Best Practices inPackaging Operations

Best Practices inPackaging Operations

John BlanchardDirector of ResearchFood & Pharmaceutical IndustriesARC Advisory Groupjblanchard@ARCweb.com

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Over 80% of users who responded to ARC’s best practices survey were less than satisfied with the ability of their packaging operations

to help meet business objectives and customer requirements?

Packaging Operation Impact Manufacturing and Supply Chain Efficiency & EffectivenessPackaging Operation Impact Manufacturing and Supply Chain Efficiency & Effectiveness

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¨ Over 80 percent of these manufacturers said that most of their packaging machines remain islands of automation with· Limited on-line diagnostics· Limited access to machine status and

performance information· Limited connectivity to other machines on the

line

¨ Limited flexibility to meet changing product needs and customer requirements

Current State of Most Packaging OperationsCurrent State of Most Packaging Operations

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Major Trends Impacting OperationsMajor Trends Impacting Operations

¨ Growth of in-store promotion orders and requirements, demand driven ordering, custom orders, rapid change-orders

¨ Final assembly moving closer to customer to meet demand driven market

¨ New sizing and distribution for less industrialized world – i.e. single day sizes for small neiborhood shops

¨ The “Green” (global impact) and “Survivability” issues

¨ Talent issues both machine OEMs and packers

¨ OEM cash flow issues

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PerformancePerformance

Followers

Competitors

Leaders

0% 5% 10% 15% 20% 25% 30% 35% 40%

Normal Operations Abnormal Operations

Unscheduled Downtime

¨ Leading companies have less than 10% downtime due to normal and abnormal operations

¨ Competitive companies average about 20% downtime with over 67% due to abnormal operations

¨ Many companies average about 40% downtime

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PerformancePerformance

¨ Leading companies measure performance on over 80% of their lines

¨ Competitive companies average less than 40% of their lines

Followers

Competitors

Leaders

0% 20% 40% 60% 80% 100%

Percentage of Lines Measuring OEE

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PerformancePerformance

Degree of Integration with Other Operations

Followers

Competitors

Leaders

0% 20% 40% 60% 80% 100%

Excellent to Very Good Good Poor

¨ Leading companies have a significantly higher degree of integration with other manufacturing, business, and supply chain operations and systems with bidirectional exchange of information for automated record keeping

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PerformancePerformance

Followers

Competitors

Leaders

0% 20% 40% 60% 80% 100%

Excellent Very Good Good

Level of On-line Quality Assurance per Line

¨ All companies have on-line quality assurance technology on their lines

¨ Leading companies have significantly more and more types of on-line quality assurance technologies such package content verification and non-metal impurity detection

¨ All of the survey respondents felt there was room for improvement in on-line quality verification, with almost two thirds saying there was significant room for improvement

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Best PracticesBest Practices

¨ People

• Line supervisor empowered shift scheduling

• Line operator empowered product run scheduling

• Line operators performing some first line machine maintenance

• Shared resources across manufacturing sites

¨ Processes

• Automated enterprise-wide line performance management

• Standard terminology, calculations, and business processes across all manufacturing sites

• Shared performance data and improvements across manufacturing sites

• Automated enterprise-wide product label management

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¨ Technology

• Significant servo and PLC/PAC based machine control with line control HMI

• Packaging lines networked together and integrated with operations and business systems

• Balance equipment flexibility and performance

¨ Information

• Packaged lines networked together and integrated with production, business, warehouse, shipping, and logistics operations with bidirectional exchange of information for automated record keeping

• Supports evolving standards and guidelines

Best PracticesBest Practices

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Additional Best Practices & Emerging PracticesAdditional Best Practices & Emerging Practices

¨ Leading companies have a more collaborative relationship with their OEM machine builders, involving their OEMs in the early stages of new product development

¨ Leading companies have opened up their single control vendor standard to a select few that can demonstrate superior performance

¨ ARC also believes that an “emerging practice” of early adopters is the selection of machines and design of packaging lines based upon adherence to principles outlines in the OMAC guidelines and evolving standards

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Many Benefits for Many OperationsMany Benefits for Many Operations

Group Benefits

Packaging Operations More Accurate and Timely Order Fulfillment

Reduced Operating Costs

Reduced “Cost of Quality”

Simplified Regulatory Compliance

Reduced Product, Case, and Pallet Labeling Errors

Shipping Improved Dock Turnaround Time

Warehousing More Accurate and Timely Replenishment

Reduced Palletizing and Picking Errors

Reduced Inventory

Order Processing/Customer Service

More Accurate and Timely Billing

Reduced Customer Returns

Improved Manpower Productivity

3rd Party Logistics Improved Productivity

Reduced Costs

Maintenance Reduced Unscheduled Downtime Costs

Reduced Operating Costs

Advanced Planning & Scheduling

Shorter Planning Cycles

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Thank You.Thank You.For more information, contact the author at

jblanchard@arcweb.com. Please visit our web pages at www.arcweb.com