What issue about your current plant/facility keeps you up the most at night? As a straw poll, we asked that question on Food Engineering’s website, and not surprisingly, the results that came back reflect the responses FE received while conducting this year’s State of Food Manufacturing Survey.
- Increase throughput to keep up with demand
- Automation is the biggest factor
- Speaking of budgets …
- Hardware/software: What’s up, what’s down
- OEE: Going up?
- Making structural changes
- Productivity improvement
- Packaging needs
- Food safety impact
- CSR numbers are disheartening
The big issue is throughput, and several factors contribute to it such as OEE; automation or a lack of it; cramped space where associates trip over each other, product and equipment; and a lack of qualified employees. (More on the straw poll later.)
In FE’s State of Food Manufacturing survey, when processors were asked why their gross throughput would increase in 2015, the reason cited most often was new products and lines. This shows processors are preparing for the next three factors—all market driven. They include:
- Increase in consumer demand
- Accompanying increase in sales
- More and new customers.
Other factors leading to an increase in throughput include equipment improvements, increased efficiencies, more/better marketing and expansions to accommodate additional demand, plus picking up competitors’ customers.
One operations manager explains an improvement in throughput at his facility this way: “[The] competition has had difficulty at one of its manufacturing sites.” Another manager reports new business because the competition has had several industry mergers, resulting in its customers looking for new suppliers. One engineering manager reports new accounts have been forcing increased throughput, and most of his company’s plants are operating three full shifts per 24 hours to meet the new demand.
While tried-and-true methods like traditional marketing campaigns increase sales, other methods are bringing in new customers. One operations manager reports an increase in business due to more consumers discussing new products via word of mouth and social media, resulting in growth in all regions.
Quality also sells products. Quality managers report new business and acquiring more customers through their product quality and food safety efforts. One quality manager sees new interest for all-natural products, especially from consumers with higher disposable incomes.
Consumers are also looking for healthy meal choices, which is forcing processors to be creative and innovative while increasing production levels. One operations manager has observed an increase in demand for organic products. In fact, he says there has been a greater demand for innovative products and more distribution across the board.
This year’s survey reveals more optimism in terms of increasing throughput at manufacturing facilities than during the previous year—albeit both this and last year’s surveys show an almost equal increase of throughput. Nearly three-quarters (71 percent) of this year’s respondents say they believe gross throughput at their location will increase an average of 14 percent, compared to 2014, when only 58 percent of respondents were expecting an increase, which was projected at 14.4 percent.
When it comes to a future decrease in throughput, a smaller number (5 percent) expects one compared to last year when 13 percent projected a decrease in throughput at their location; 24 percent expect their location’s throughput to stay the same. This year, 60 percent of respondents forecast gross throughput increases from 1 to 10 percent, while 12 percent predict throughput increases of more than 25 percent.
Likewise, respondents are very positive this year in terms of company-wide throughput increases. More than three-quarters (76 percent) expect 13 percent throughput increases company-wide; last year, only 56 percent forecasted increases at that level. This year, only 4 percent of respondents expect to see a downturn in corporate throughput, compared to 11 percent in 2014.
This year, FE’s State of Manufacturing Survey reflects that by far, automation is biggest trend for changing manufacturing operations—to make the plant more productive with added throughput. Whether you decide to automate your plant in stages or build a new plant that’s “lights out,” you can’t go wrong with automation if you want to stay competitive. Some recent examples of automated facilities include Mars in Topeka, KS; Starbucks in Augusta, GA; Farbest Foods, Inc. in Vincennes, IN; and Ocean Spray in Breinigsville, PA. All of these plants include the latest automation on their process and packaging/bottling sides, including perhaps the fastest Krones bottling system this side of the Atlantic.
Automation makes it easier to adapt to customers’ changing requirements. One manufacturing engineer says, “We must constantly change to meet customer requirements/demands. This either requires us to modify existing equipment or purchase new equipment, which is a challenge with our existing footprint.”
