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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“With size!” Young shoots back. “All the industry consolidation of recent years begins to make sense. When a company gets large enough, it can spread its total investment across many businesses, brands and lines. A company will be able to afford risk in a given product area because each product comprises a smaller percentage of the company’s overall investment. The company will be willing to take a risk with a given product line because the impact of making a mistake will be reduced. In an environment of more risk taking, technology will flourish.”

People issues

While the food industry could raise its collective level of automation, lights-out, unmanned factories are nowhere on the horizon. People remain the key component in making our food factories run. From the higher-level, engineering-oriented college grads orchestrating the processes to machinery operators with their hands on those processes, people must be attracted, trained and maintained to run our industry.

Labor concerns have been the No. 2 worry in all four of our annual Manufacturing Trends Surveys, annually behind food safety. “Competent technician availability – it gets tougher every year,” an executive at a North Carolina meat and poultry plant wrote last year. “We as an industry need to improve our recruiting in technical colleges for technicians.”

“Our ability to understand the needs of our workforce and engage them at all levels will create competitive advantage,” says ConAgra’s Hardy. “Our understanding and complete embracing of diversity as a means to drive business performance is paramount to long-term business growth.”

That sounds great, but diversity comes with a price. “From the workforce side of the business, I don’t see how this is going to be possible if we are managing facilities where as many as eight or nine different languages are spoken,” says Kramer. “Imagine the cost to create enterprise-wide solutions where each operator interface panel has to have multiple language capability. Imagine the training cost. Ultimately, our ability to implement state-of-the-art manufacturing systems may teeter on our ability to overcome communication barriers.”

At the higher end, Young expresses concern over the industry’s ability to attract good engineering talent. “In recent decades, we have broken the old paradigm of the best people going to the older, mature companies,” he says. “The best and brightest and most creative people can’t spread their wings in a tight structure geared to maintaining what is. Today, many of these people are bypassing both the universities and the Fortune 500 companies because what they envision -- what they want to do -- cannot be developed there.

“Why? For one reason, in recent years, we have broken the social contract. Food companies, like many other American industries, moved away from the higher educated employee, the engineers, research folks and the long-time workers that comprised their brain trust. Young people wonder what happened to the security their fathers and grandfathers had in their jobs. This is the first generation since World War II that thinks it may not be moving economically forward. But many are learning to embrace this environment we are in. The risk is greater today. But the good news is that the upside is bigger.”

How will our industry attract dynamic, creative people?

“You offer them a stake in the future, shares in the company. Innovative tech companies have done just that,” continues Young. “We are not seeing this in the food and beverage industry yet because our industry has not been on the leading, bleeding edge of technology. In industry in general, the best and brightest are moving into infrastructure development, process control and information management.

“The industry will have to change. Improving productivity alone will not drive our industry. New ways of doing business will,” he says. “A change in culture is coming, and it will be the most exciting thing we’ve ever seen in the industry. As a business executive, you must marshal your resources; get yourself into position to act, to absorb risk, to prosper.

“A lot of companies have been amassing cash, waiting to invest,” Young continues. “The problem is they are not sure what choices to make because these are big choices. Not just changing the flavor of a product, but changing how we do business. Imagine the changes in the industry over the next 100 years!”

A little help from my competitors

It took a long time for food processors to realize they have more in common than target customers. Today, more and more companies are sharing success stories with their competition, even if only in non-proprietary areas.

American Meat Institute (AMI) members declared food safety a non-competitive issue in 2001. Since then, they have shared data, systems, technologies and strategies to reduce threats of microbiological contamination and other threats to the safety and integrity of the food supply. They have invested millions of dollars in research as well.

Member companies of the Northwest Food Processors Assn. have developed “core competency” standards for industry jobs and are now sharing energy management tips. Such association efforts are multiplying, and the typical response to “common cause” issues is becoming more open.

Similar, though limited, cooperative efforts have taken place through food industry associations for years. What is different today is the openness and degree of sharing between competitors. More significantly, the openness goes beyond industry health and welfare.
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