The 21st Century Food Manufacturing Organization

Five years into the new millennium, a handful of manufacturing visionaries assesses the current state of American food processing and whether it’s prepared for the future.

By Mike Pehanich, Plant Operations Editor, and Dave Fusaro, Editor in Chief

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One of the most acute concerns in manufacturing circles is the engineering function. “The role for engineering will expand beyond traditional project work,” predicts Dave Kramer, vice president of engineering in the Cincinnati office of Sara Lee Foods (www.saralee.com). “The entry-level engineer will need to add personnel safety, environmental compliance, food safety, HACCP, finance, sanitary design, sanitation technology, new product development, logistics, information technology and customer interface skills to his resume in order to climb the management ladder and work effectively across the enterprise.

“I don’t foresee expanding engineering departments in the food industry,” Kramer continues, “so this will require us to develop strong partnerships with outside engineering firms because the shorter timelines we have for projects and the increased complexity of projects will prohibit us from shopping for engineering. We will need firms that know our standards, know our people and facilities and can turn on a dime to service our needs.”

“Engineers in the coming age will change from guardians of the gate to champions of change,” adds Young. “Engineers want to create. They want something exciting to do. If we don’t let them, they’ll go somewhere else to invent. Whether they will ultimately settle in food companies, engineering firms, equipment companies or somewhere else has yet to be determined. If the food companies don’t give them the opportunity, someone else will.”

But if we let engineering and R&D loose, will they show us how to use technology to get incremental value?

“We will see engineers in our industry displaying a technological leadership our industry hasn’t seen,” predicts Young. “Outside engineering firms have brought fresh solutions to food operations. Our [Lockwood Greene’s] engineers get the chance to work in a large variety of industries, such as pharmaceutical and chemical and power. They are cross-fertilizing industries, bringing to food plants ideas from other industries. No matter where food companies get their engineering, they will need to draw from this bigger pool of resources.”

Changing the minds of leaders

It’s all well and good to have these energetic young engineering minds changing the very core of our business. Who’s going to give them that power? What will spark this drive for technological leadership?

“Circumstances will change the minds of the stakeholders,” says Young. “As conditions change, management has to change as well. Companies will be required by circumstances to change their functional leadership to continue to gain economic advantage.

“One of the biggest problems we face today is that circumstances are changing as quickly as everything else. Management sees its long-range strategies moving so fast they become short-range strategies before they can communicate them. Organizations will have to remain flexible. Managers will have to anticipate these changes. They will have to be more aware of how technology changes our business and our lives.

“Corporate leadership is on the verge of functional realignment,” Young continues. “No one person can be the leader of a company forever anymore. Leadership is about having a vision. All functional areas create a vision from their own unique perspective. Over time all industries undergo change in perspective. Circumstances can change your perspective, which in turn can change your vision on how to compete.”

“Staying creative, innovative and competitive requires the knowledge of what in your process actually needs to change and what should remain constant,” Larry Wu, R&D director at Starbucks Coffee Co. (www.starbucks.com), Seattle, said at the 2004 IFT Meeting and Expo. “Managers need to identify and understand the key ‘truths’ about their company makeup. These truths are found in their company DNA, their master blueprint for how they operate. Unlocking that understanding of their core competencies, their comfort zone, their structure, their organization and their investment strategy all help to determine what changes need to be made in their new product development strategy or, more drastically, to the company’s DNA in order to stay competitive.”

Sara Lee’s Kramer adds one more very current factor: “Obviously, in the Sarbanes-Oxley era, this will require new management skills, new documentation efforts and a rigorous adherence to the highest moral and ethical standards to succeed.”

Managing data…and risk

Nothing has changed our industry as have information technology and process control. Productivity improvement today resides in information control, not just in high-speed manufacturing equipment. Much of the success today relates to how well we can manage data and drive down decision-making. These systems are key to eliminating the huge overhead systems that once characterized the industry.

“By their very nature, businesses maintain a strong resistance to rapid change,” says Young. “To get a payback on the investment in new technology we need time to recover from change. In the future, however, engineering and R&D will be driving the changes in how things get done. So we will cover risk and payback by going after products that deliver higher margins. To get the higher margins we will have to add more value to the foods we sell to consumers. Today, technology is allowing the primary processor to do just that and this in turn is increasing their value proposition.”

How will we balance the risk?

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