Many other processors can relate to this predicament. Our online poll shows not having enough space is the biggest reason processors being are kept up at night, wondering what to do to improve their operations. The next-major worry on our straw poll is low OEE on production lines, which can usually be helped by installing some automation in the right places, i.e., intelligent automation.
More specific issues related to automation that engineers mention in the survey include adding process control SCADA systems, designing and installing high-capacity lines, employing lean manufacturing tactics, increasing automation to help improve efficiencies, making it easier to perform product changes, adding flexibility to packaging lines for case sizes and labels, using wireless networks and optimizing networks, using cloud computing, improving the process, reducing bottlenecks and working on uptime logging to reduce downtime.
However, when it comes to putting the money where it needs to be, food processors still seem to be concerned about food safety and sanitary design, according to FE’s June 2015 Plant Construction Survey. A&E/C firms that design and build (new, expansions or renovations) for processors say the number-one trend in construction projects for 2015 is food safety and sanitary design, followed by automation. Of course, automation is now a large part of sanitary design, with automated CIP systems becoming commonplace in new designs and popular in retrofits.
While engineering and operations would like to improve throughput and efficiency, finding the funds to do this can be a challenge, especially with other operating costs such as ingredients, transportation, energy and taxes. An average of 21 percent of location budgets in 2015 (compared to 24.6 percent in 2014) have been designated for the purchase of production, packaging and process control equipment, software and professional services, according to FE’s State of Manufacturing Survey. Of this spending, about half will use less than $500,000 for plant equipment. Processors that have allotted more than $500,000 for this category account for 46 percent of this year’s total respondents, down from 58 percent in 2014.
Half of this year’s respondents also state their location’s budget for the purchase of packaging and processing equipment has stayed the same in 2015 as it was in 2014, while 42 percent say their budgets have increased by 17 percent on average. Last year, 36 percent of respondents reported an average 39 percent increase in spending for this category.
This year, 63 percent of respondents say their location’s budget for manufacturing automation and control hardware and software has stayed the same for 2015 as in 2014 (57 percent), though a third (34 percent) indicate their budget has increased by an average of 15 percent. In 2014, the same percentage of respondents earmarked an average of 26.4 percent of their location’s budget for the same category of automation hardware and software. Last year, 29 percent of respondents said they were earmarking 25 percent or more of their budgets to automation; this year, only 7 percent state they would allocate more than 25 percent of their budgets for automation projects. This is somewhat surprising since automation is seen as the biggest trend to change manufacturing operations in 2015.
The State of Manufacturing Survey asked processors what—if any—process control hardware/software they plan to buy this year. The tally was a little surprising. More than a third of respondents indicate their location plans to purchase programmable controllers (PLCs) in 2015, while 20 percent don’t plan to purchase any of the listed hardware/software. (See chart on page 66.) In 2014, 46 percent of respondents planned to purchase PLCs.
There were similar numbers for other automation categories, with automation necessities seeming to lose ground compared to 2014. Could it be that processors purchased the automation equipment as planned, so it is no longer at the top of the shopping list? For example, 46 percent of poll respondents in 2014 planned to buy motion and/or motor controllers; this year, the number has declined to 25 percent.
For whatever reason, respondents also have lost interest in plant control systems and upgrades. Those likely to purchase these systems in 2015 account for 28 percent of the total number of survey participants; last year, one-third said they would purchase control systems and upgrades. In terms of other controllers and advanced controls, 18 percent of respondents this year say they will purchase them; in 2014, the number was 31 percent.
Similarly, while in 2014, 13 percent of respondents planned to buy asset management and MRO systems, this year, the number has dwindled to 3 percent. In addition, 11 percent of respondents plan to buy PM and PdM systems this year; last year, 15 percent said they would buy them.
