Competition in the food and beverage market grows more intense every day. The manufacturers that feed the world are being pushed to provide new products in a low-cost, fast and efficient method. As a result, the profits of successful food processors are heavily influenced by the performance of their manufacturing lines.
One common cause of low performance is poor equipment integration and commissioning. Poor project integration is commonly the result of picking the wrong project execution methodology.
Consulting engineers are working with food and beverage clients to meet the demand, designing and providing construction services for new production lines to meet stringent requirements for performance, high utilization and high efficiency.
While they may know the principles of engineering, they don't know your process or the unique needs of your company and your plant. The following is about what you need to understand and the choices you need to make to help those consulting engineers work their best for you.
When implementing new manufacturing line projects, the two ends of the execution spectrum are turnkey and design-bid-build (DBB). Each of these methods has advantages and disadvantages. Consulting engineers can advise and implement projects that have a variety of execution strategies. But the selection of the strategy ultimately is up to you. Here’s some help in finding the strategy that best fits your needs.
Is turnkey right for you?
Turnkey projects are those in which one vendor provides equipment, installation and commissioning services under one contract. This method replaces the need for in-house technical staff to manage capacity increases, plant upgrades and product changes.
- Fastest method for completing a standard project by providing opportunities to optimize parallel activities.
- Provides owner with one point of responsibility.
- Someone else can make equipment decisions for the inexperienced owner.
- Useful if one manufacturer can supply equipment for the line.
- Reduces administrative costs by combining the procurement process for equipment, line design, construction and commissioning.
However, there can also be disadvantages to turnkey projects:
- Little owner flexibility to select equipment providers.
- Provider may not have experienced designers and engineers who understand the unique problems of the owner's manufacturing environment.
- No opportunity to provide supplier competition for mid-stream changes.
- Changes are more expensive due to fast-tracking.
Original equipment manufacturers (OEM) can be poor executors of packaging processes, because their thinking is more machine-based than system- or process-based. OEMs that understand integration have skills that generally are centered on their own equipment.
For a turnkey integration project to be successful, team concepts such as commitment, communication and trust must be established early in the process so decisions can be made. The owner must be prepared to relinquish control of quality and details which will be handled by the turnkey supplier.
Whoever the turnkey supplier is, the project leader should be a "devil's advocate" to assure the manufacturing system truly meets all of the production and operational requirements. True turnkey integration specialists are a rare breed, but if they are part of the owner's team, the results are consistent and profitable.
The skinny on design-bid-build
The other school of project methodology is design-bid-build (DBB), which generally requires the owner to provide the major equipment and to work in conjunction with a design firm that provides detailed designs.
The owner bids installation with the design firm's assistance, and then hires the installation and commissioning services from vendors directly, while the design firm provides oversight. Such project scopes as building expansions, innovative package design, the latest process and packaging equipment, major piping efforts and plantwide tie-in require special engineering understanding that is not usually the specialty of turnkey providers.
Advantages for DBB include:
- Offers the greatest flexibility for an owner to control cost, design and schedule issues.
- Works very well for projects where manufacturing flexibility, process changes and innovative products are scoped and installed.
- Changes and uncertainty in a project do not have large cost impacts since the project evolves over time.
While the specialized knowledge of design firms coupled with owner flexibility may be a great fit, it is important to note some potential challenges to the DBB process as well:
- Responsibility limits may not be clear.
- Costs and schedule may not be optimized.
- There is an increased probability of responsibility disputes and owner involvement cost.
Somewhere between turnkey and DBB is a spectrum of integration solutions that combine the best of both worlds.
Multiple turnkey suppliers can be assembled to provide different aspects of a project. For instance, one supplier could provide all packaging systems, while another provides the building expansion and a third supplier takes care of electrical distributionn and infrastructure upgrades
Engineering firms specialize in recommending optimum solutions to manufacturing challenges - whether the investment includes purchasing a new production line, consolidating operations or upgrading existing production facilities. Consulting engineers can provide a strategic integration plan for blending the right execution methodologies whether it is turnkey, DBB or somewhere in-between.
Whatever project methodology a manufacturer chooses, there are four basic phases to consider in every manufacturing project. The four phases are design, procurement, construction and commissioning.