It seems there is no let up in the raft of new technologies to hit the manufacturing sector. Acronym hell in the shape of ERP II, MRP, EPM, APS, BI, CRM, VOIP, XP, SQL, AIM, APQP and BPM (to name but a few), means that it’s easy to understand why many manufacturers might switch off to the latest announcement of version ‘7.9’ of company X’s product.
It is true that many new technologies are a case of technology for technologies’ sake and often they demand hefty investment for little return. However if deployed in the right way, some new technologies hold the key to unlocking the major cost savings and efficiencies needed for manufacturers to inflate squeezed margins, maintain a competitive edge, comply with legislation and ensure profitability.
The challenge lies in understanding which technologies can deliver genuine benefit and which should be left to the glossy marketing brochures.
One example of a technology which is delivering major benefit across a number of industry sectors is mobile computing. Although mobile computing has inevitably been caught up in media hype, it has proved beyond doubt that it has the propensity to deliver substantial return on investment. Within fresh produce, manufacturers it can create major impacts in three key areas: live stock, production efficiency and brand protection through traceability.
Mobile computing as an enabler to real-time data capture
The capture and feedback of real-time data is fundamental to achieving the visibility and dynamic control needed in today’s fast moving fresh produce industry. Data capture can of course be achieved without the use of mobile computing. However in a ‘rugged’ manufacturing environment the only way to genuinely capture and feedback data in real-time is to implement wireless devices in the production plant itself.
Currently many manufacturers record data on paper which is then entered into a computer-based system, sometimes several days after the event. Clearly this approach is not real time, is error prone and is destined to result in manufacturers falling short of meeting ever-stringent customer and regulatory demands.
LIVE STOCK
A lack of knowledge of their live stock position is costing manufacturers hundreds of thousands of pounds each year in stock errors (including mismatched packaging and labelling), missed shipments, poor customer service and out-of- shelf-life product.
Through implementing hand-held devices in the warehouse where operatives can capture live data and issue feedback in real-time, a live stock position can be established. This clear visibility of current inventory means that manufacturers can gain competitive edge through minimising costs, improving service and responding quickly to fluctuating customer demand.
ON THE PRODUCTION LINE
The production line is another source of inefficiencies which can be improved substantially through the use of mobile devices in capturing and feeding back real-time data.
According to the six sigma model, OEE (overall equipment effectiveness) factors which contribute to the maximisation of efficiency in the production process include:
• Utilising production equipment for the maximum time available. For example a dormant production line in a sector where demand outstrips supply inevitably comes with a hefty price tag.
• Maximising quality ratios is an area where efficiencies can be greatly improved. This can be calculated by the quantity of premium grade material produced, divided by total production. For example in the production of a fruit salad, there is huge scope for unnecessary wastage to escalate if not monitored.
• Measuring the rate of production against the capacity of a machine to produce is fundamental to ensuring that productivity is as high as it can be. So, if significant investment has been made in a machine which can process both meat and vegetarian products, the return on its investment will be diminished if the machine only ever manufactures salads.
In order to properly measure the effectiveness of the production line and improve efficiencies against these criteria, data must be captured and used as it happens, requiring the use of mobile applications at the coal face of production. Only through assessing these factors in real-time on the production line can improvements be made.
BRAND PROTECTION AND TRACEABILITY
January 2005 saw the introduction of the EU General Food Law Regulation (178 / 2002) which states that manufacturers must be able to recall a product, if required, ‘on demand’. The high-profile Sudan-1 food scare case followed in February 2005 and fuelled already heightened public awareness surrounding food safety. These factors combined mean that fresh produce manufacturers cannot afford to take any chances in the way in which products recalls are anticipated and managed if they are to preserve their brand reputation.
A truly ‘on demand’ response to a recall can only be invoked if data on a product’s development has been recorded in real-time, requiring a mobile device.
So with this evidence set out on the table, what is stopping fresh produce companies from investing in mobile technology to improve the availability and use of data?
COST, CULTURE AND CHAOS
Cost, culture and chaos (in the sense of disparate systems) summarise the key barriers to implementing such a strategy.
Although the case for return on investment (ROI) on a mobile computing implementation is clear, any investment must be weighted against other business priorities. If a broken machine needs to be replaced, this is likely to take precedence over an IT-related investment.
Secondly, the right foundations, in the form of a good ERP system, must be in place in order for a mobile strategy to work. If integration is impossible then the project is likely to escalate and become prohibitive from a cost perspective - at least in the short term.
However the main barriers tend to be cultural. Often the fear of something new, or the perception that a new way of working might compromise the freedom of the production manager, can take their toll in preventing such a solution. Resistance from users also creates challenges; so instilling an IT-centric culture where buy-in is sought from users at an early stage is key to ensuring that the project is a success.
TO SUMMARISE
There’s no question that making the shift to implementing a mobile manufacturing strategy is a significant step change for many manufacturers. However the hundreds of thousands of pounds worth of efficiency savings delivered as a result of such a strategy would seem to be a fitting reward. Sooner or later such a strategy will become compulsory in order to comply with legislation, maintain a competitive edge and ultimately, protect brand reputation so those who steal a march now will be best placed to prosper in the future.