Digital sensors and transmitters are the most important parts of any control system. After all, you can’t control what you don’t measure, and you can’t fix a motor if you don’t know it’s on the way to ruin. Yet, only 21 percent of respondents plan to buy these devices this year, compared to 36 percent in 2014. The percentage of those planning to purchase HMIs was also 36 percent in 2014 vs. 21 percent this year. Could it be that stationary HMIs are losing out to wireless devices and wireless networks?
Speaking of wireless networks, 26 percent of respondents this year are earmarking funds for wireless plant networking equipment, compared to 23 percent in 2014. This year, 15 percent of respondents say they will purchase wired plant networking equipment, down from 20 percent in 2014.
While some of these numbers may be too small to be indicative of a trend, the increased interest in some areas of automation reflects processors’ immediate concerns for quality and food safety. For instance, this year, 29 percent of poll respondents indicate they will purchase lab analysis equipment and software, up from 2014’s number of 27 percent. Likewise, 24 percent of respondents plan to purchase HACCP/food safety management systems in 2015, compared to 21 percent in 2014. Quality management software saw a bigger increase, from 10 percent in 2014 to 19 percent this year. The planned purchase of statistical process control (SPC) systems has held steady at 14 percent.
Initially, it may seem processors are less interested in purchasing standalone systems to automate internal product tracking and tracing. For example, in this year’s survey, 11 percent of respondents state they plan to buy track-and-trace software systems; last year, 15 percent had committed to this type of purchase. However, one reason for the reduced numbers could be the inclusion of track-and-trace modules within so many other software systems, such as ERP, MES, recipe/batch management and inventory systems.
Undoubtedly, track and trace is top of mind, as reflected in the increased interest in procuring supply chain management software, which can certainly aid with track-and-trace issues once the product leaves the plant. This year, 14 percent of respondents say they are purchasing supply chain software, doubling last year’s number of 7 percent.
Energy management systems have commanded little interest this year, and their planned purchase has actually lost a couple of percentage points since 2014. However, the difference may be due to a variance in the company size of those responding to previous surveys. In addition, energy management is often included or calculated in other control systems. Consequently, processors may not believe it is necessary for them to purchase specifically redundant energy management software, unless it is actually integrated with a dedicated hardware system that can interface with motor controllers, HVAC, boilers and other heavy energy users. Also, the recent decline in natural gas prices has reduced the need for these systems. In fact, this year, only 10 percent of survey respondents say they will purchase energy management systems, down from 12 percent in 2014.
Who participated in this year’s survey?
Information in this report is drawn from the April 2015 survey of Food Engineering readers. This year’s makeup of respondents includes 43 percent from engineering; 18 percent, operations management; 12 percent, quality control; 9 percent, general administrative management; 4 percent, production management; 4 percent, R&D; 2 percent, packaging; 2 percent, purchasing; and 6 percent from other categories.
Processed meat, poultry and seafood products (18 percent) and baking and snack food products (16 percent) account for about a third of the respondents. Ten percent of the participants work in the beverage products industry, while dairy and frozen novelty products, flavors/ingredients/supplements and frozen foods/prepared meals each account for 8 percent of the respondents. The remainder of respondents include cereal and grain-based products, 7 percent; shelf-stable foods, 6 percent; candy and confectionery products, 4 percent; corporate and divisional headquarters/R&D/pilot plants, 3 percent; and other, 12 percent.
Setting a target for OEE is a little like setting hurdles for the high jump. You can keep reaching for higher targets, but sometimes, the goal is set unrealistically high and can’t be met. In this case, it’s time to reevaluate and set the goal a little lower, make it over the top and then set a new goal for the next level. This strategy may explain what has been happening with respect to the average OEE scores recorded in FE’s State of Manufacturing surveys. From 2011 through 2013, OEE targets were set higher, but actual OEE scores leveled off in 2013 and decreased in 2014. (See chart on page 64.)
