Set among more than 50,000 acres of pistachio and almond trees and supported by cutting-edge processing facilities and a strong grower partner network, Paramount Farms, located in California's San Joaquin Valley, has emerged as the world's largest vertically integrated supplier of pistachios and almonds. And one of the busiest. Among other projects, the Lost Hills-based Paramount is constructing a new almond processing facility and expanding its pistachio operations.
Paramount Farms, located in California's San Joaquin Valley, is the world's largest vertically integrated supplier of pistachios and almonds.
Although it currently processes about 60 percent of the total U.S. pistachio crop, Paramount has aggressive growth plans and, as such, recently realized it needed to revamp its grower receiving process and technology in order to accommodate increasing amounts of product entering its facilities. All products must be received, graded, initially processed and stored within a short time frame.
"The big issue with a pistachio harvest is that once it starts you cannot stop it," says Dave Szeflin, Paramount's vice president of operations. "Due to insect and moisture concerns, the nuts need to be shaken from the trees, shipped, received and processed within a narrow window of time or you have to start worrying about product degradation. Average green (wet) incoming harvest is about a half-billion pounds over a six-week period."
Along with increasing production rates and improving quality assurance, Paramount recently implemented a comprehensive grower receiving process that begins at the scalehouse and ends with an integrated grower payables application. "The old system simply could not handle our current volumes, let alone those we're forecasting for the next few years," says Szeflin. "Any time we had a problem with the old system, IT personnel would have to touch every workstation involved in receiving, a time-consuming endeavor when you consider that trucks were lined up to be received. We recognized the need to build a better process and be creative in applying new technologies to support our position in terms of vertical integration, volume capacity and grower partner relations."
Anticipating larger harvests and facing a decrease in seasonal workers, Paramount developed a new receiving system to increase product throughput and reduce processing costs. The new software-based system relies on radio frequency identification (RFID) tags to track the status of pistachio loads. Each trailer bringing in a load of pistachios is equipped with a RFID tag that tracks its status, location, license plate number and tare weight.
Along with anticipated boosts in volumes over the next several years, Paramount faces a decrease in the number of seasonal workers available for its immense harvest and processing efforts. Szeflin and his team, including process engineering and technology experts from supplier MagTech Systems Inc., were charged with devising a new receiving system that would increase throughput of pistachios while reducing total processing costs and eliminating non-value added tasks.
New process, new technology
The technology incorporated into the system includes hardware and software all integrated for the first time within a Web-based environment, allowing for distributed use of the technology with centrally located servers across processing plants at Paramount's 140-acre main facility in Lost Hills and a second Southern California location. Paramount's IT team can now quickly and efficiently respond to system issues at multiple sites.
"We relied on MagTech's process improvement and food industry expertise to streamline a very complicated grower receiving process and then counted on their team to integrate and implement the various technologies to make it easy to use and support while utilizing as much of our existing infrastructure as possible," says Szeflin.
Handheld wireless bar code readers are used to associate each load of incoming pistachios with a debris-and-product sampling collection line.
Each trailer-load of pistachios is equipped with a unique radio frequency identification (RFID) tag that tracks its status, location, license plate number and tare weight. The new software includes drop-down lists and pre-defined data attributes that abbreviates the data- acquisition process. By reducing the amount of paperwork and manual data entry steps required, the transaction time for initiating a new load has been cut by 60 percent. The resulting increase in trailer throughput prompted Paramount to scrap expansion plans for its scalehouse facilities.
"By analyzing the information from the RF tags, our operations and finance teams have been able to optimize our equipment scheduling and utilization planning to reduce the number of trailers we need to lease by 30 percent," says Andy Anzaldo, Paramount's director of grower relations.
The RFID tags are read by scanners positioned next to the truck scales, and allow operators, located inside the scalehouse, to quickly initiate receiving and weighing tasks. At each step throughout the receiving, grading and payables process, all manual data entry has been eliminated or significantly reduced to accelerate the speed of information flow and remove the risk of error.
