Mechanizing is People Work: 6 best practices for a successful new production line

8 October 2018

8 October 2018

Mechanizing is becoming increasingly important but also increasingly difficult for food producers. Many companies feel the need but doubt they will be flexible by then. In addition, large investment projects often have poor track records. Yet there is also a group of front-runners who are mechanizing smartly and being successful at it. What do these mechanization champions do differently and what are their key best practices?

Introduction

The food industry has a number of challenging themes such as consumers becoming less and less predictable, greater pressure from retailers on (private label) producers to come up with new products faster and faster, increasing price competition, growth in online and rise of consumption in the office and on the go. Combined with rising labor costs, staff shortages and ever-increasing complexity of recipes and packaging, this creates challenges for many food producers.

In addition, many producers struggle with a number of key questions, such as “How do we stay relevant and distinctive on the shelf? How do we remain cost-effective and innovative despite the increase in SKUs, smaller batches and shorter delivery times? Where do we get the right people – especially in production and R&D? Is incremental improvement enough or are larger steps needed, such as process innovation through mechanization?

To mechanize or not to mechanize?

In this context, many companies face the question of whether or not to mechanize or make a replacement investment and, if so, what is the best approach. There are several advantages and reasons to mechanize:

  • Less staff required
  • Higher raw material efficiency through reduction of (floor) waste
  • Reduction of variation in the process
  • Lower cost prices
  • Increasing distance from competitors (or decreasing distance from leaders)

In addition, in practice, there are also doubts and reasons not to mechanize:

  • So are we still flexible? Can we still make small batches?
  • What if the market continues to change, will we be able to make different/new products?
  • Are we going to recoup the investment and if so how soon?
  • We have a poor track record with this type of project which often means it takes more time and money than anticipated in advance

Pitfalls in mechanization projects

Advance decision-making is not the only challenge. Even after the machine or line is delivered, many things often go wrong in practice:

  • Machine is difficult to operate or convert
  • Machine turns out not to be able to handle all raw materials and is therefore more limited in its use than previously thought
  • The machine was purchased for the current portfolio but appears unsuitable for future developments from commerce and R&D (think new recipes or smaller batches)
  • New hygiene risks because the machine has many sections that are difficult to clean
  • Machine supplier has customized the machine, but then also offers it to competitors (the intended competitive advantage is gone immediately)
  • A difficult start-up due to too short a preliminary process

Best practices

So how should it be done? And what can we learn from the “frontrunners” who are investing smartly and being successful at it?

  1. Create a multidisciplinary team. More than 50% of an investment’s success is determined by the organization’s buy-in. A multidisciplinary team – for example, Commercial, R&D, Quality, Production and TD – creates ownership and understanding of the final solution. Involve the different layers of the organization: from operator to director. By jointly building the business case and carrying out implementation jointly, areas of tension between disciplines become visible and conscious choices must be made.
  2. Provide a thorough preliminary process. Don’t be too quick to choose a (standard) solution from a well-known vendor, but also explore new vendors and alternatives. Test potential solutions with critical raw materials and packaging for speed, quality, safety and hygiene. Have the team review the various options and incorporate the feedback into the final design. Experience shows that extra time and attention in the preliminary phase (“pre-thinking”) pays off during implementation by making the line operational faster: “Use only reliable, thoroughly tested technology that serves your people and processes” – Jeffrey Liker, The Toyota Way.
  3. Buy for the future. Take into account not only current requirements, but also future requirements that a new machine must meet. Explore market and legislative developments together with R&D and Commercial and make sure the solution is suitable for the current portfolio as well as future developments – such as new recipes, different quality requirements/THT or shorter runs. This may increase the investment but that must be balanced against the longer life and future usability of the machine.
  4. Work with partners. The playing field around process innovation is becoming increasingly complex and less manageable for a food producer alone. Therefore, work with machine builders and external knowledge partners to keep up with the speed of developments. There is a shift of focus from engineering to IT and smart industry-type solutions. Machines and lines are becoming less and less self-contained islands and more and more part of a larger data-driven production system.
  5. Protect process innovation from copyability. Make sure – if possible also legally – that a machine or line that has been customized cannot simply be offered to competitors by the supplier. The intended competitive advantage is then immediately gone while the organization has put a lot of time and energy into it. A line that is customized and consists of multiple partial solutions from different vendors is harder to replicate than a total solution coming from a single vendor.
  6. Choose a hybrid production structure. Distinguish between “bulk” lines (or plants) that produce the larger runs and flexible lines (or plants) where the smaller batches and innovations are done. In doing so, basically do not produce bulk volumes on specialty lines and vice versa. The basis is to get a good idea of the actual cost in order to make a proper comparison. For example, try to really assign raw material losses to specific items and production lines. This provides better production control but also places higher demands on the S&OP process that can be plant-wide.

Applying best practices brings important benefits. While more preparation is required, the line is operational faster and meets standards. Our experience shows that if the preliminary process goes well, a line can be up to speed within a week. That is much more effective than preparing briefly and starting quickly, but then spending a long time with all kinds of start-up problems and a performance that does not reach the intended standard.

Other benefits include ownership and greater acceptance by the organization, a solution that also meets future requirements, protection of competitive advantage and maintaining flexibility.

In conclusion

Mechanizing is not just about technology but is primarily people work. A mechanization project can be compared to a major IT project: if the end users do not like the system or have not received proper training, the system will not deliver the benefits that were envisioned beforehand. Successful mechanization therefore requires both project management (the content side) and change management (the human side). This increases the likelihood that a new line will be operationalized on time and on budget, and that the intended results will be achieved because operators, team leaders and technicians will be able to work with it optimally.