Last year, survey respondents set an average OEE target of 79 percent after recording an actual median score of 71.7 percent, lower than 2013’s number. In 2015, respondents have set a target of 83 percent after reaching an actual median actual score of 74 percent this year.
Obviously, calculating an OEE score is much easier than fixing OEE problems. While you can fine-tune equipment to run at its peak, other variables enter into the overall score, such as employee breaks or failure to show up, power disruptions, ingredient issues, maintenance issues, bottlenecks or a lack of product to package.
One operations manager is keeping up the numbers with the “increased use of interactive technology in processing and packaging, so processes can be changed on the fly depending on need and product.” Another is looking at ways to reduce bottlenecks by training employees to be more responsive to problems when they occur.
When you’ve done all you can to keep your OEE scores in the high 80s and maybe even the 90s, you may require some major changes to reach the output and throughput necessary to satisfy new markets. For instance, one quality manager reports his company is adding line capacity to accommodate new products. A manufacturing engineer notes he is looking at more customization and small lot capacity, with fewer long, consistent runs.
In the past year, nearly half (46 percent) of respondents’ companies have expanded/renovated/added capacity to existing assets. This is in line with the results of FE’s Annual Plant Construction Survey, which revealed the total number of projects (635)—new and expansions—was the highest in the nine-year period from 2006 to 2014. The expansions and renovations number (415) was higher than the year before (358 projects) and, in fact, also was the highest in the nine-year period.
Having the right number of qualified staff on hand to get the job done is always critical, and FE’s online straw poll verifies this is processors’ third-biggest worry, following a lack of adequate space and having low OEE numbers. According to FE’s State of Manufacturing Survey, 39 percent of respondents have added manufacturing staff; 13 percent have downsized this staff. Last year, 35 percent of respondents added manufacturing staff, while 12 percent downsized.
When upsizing manufacturing staff doesn’t boost throughput and increase output, some processors turn to outsourcing. This year, more respondents have added outsourcing as an option: 24 percent versus 14 percent in 2014.
Processors also are using other means to increase output. This year, 36 percent of respondents are changing a process, 31 percent are adding a new line, 25 percent are installing automation systems, and 21 percent are adding production shifts. Some processors have consolidated manufacturing facilities. This year, 16 percent of respondents are doing this, compared to last year’s 21 percent.
Meanwhile, 19 percent of respondents have added engineering staff, down from last year’s number of 30 percent. This year, 8 percent of poll respondents report downsizing engineering staff, slightly more than last year’s 7 percent.
As an operations manager observes, doing more with less is the order of the day. One engineer points to autonomous maintenance and total productive maintenance (TPM) programs that can increase the productivity of the plant (basically OEE) and equipment with a modest investment in maintenance. However, TPM requires broad participation of a plant’s staff in several programs. Productivity can also be aided by implementing continuous improvement programs, for example, lean manufacturing, Six Sigma and the theory of constraints.
Out of the survey participants, 44 percent say they are implementing lean practices, down from 52 percent last year. Thirty-nine percent are implementing self-directed work teams, whereas only 34 percent reported using this approach last year.
Interest in three other methods is relatively unchanged: recommendations from third-party audits (35 percent), TPM (30 percent) and total quality management (30 percent). This year, 26 percent of respondents are using Six Sigma practices (down from 32 percent in 2014); 4 percent are using the theory of constraints. Eighteen percent of respondents say they have no program in place, whereas 7 percent said they had none in 2014.
Major productivity improvement needs cited by processors haven’t changed much since last year. Equipment upgrades are reportedly the most important, with 62 percent of respondents expressing some need and 27 percent a great need. About a quarter of respondents (24 percent) have a great need to and 59 percent have some need to improve the skills training of line operators, for a total of 83 percent. When it comes to training for line supervisors, 79 percent of respondents express a need to improve these employees’ skills (21 percent cite a great need).
Maintenance issues and the standardization of parts, motors and other equipment also loom as real concerns for processors, 73 percent of whom want improvements to maintenance systems, while 71 percent would like to see streamlining in parts standardization.
