Assuming a food & beverage company can get the credit or find the cash, it’s a buyer’s market for plants seeking to add new manufacturing lines. But a primary hurdle remains, which can be summed up by this variant of a famous Bill Clintonism from the 1992 presidential campaign: It’s the stupid economy.
As the summer of 2009 peaks, food & beverage executives are as nervous as any business leaders across the industrial economy.
“The credit crisis is real,” says Marco di Gino, president of E. A. Bonelli + Associates (www.eabonelli.com), a food and dairy architectural and engineering firm based in Oakland, Calif. He has seen projects pared-down or halted at various stages, sometimes due to financing, even among companies “that used to be able to borrow $100 million with no problem.”
Others who can get the credit may nonetheless prefer to hold onto their cash reserves than capitalize on low interest rates. And contractor overtime pay, once an accepted means of achieving “priority one” — getting the project done quickly so the upgrades can begin paying-off — is beyond the pale.
Despite the uncertain economy, there are still measures plants can take when bringing on a new line. The best way to spend capital dollars on a project is to think big while spending small and to use automation to tie people and processes to management goals. Technology and management thinking are merging as high-performance, cross-trained work teams manage the plant floor using automation to synchronize their activities to serve front-office goals.
Lean beans at Starbucks
“There’s a lot of pressure on up-front capital — lots, lots, lots,” says Gerry Gomolka, vice president of process engineering for design/build firm Stellar (www.stellar.net), Jacksonville, Fla.
New-line installations in new plants have the benefit of following best practices from the start. Starbucks’ 117,000-sq.-ft. Sandy Run Roasting Facility in Gaston, S.C., completed in April, therefore presents a relevant example of the connection between corporate and plant management in setting up new lines.
“One of the things that was very key to the Starbucks organization was lean manufacturing techniques: how to drive out waste and how much value can be added to the product while getting it out the door more quickly,” Gomolka says.
Lean manufacturing is a generic management model based on the successful Toyota Production System. It seeks to limit capital investments and resource allocations to operations that are valued by the customer. In the context of production and product enhancements, if the customer won’t pay for the plant upgrade, it’s probably a waste of money.
The strategy is to add value to “the product itself,” Gomolka says, explaining value is added to the product in production, not in receiving or storage. “As it turns out, the product in most plants is only actually touched by production systems for about 30 minutes out of any operating day.”
Stellar was awarded the turnkey design/build contract for the new plant, which differs from other Starbucks other operations. Whereas older Starbucks plants manufacture to target inventory levels, this one primarily is producing to market demands in real time. The plant produces to orders that come in daily. “Where the big ROI comes in is that there’s no hold-up space for product in this plant; it goes directly to the supply chain,” Gomolka says.
How fast does the new plant get its coffee out the door? The Gaston plant’s six new roasting and four packaging lines can receive, roast, package and ship roughly 80,000 lbs. of coffee daily, while augmenting production at four more U.S. plants and one in The Netherlands. There’s almost no human intervention in the process until a tape gun hits the outer carton.
There are various economies involved when you design a plant or line for a compact footprint. Stellar and Starbucks reduced the Sandy Run plant’s footprint from an initial 154,000 sq. ft. to 117,000. While it’s the second smallest of Starbucks’ plants, the Sandy Run facility is the most efficient — it produces more than three times the product per square foot than any of its sibling plants.
There are many components to the trend toward “smaller.” Lean manufacturing, mechanical trends, automation and training the workforce (including management) to make the best use of it, then, all tie into the 2009 definition of better-faster-cheaper.
In addition, with pressure to spend less on construction, “process equipment people are responding with more compact mechanical systems that do the same thing they’ve always done — often running at higher rates — but in smaller footprints and at a lower cost,” says Lloyd Snyder, senior vice president-food & beverage at Woodard & Curran, (www.woodardcurran.com) a Portland Maine, engineering firm. The result is that equipment can be close-coupled, buffers can be eliminated and processing can operate more continuously.
In bottling, for example, blow molding and filling lines traditionally have been separate processes in the plant, or often at two separate facilities. “Today, bottlers are coupling them together next to each other, where they are not only mechanically coupled, but electronically synched,” Snyder says.