Unlock greater value

Food producers face a number of challenges in an ever changing business environment. Many cost variables out of their control. Raw material and commodity prices are volatile, raising capital can be difficult, retailers want lower prices and longer payment terms, and there is an overcapacity of supply. Johan Paulsson, head of asset management services at Tetra Pak, discusses some solutions to these woes.

With all the difficulties and challenges that beset food producers, it is crucial that they optimise elements within their businesses that are under their control. This is essential to deliver real and sustainable business value, and implement an asset management programme that provides manufacturing companies with the framework to unlock greater value from the use and operation of their assets.

Asset management looks at short and long-term measures, assessing the entire value chain of a business to identify opportunities to extract as much value as possible. While operating in today's environment is tough for producers, asset management can provide a way to deliver sustainable profitability from operations and improvements in performance to support the bottom line.

Asset management offers a number of significant benefits for manufacturers. For example, it facilitates the execution of long-term strategic initiatives such as cost reduction or improved plant use. This is because the goal of asset management is to enable an organisation to deliver the right quantity of products at a high quality with a continuously improving, competitive and sustainable cost. It considers the short-term demand for performance and operational excellence against the longer-term investment requirements of the asset base.

These benefits are delivered through the establishment of an asset management system. This consists of processes, methodology and IT tooling, which create alignment and a common understanding of what activities create value for the business.

The industry is already aware of these benefits, and many manufacturing companies are taking action to optimise their operations. However, the full potential of asset management has yet to be realised as organisations predominantly continue to focus on day-to-day activities.

Subhead: Better decisions

In fact, there are multiple measures that can help further improve optimisation. For instance, to unlock greater value, producers need to take advantage of the current data-rich environment. This will enable the right people within an organisation to use the information available to assess the risks and make better evidence-based decisions.

Another key step is ensuring that manufacturers align activities and their thinking across the whole business, as opposed to taking the common departmental or divisional approach - working in silos - to reach their goals. This is achieved through integrated decision-making, ensuring that objectives are mutual and creating a transparent flow of information.

Additionally, manufacturers need to continue moving towards the digital age by connecting equipment on factory floors to computers and the internet. This will allow the efficient collection of advanced forms of data on the performance and health of machines, helping to inform next steps. For instance, the computers can calculate and outline when equipment components need to be changed. Therefore, manufacturers can act in a timely manner to ensure that disruption in the overall production process is limited. This is because the information can be accessed through tablets and android devices at factory sites and combined with surrounding data sources.

By introducing these steps, producers can unlock the full potential of their asset base. At Tetra Pak, we have delivered 11% reductions in operational cost though improvement projects to date. Furthermore, we have helped customers achieve an average increase of 9% in asset use in each project.

Overall, asset management programmes provide businesses with the opportunity to derive further profitability from their operations. In a world where manufacturers are facing a number of challenging headwinds, it can be a welcome way of improving operational performance sustainably and reducing manufacturing costs.