Other areas of productivity improvement needs include:
- Expand/retrofit current facility
- Upgrade process controls/architecture
- Improve communication between manufacturing levels/areas
- Improve OEE reporting
- Improve KPI monitoring
- Improve supply chain management.
Some of the major wants and trends can be found in the packaging area. One operations manager mentions the increased use of interactive technology so processes can be changed on the fly, depending on need and product. Another manager wants flexible packaging systems where changeovers are accomplished with a minimum of tools and within a short period of time. An operations manager sees further development of automated packaging as a way to decrease human labor, which has an added benefit of potentially reducing accidents and injuries.
Nearly half of respondents (45 percent) indicate their companies are changing out/upgrading equipment and/or training operators and involving them in maintenance and improvements to improve packaging operations. Two-fifths of respondents say they are increasing packaging line throughput, while 39 percent say they are improving changeover speed, and 36 percent say they have improved availability/uptime.
Other key areas in packaging where respondents have expressed their desires include decreasing energy usage (29 percent), adding inspection equipment—either X-ray or metal detection systems (26 percent), changing packaging materials (26 percent) and being able to identify bottlenecks through the use of OEE (25 percent).
Food safety is always important, but processors subject to FDA rules have been waiting for some specificity. According to one QC manager, “FSMA and the new rules coming out this year will have an impact on how we do things; we will know more once the rules are finalized.”
And the impact will be heavy for some processors. Says one engineer, “We have many older facilities with dated equipment that is nowhere near today’s standards. [FSMA] will result in our either thinking about how we process or making major capital improvements for equipment.”
Are processors up to speed with FSMA? According to FE’s survey, they’re a little better prepared than last year. That is, currently 41 percent of the survey respondents already practice what FSMA preaches; this number is slightly better than last year’s 38 percent. While processors may be concerned about FSMA, in many cases, they’re feeling more urgent pressure from their customers to acquire one or more GFSI certifications. In fact, 34 percent of respondents say they are adopting one of the GFSI schemes, such as BRC, SQF or FSSC 22000.
Meanwhile, a large number (26 percent) of respondents have or are moving to electronic recordkeeping, up from 17 percent last year. About a quarter of the respondents have created checklists of what is needed to comply with FSMA regulations. Not quite as many processors see FSMA as creating an undue burden, probably because they’re already up to speed. However, roughly one in 10 processors thinks a new building may be required to satisfy FSMA in full measure.
Processors are stepping up to the plate and using several tools and practices to ensure food safety. The most commonly implemented food safety methods include lot level traceability (used by three-quarters of respondents’ companies), food safety management systems (68 percent), auditing of suppliers and co-packers (66 percent), comprehensive staff training (65 percent), food allergen controls (65 percent) and a recall plan (63 percent).
With scientific studies being published such as “Accelerated modern human-induced species losses: Entering the sixth mass extinction,” which appeared in Science Advances magazine, one would think corporate responsibility programs would be gaining in popularity and would be viewed as an absolute necessity. But less than three-quarters (72 percent) of respondents’ organizations currently have a corporate social responsibility or sustainability program in place, the majority of which include workplace programs. This is down from last year’s survey, which showed 79 percent of respondents had a program in place.
In terms of the types of corporate social responsibility or sustainability programs in use, the numbers are somewhat less than last year overall, which may be due to survey variance or could be a snapshot of reality. Respondents who report having workplace programs in place (such as safety, diversity, etc.) total 86 percent. Last year, the number was 94 percent. Those with social responsibility/community outreach programs number 70 percent, down slightly from 72 percent in 2014.
In addition, the percentage of respondents whose companies are monitoring water and electricity per unit of production has dropped sharply from 66 percent in 2014 to 46 percent this year, while those performing greenhouse gas (GHG) calculations and/or carbon footprints dropped from 36 percent in 2014 to 27 percent this year.