What do you measure: Production or Productivity?

In today’s highly competitive and quickly changing business environment, food companies face the challenge of producing safe food of high quality standards at low cost. Production optimization is of major importance, while even one food safety mistake could be devastating for a brand that might never fully recover. Processes, products, and even people have to comply with numerous standards such as legal regulations, quality management systems, varying customer requirements, and environmental issues, sustainability parameters, codes of conduct, and so on.

In such a fast-paced society, a food company needs to work under First Time Right conditions to meet time, volume, and money requirements without compromising food safety. It is common that production speed is continuously monitored and assessed with parameters statistically processed and color-coded results displayed in graphs to depict the optimal, average, and low results or actual versus target values. However, manufacturing and operational inefficiencies and failures are often underestimated, miscalculated, or not taken into account because they are considered part of the “cost of doing business.”

Production costs are easily estimated and monitored in optimal conditions, but in unforeseen situations, these are much harder to track and estimate their impact. A few examples that demonstrate the benefits of the First Time Right approach are:

• The lack of adequate and timely preventive maintenance leading to total or equipment failure (e.g., not operating at rated capacity) during production.
• Process failures leading to recycling, reprocessing, or waste and corresponding inefficiency and failure costs.
• Non-operational repeat tasks resulting in costs that are doubled or more if they delay or stop the manufacturing process. For example, re-cleaning a line or piece of equipment leads to unplanned, increased cleaning costs and productivity loses if the line cannot be started on time.
  
   

Culture Change

Personnel incidents, equipment damage, and product failures are only a few of the unexpected events that could happen on any given day. Any event has numerous implications, such as production downtime or non-conforming product that needs to be stored and tested, reworked, or rejected and disposed of, and usually involves even more delays in the process to return to normal production speed.

Little mistakes might result in product deterioration or waste, resulting in larger raw material quantities consumed for average production or increased labor time, consequently imposing a higher cost to the end product. Training necessity for personnel, operators, and contractors gets broader as more specialized knowledge is needed, but, on the other hand, training alone is no longer enough. A change in the culture is more than necessary, although it is harder to accomplish than may be expected. Many companies have already priced their products at the threshold of what the market will bear and their production lines are running at or slightly over capacity with as few resources as possible. The workforce has to be truly involved and motivated.

What is the reality in the industry today? In the common case of equipment damage that results in production downtime, a speedy recovery and return to normal running is critical. However, you need to ask yourself if, in a stressful situation like this, personnel are trained and advised to take the time needed to perform all tasks as necessary prior to starting production again.

It is not uncommon for maintenance debris to be overlooked because of time limitations, and it has been seen that cleaning processes conducted in a hurry or under stress may result in deterioration and cross-contamination issues of nearby equipment or materials. Unfortunately, the cost of such faulty repair tasks, which are reflected in a costly recall, complaints, or product non-conformity, is seldom subtracted from the overall productivity of the manufacturing facility.

Personnel safety has numerous implications. Near-miss situations are closely monitored, and root cause analysis is conducted so that potential improvements can be defined, prioritized, and accomplished. However production near-miss situations are not always handled in the same way. A near product failure may be a lot more difficult to detect and subsequently thoroughly analyze to define opportunities for improvement.

There are a number of issues that can be overlooked if not properly analyzed to fully understand and estimate the impact. Old equipment, although it may still be running, can easily result in increased maintenance stops or product deterioration. In such a case, while acquiring new equipment may appear impractical in terms of cost, it would probably result in increased volumes and better production speed that in many cases would quickly make up the investment costs.

Likewise, deteriorating or inappropriate building structures may result in increased waste materials and over-expenditure for ingredients or deterioration of finished products. Inadequate cleaning of non-obvious surfaces, such as overhead structures and equipment near the product zone, may result in microbial growth or other cross-contamination issues that will deteriorate the end product.

In many cases, although the time investment may seem costly from the initial standpoint, it might easily be determined that taking the time to properly inspect, clean, or train will result in fewer failures over a period of time.

Additionally, in many cases, facilities try to measure waste created onsite during storage of raw materials and finished products or production itself. When waste volumes are estimated, the extra cost can be easily determined. However, it is important to not only measure the amount of productivity lost to inefficiencies and failures, but also to actually investigate and establish the reason the waste was created in the first place.

Detection of the failing procedure behind the waste volume and determination of a corresponding improvement that would eliminate the problem may be a very challenging, yet necessary, task to undertake. A good place to start is thorough and accurate recording of inefficiencies, failures, and even habits. A summary of such events grouped by department, area, and program may indicate specific tendencies that had not been previously detected.
 

Analyzing Root Cause

A thorough root-cause analysis to identify the program failure behind the issue noted should be conducted. For example, you could apply the Five Whys technique to explore the cause-and-effect relationships underlying a given problem.

One such example is:

Client complaint and returned product (bread buns):

1. Why? Pieces of burnt product on the buns.
2. Why? Previous product debris stuck on the buns.
3. Why? The oven trays were not adequately cleaned.
4. Why? The oven trays were old and deteriorated, the surface was not smooth.
5. Why? No oven tray maintenance program was conducted on a defined frequency.
    

An optimum manufacturing control plan would take into consideration various parameters, such as:

• Manufacturing process step interdependencies known as the 5Ms (material, methods, machinery, manpower, money).
• Applying root cause analysis to identify the reason for inefficiency or failure.
• Identify improvement opportunities.
• Rank and prioritize opportunities for improvement.

It is critical for any leadership team to be able to identify, analyze, and quantify manufacturing failures and inefficiencies, determine the associated lost revenue, and apply common improvement approaches to counteract the elevated cost of goods sold and increase productivity and gross margins. Effective management should be able to understand how to calculate the cost of failures and financially track profitability. Manufacturing optimization not only depends on the production workforce, but starts from a business management philosophy.

The author is Global Manager, Food Safety Services Innovation.