water out of core production processes using this approach.

Track-and-trace: A profit center

“In today’s world of frequent recalls, food processors have to consider track-and-trace part of their ‘new norm’” says Rene Inzana, SYSPRO product manager. This process begins with maintaining high levels of quality control at every level of processing. “Recalls can be extremely costly, and by putting the right measures in place to reduce the possibility of a recall-or have the ability to act quickly and accurately if a recall is necessary-can greatly reduce losses” she adds.

“Traceability by itself is a good insurance policy but doesn’t really offer any ROI-other than that you may be able to grab more market share if you can prove that your competitors don’t have good traceability,” says TraceGains CEO Gary Nowacki. However, a properly deployed traceability platform can be leveraged into a profit center if the correct analysis mechanisms are layered on top, making traceability a proactive business component, he adds. Then traceability can help reduce variability, and improve finished-goods quality and profitability. The results can include 100% real-time, actionable visibility on all COAs (certificates of analysis) so that better disposing decisions can be made, as well as leveraging customer and consumer feedback to learn how individual suppliers and ingredients affect customer satisfaction, says Nowacki.

A real-time data collection system that provides quality and track-and-trace functionality lets processors know immediately when product is skewing off quality parameters, says Vernon Smith, CAT-Squared COO. Without the real-time capability, a processor might not see a report for a day or two, and would have produced a couple of day’s worth of lower quality “Grade B” product instead of “Grade A.” Many foods can’t even use a Grade B ingredient, so a processor may be forced to sell it as a commodity at a far lower price, adds Smith.

A comprehensive track-and-trace application is a gold mine of manufacturing intelligence, says Mike Gay, Rockwell Automation CPG industry segment lead. Track-and-trace applications can extract information from every data point across the plant, which can be calculated and presented to operations as an actionable key performance indicator (KPI) that can be used to change behavior. Types of information include the amount of material overage compared against a standard, yield, first-pass quality and process-area throughput. These behavioral changes can expose areas of weakness within a manufacturing facility and support continuous operations improvement programs, ultimately driving down the cost of manufactured goods.

Vendor-managed inventory

A computer motherboard manufacturer may have to worry about future obsolescence, but it doesn’t have to worry about shelf life. Not so with a food and beverage processor. When a food processor runs out of storage space and has to release product to a third party-whether a distribution center (DC) or a transport company-it loses control of managing its inventory, especially if it doesn’t have software that can manage product once it leaves the processor’s site, says Johann Heydenrich, itelligence Group director of industry solutions.

Vendor-managed inventory (VMI) is an application that is finding more use as processors realize that managing their products off site-from DC to the retail store-becomes extremely important for both track-and-trace reasons and for quality.

“If you have the ability to manage the inventory of your customers, then you have the ability to manage supply and demand automatically,” says Heydenrich. “The ability to understand the consumption at a particular retail store and being able to replenish accordingly can mean doing smaller batches,” he adds. VMI can decrease over-production where spoilage results in lost revenues.

“Those manufacturers who are proactive in marketing their VMI capability to their customers are able to capture shelf space and market share from competition by delivering more efficient replenishment performance,” says Jack Payne, director, solutions consulting, CDC Software. These efficiencies, he says, lower working inventory levels in the supply chain, shorten lead times and make the VMI-capable suppliers better partners who contribute to the retailer’s bottom line.

Private-label and brand-name manufacturers benefit from VMI in reducing costs, increasing inventory turns and gaining flexibility to cope with changing market conditions, says Karin Bursa, Logility vice president of marketing. Private-label manufacturers have limited distribution options with each product they produce. Their customers often require distinct packaging, leading to broader product portfolios and a potentially higher risk of obsolescence. This creates a problem of having the right amount of product delivered on time to each unique customer. According to Bursa, VMI gives the manufacturer more visibility and control over the product from manufacture to customer delivery.