Dave Hogg is director of business development at Ross Systems, which is a unit of CDC Software (NASDAQ: CHINA), delivers innovative business solutions that help manufacturers worldwide fulfill their business growth objectives through increased operational efficiencies, improved profitability, strengthened customer relationships and streamlined regulatory compliance. For more information, visit www.rossinc.co.uk.
DON’T EXPECT MUCH THANKS FOR 99 PER CENT ACCURACY
Customers are a demanding lot, and their expectations get higher all the time. We all invest time and money in building and maintaining good relations with our key customers, and we try our hardest to delight them every day. Don’t we?
It’s an unforgiving world, though. If you made one hundred deliveries last week, ninety-nine of them perfect and one that went wrong, which one did your customer remember? When they called yesterday, was it to congratulate your account manager for achieving 99 per cent success? Or was it to complain that you let them down, and to hear what measures you’ll be taking to prevent a repeat occurrence?
Screwing up a delivery can be an expensive business nowadays. Of course, customers are entitled to reject product at the point of receipt if it doesn’t meet their quality criteria. But they also expect you to ship the quantities that they ordered, at the right time of day, in approved packaging and correctly labelled up. Many customers have started to introduce financial penalties for failure to meet these requirements. In the worst case scenario of a product recall, fines can run into tens of thousands of pounds.
Let’s take a closer look at what can go wrong with product delivery, and how IT can help prevent it.
QUALITY
Perhaps surprisingly, product quality is not often cited as the top reason for failing to meet customer expectations. Specifications are well defined and don’t change that frequently. Rigorous QA at intake, in storage, during production and on despatch makes it less likely that unsuitable product will get through unnoticed. Even if a sub standard lot does reach the customer, there may still be an opportunity for you to replace it in situ.
Market-leading companies tend to see QA as their competitive edge and treat it as a fully integrated, vital part of their operations. The key to getting it right is formal business processes for QA activities, with clear documentation and a change control procedure, plus structured training for new personnel. IT can help by providing tools to record product specifications and QA test results in one central place where they can be shared and analysed. More recent developments include mobile QA using hand-held devices and integration of test data within the core business system. This improves visibility of QA information across the organisation and enables rapid feedback to suppliers and more efficient claims when problems occur.
QUANTITY
In a market where forecast supply and demand can triple or halve in the space of 48 hours, depending on climate events, is it reasonable for customers to insist that you meet their order quantities? Reasonable or not, customers are demanding just that and there is even talk in some quarters of introducing penalties for failure to deliver on a previously agreed seasonal programme. Of course, if everyone faces the same situation then you can expect a more sympathetic hearing, but if you can’t meet demand when others in your sector can...
IT can certainly help you to balance supply and demand in a dynamic environment - this is a sizeable topic in its own right. For more information refer to Bob Rose’s article Managing Supply and Demand with IT (FPJ, October 2005).
LABELLING
One of the most common reasons for a failed delivery is mislabelled product. It’s surprisingly easy to do, and there are plenty of opportunities for doing it. It’s likely there will be multiple labels on the pack, plus additional labels on trays, pallets and other pieces of distribution hardware that refer back to the product itself. Some labels will contain variable information, like country of origin, and display until date.
Customers tend to change their labelling requirements more frequently and at short notice, to encompass promotions for example. Does everybody know who needs to know? If the wrong label is chosen at the start of a job, what are the chances of your production team faithfully repeating this mistake until the job ends? Then there’s your multi-level QA procedure: how foolproof is it in reality? The average person is less likely to reject product if somebody else has approved it beforehand.
IT can help here in several ways. One key initiative is to include your label specifications in data held within your core business system. That way, when the labelling specification for a product changes, there is only one place you need to record it. Everyone in your organisation works from the core system, so everyone has the latest information. Packs and trays can be verified by scanning the label prior to despatch - this can be used to drive a series of QA checks from the labelling spec itself. Also, you can verify against the customer’s order too: preventing good product from being despatched to the wrong customer or depot.
TIMELINESS
If perfectly labelled, top quality product leaves your facility every day, how galling is it to have a delivery rejected because the time slot was missed at the distribution centre? Of course, that may be your transport provider’s fault rather than yours, so perhaps you can pass any financial penalties you incur on to them.
But IT can help here too, with the latest core business systems including a logistics module for planning transport and building loads more efficiently to meet your daily timetable, against orders that may change during the day until final confirmation has been received.
To conclude, quality and consistency of product delivery are increasingly valued by customers. This is definitely one area where you can’t afford to lag behind your competition. Get it right first time, every time, and your customers will be delighted. Get it wrong and the relationship will suffer: keep doing so and you will be handing them an open invitation to investigate alternative sources of supply.
IT can certainly help, and it’s not that difficult to make a business case for sensible investments to improve. If you integrate quality management successfully into your core business system you are sure to gain a competitive advantage.