Handheld wireless bar-code readers are used to associate each load of incoming pistachios with a debris and product-sampling collection line. With integration software developed by MagTech, the grower receiving system manages the debris (branches, leaves and other organic material) collection and measurement tasks of each line in conjunction with Allen-Bradley PLCs and various scales to generate bar-coded sampling tags and capture trash weight data. As the bar-coded tags are scanned, weight and other information pertaining to the load is transmitted to the application's servers, ensuring real-time data capture and up-to-the-minute reporting capabilities. Operators and group leaders can access turn time and operating efficiency reports and make line-balancing and resource-allocation decisions on the fly to keep the pistachios moving. All of this occurs with adherence to internal processing specifications and good manufacturing practices.
Samples taken from each load are tagged and processed for grading. Following Paramount's stringent hulling and drying procedures -- monitored by SPC Online statistical process control software, also licensed from MagTech Systems -- each sample is weighed and hand-graded. Internal inspectors and USDA personnel audit the grading process and use an easy-to-interpret move matrix graphical interface component of the receiving system to track the performance of each grader. This information is used to support Paramount's continuous improvement and training initiatives as part of its ISO 9000 certification practices. With additional weigh-scale and wireless scanner integrations, the grower receiving system monitors the various grades of nuts within each sample. Grower Receipt reports are generated and distributed to grower partners for each load received, processed and graded.
Coupled with the new technology, the streamlined process has allowed Paramount to reduce the seasonal processor headcount by over 30 percent. In the short-term, the processor has realized operating cost reductions and, more importantly, overcome the daunting challenge of maintaining quality while processing more pistachios amid a shrinking seasonal labor pool.
Payments to partners
Along with better production-side management of its transactions with grower partners, Paramount's new receiving solution includes components that enhance the accuracy and timeliness of payments to them. The payables software modules leverage much of the relevant information gathered during the receiving and grading processes, as well as grower partner contract data -- such as advances and interest payments -- extracted from various repositories. It then calculates payable figures and generates financial and management reports at the load, field, grower-partner, processing plant or enterprise levels. Plans for enhancements to the system include integration of the payables component with Paramount's financial systems, such as J. D. Edwards software.
One of Paramount's key goals is to find ways to augment and support its relationships with its more than 350 grower partners. Paramount's objective for the first harvest with the new receiving solution was to make the entire process transparent to growers at each touch point. However, its long-term plan is to enhance the existing system to increase the ease and frequency of partner communications with tools such as secure self-service Internet access, reports and other information. Not only will this strengthen relationships, but also continue to impact the bottom line by driving down costs and reducing communication transaction times, as well as the number of open issues and discrepancies encountered during harvesting and receiving.
"The ability to quickly share reliable and accurate receivables and payables information with our grower partners is essential, " says Anzaldo. "Given the improvements we have already seen this year with the new tools, we expect to realize a 50 percent decrease in the number of requests for information. With the implementation of a self-service Web site growers can access key reports and information to manage their harvest more efficiently and cost-effectively.''
In the near future, Paramount and MagTech plan to enhance the process and supporting tools to get closer to a paperfree system. This should allow Paramount to reduce possible points of failure in the grower receiving system by reducing its dependence on paper labels and tags, which are prone to being lost or damaged in any manufacturing environment. At the same time, Paramount will continue to adhere to state-regulated guidelines for information and certification documents.
Paramount plans to extend the reach of its receiving system beyond the arrival of delivery trucks. Real-time access to tracking data over a valley-wide wireless network will allow the processor to better manage harvesting and delivery schedules and move towards more of a just-in-time process to ensure the quality of the pistachio crop. Paramount's vision is to deliver the grower receiving information to its personnel via a Web-based operations portal.
Like many processors, Paramount is striving to apply consistency throughout its process to ensure uniformly high-quality end-products. Accordingly, Paramount intends to achieve tighter integration with its existing process management system, MagTech's SPC Enterprise suite of products. In a check-and-balance relationship, the grower receiving system will check and track the quality of product entering Paramount's storage silos while the SPC products will track the quality of those same nuts as they are being processed for final shipment.
California pistachios, which accounts for 98 percent of the total U.S.crop, have seen huge rises in volume recently, with 2002's final harvest estimated at 300 million (dry) pounds --- a 33 percent increase over the average for the previous two years. Supply of U.S. almonds has also grown substantially, doubling over the past 10 years. California almond production is expected to reach nearly 1 billion pounds this year, making up 75 percent of the worldwide supply.