Brand-name manufacturers often meet pricing pressure from private-label brands through promotions to lure customers back. “Buy one, get one free” offers are a prime example and can often boost normal volume by 20% or more. VMI allows the brand-name manufacturer to plan for, manage and communicate better production and logistics needs for each promotion, as well as regular replenishment, says Bursa.

“One of our branded customers has found VMI to be its key to success in building a more strategic relationship with its customers. Through VMI, [the processor] is able to offer highly responsive service and keep inventory rotating quickly.

Intelligent simplicity

A few years ago there was a trend to deliver as much information as possible in blazing color to plant operators on a single screen-often with screens full of flashing alarms. Fortunately, the trend today is to deliver key, actionable information built on manufacturing intelligence to targeted users in custom-tailored “widgets.”

APEX Manufacturing Solutions Managing Director John Nichols thought it might be interesting to acquire manufacturing intelligence data from the Wonderware Historian and deliver the key data in a “Google gadget”-like format, what he calls Factory Widgets. Based on Windows 7 gadget technology, the widgets are very simple, are easy to configure and require no Web browser or helper applications other than a back-end server (software). The widgets work over a network or the Internet  and can bring job-specific information to operators, maintenance, engineering, sales and others.

The gadget concept isn’t necessarily new; remember the term “dashboard” from just a few years ago, says Donaldson. But in some cases, an independent, browser-based viewer or “Web Part” can work on any browser on any operating system. Looking into the future, Donaldson suggests these mini-applications could keep people up to date from their Blackberry or iPhone.

New concepts borrow from older models

Two new computing concepts borrow on older models: virtualization and software as a service (SaaS).

Virtualization, the ability to run several operating systems (OS) and server applications on one or more pieces of hardware with multiple processors, borrows from an older concept of distributed computing, says Yves Dufort, Wonderware director, global industry solutions. Dufort has been working with two large food customers to implement this architecture in the near future. A real benefit to the IT staff is that it can stay with an older OS plus its associated applications and run the latest Windows OS on the same box. Users with client machines will need smaller, less-powerful computers because the actual applications run on the server hardware.

SaaS follows a similar architecture. Servers run all applications, and clients connect via a Web browser. SaaS borrows on an old, familiar model: rent or pay-as-you-go software.

SaaS, covered in the January 2010 issue of Food Engineering, provides processors with a means of employing sophisticated applications without initial, large investments in hardware and software. Payne suggests SaaS is a good alternative for small enterprises that don’t have the skills or talent to deploy and maintain complex enterprise applications.  He says most studies place a break-even point of around three years between SaaS and on-premise applications.

But large companies can find SaaS attractive for other reasons. Part of its Total Productive Maintenance (TPM) program, Unilever deployed Informance’s SaaS solution to 21 plants, including those in the ice cream business. According to Terry Herber, Unilever manager supply chain capabilities Americas, “Informance allows us to apply TPM loss elimination principles across our plants.

“For many years, we have used Informance in plants to tackle OEE (overall equipment effectiveness). We now have visibility of this information regardless of where you sit and can help replicate improvement gains across multiple factories,” Herber explains.

Many feel that SaaS is a very important-with a few reservations. “SaaS is the future,” says Olin Thompson, Lawson food industry strategist. “Today, a question of security haunts most companies for sensitive information (customer list, recipes, etc.). But this fear is mostly unfounded,” he adds. Thompson feels that the benefits will far outweigh any security issues, especially for the small processors who aren’t ready to install and maintain large systems.

Steve Hechtman, president of Inductive Automation, suggests that security is an issue for reasons other than hackers or industrial espionage: the US Patriot Act.

Indeed, an Internet search does seem to indicate that “cloud computing” could have a slightly stormy future-at least in the US. According the Patriot Act, computing equipment located in the US can be monitored and data retrieved by the federal government with the appropriate documentation, although it seems as though the US government hasn’t yet honed in on all the details (HR 1800).