Outsourcing Production Maintenance — A Recipe for Success?
Since the beginning of the economic downturn, food manufacturers have increased production capacities to meet the demand of families that traded eating out in favor of enjoying the simple pleasure of eating at home. Many of these food processors are production constrained and are investing in their manufacturing chain in order to meet consistently growing demand.
With over 64 percent of all food processing plants more than 20 years old, annual capital invest is high. In fact, 5 percent of sales revenue goes to equipment upgrades and equipment purchases. Yet with so many plants being production constrained, why have food manufacturers been slow to adopt Lean manufacturing? According to analysis by Advanced Technology Services, Inc. of combined data for four years of MPI Manufacturing Study (a study conducted by the Manufacturing Performance Institute), food processors were the least likely to engage Lean manufacturing techniques. In fact, it was found that only 5o percent of the plants surveyed used Lean processes compared to 88 percent of plastics and rubber manufacturing engaged in Lean. And when it came to continuous improvement programs, food manufacturers were least likely to participate in CI programs.
So what does all this point to?
Simply stated, food processors are under the gun to produce compared to other industries. When comparing cycle time of food processors to overall discrete manufacturing plants, food manufacturers have the shortest cycle time at a median of 5 hours. Compare this to a median 18 hours at other manufacturing plants. Now add to that, the median on-time delivery rate of 98 percent compared to 95 percent for all others, and you can see that food manufacturers clearly don’t have time to take a breath.
And that creates cycle of reactive activity that puts food processors at a distinct disadvantage with the lowest median machine availability of all manufacturers surveyed at 83 percent. And to make matters worse, food manufacturers were the most likely to increase output in 78 percent of the plants surveyed.
The demands of increased output require investment in machinery, technology and skilled labor to operate and maintain it. And unlike manufacturers of the past, not all manufacturing functions are considered core. In fact, clearly 96 percent of all food manufacturers outsource some functions already and many are already considering outsourcing maintenance.
This trend makes a lot sense provided food manufacturers select the right provider. The benefit to selecting a professional outsource provider can put a production constrained food manufacturer on the path to Lean quickly. This is accomplished systematically through establishing metrics for OEE, machine availability and meantime between failures to name a few. All of these key metrics coupled with a proactive culture brought to bear by an outsource provider can have a dramatic impact on productivity. In fact it is not uncommon to see manufacturing output rise by 30 percent or greater. And in a capacity constrained business that adds up to changes you can measure in dollars and cents with more product out the door faster.
Outsourcing production maintenance also helps provide a solution for the shortage of skilled labor currently found in maintenance organizations. In a recent survey sponsored by Advanced Technology Services through Nielsen Research, 46 percent of manufacturing executives surveyed said finding skilled maintenance professionals was the most difficult of all positions to fill. Additionally, 70 percent said that production maintenance was very important in achieving Lean manufacturing. And to top it off, the same group said that of all activity that can increase productivity in manufacturing ahead of improved safety and new equipment, maintenance ranked number one.
The availability of skilled labor, increased complexity of the equipment and the need for uninterrupted downtime are all issues food processors are facing. So, as food manufacturers wrestle with the demands of a growing industry, making the decision to outsource production maintenance for increased output and efficiency needs to be considered.
For more information, visit www.advancedtech.com.