Manufacturing Operations Management Keep Companies Healthy

But perhaps most alarming was the discovery that these simple-to-address, people-based problems are essentially invisible in most food plants, a fact evidenced by the significant gaps that exist between reported factory efficiency performance and actual performance, which varied, on average, 9.1% across a sample size of 100 plants.

Why the disconnect? Quite simply, in most food plants, shop floor personnel are operating in the dark. They lack the relevant real-time information required to identify and report production-line problems as they occur. Furthermore, processors almost always lack a framework within which to teach, execute, and sustain daily operating best practices.

As a result, company executives aren’t able to take steps to drive change because the compelling need and potential improvement benefits have not been revealed and quantified by plant directors. This is not because plant directors are unwilling to reveal the opportunity but because they are not aware of it themselves.

Yet, according to the CDC Factory study, failure to take appropriate action on these performance improvement opportunities is costing food processors three to five points in bottom-line profits—the difference between profit and loss at many food companies today.

Food processors can capitalize on this hidden opportunity by helping the shop floor improve visibility into production. And, in order to make a direct and significant contribution to the company’s profitability, operators and supervisors must be empowered with real-time information—actionable information they can use to shine a light on production performance and help prevent problems from occurring. In essence, the shop floor needs a practical, people-based information management system.

Say Hi to MOM

Leading food processors have found an answer in MOM technology and techniques. Much more than technology, MOM represents a fundamental shift in the way food manufacturers improve production performance. In essence, it’s a new way of thinking about the shop floor’s contribution to the business—a very different approach from traditional methods involving data historians and manufacturing execution systems, which collect mountains of data and create more work for the very people who want to contribute.

What makes MOM different from other traditional automation technologies and systems?

• MOM systemizes the human element: By “systemizing” the human element, MOM takes what has traditionally been a theoretical, feel-good concept—the idea that people are the key to vast improvements in performance—and makes production efficiency improvements practical, repeatable, and predictable.
• MOM eliminates paperwork: MOM does away with the endless, de-motivating reams of shop floor paperwork. Instead, it provides operators and supervisors with clear, real-time insight into the performance of their own production lines, much like a speedometer helps a driver adjust his or her speed.
• MOM makes improvement practical: Best of all, MOM technology and techniques are practical and people-oriented. They are designed around the way the shop floor works, providing operators and supervisors with immediate, real-time actionable feedback while enabling them to make real, measurable contributions to performance improvement that are aligned with corporate goals and objectives.

The advantages of MOM in an environment of systemic and lasting food price increases are far-reaching. MOM systems and best practices are helping food processors to systematically eliminate waste related to labor and materials, leading to a significant reduction in production costs. The advantages MOM has over other approaches include fast and significant improvement, reduced giveaway, less product rework, elimination of non-value–added quality checks, avoidance of unnecessary capital expenditures, and the unlocking of human potential.

MOM is no longer reserved for pioneers and mavericks. Hundreds of food producers—including makers of salads, yogurt, entrees, sauces, cakes, beverages, and cheese products—have already embarked on MOM initiatives, providing their peers with reasonable examples of what can be expected.

The results these companies have achieved are nothing less than remarkable. Near-immediate efficiency gains of 15 to 40%, with decreased labor hours and increased customer service levels, are not uncommon. Not surprisingly, leading analysts are taking notice. In fact, in 2007, Gartner Group, AMR Research, Forrester Research, and ARC Advisory Services all published research briefs touting the benefits of these techniques and technologies, and there are many case studies supporting their use, including one involving Breyers Yogurt Company (see “MOM Helps Yogurt Maker Improve Efficiency,” below).

Reduced Giveaway

It is common knowledge that in order to ensure high customer satisfaction, food processors, especially those involved in private label manufacturing, will often overfill product to avoid the risk of falling out of spec. But in an environment of escalating prices, this practice has become unsustainable.