2015 Manufacturing Trends Survey: Better Days Ahead

With the worst of the Great Recession behind them, food production professionals entered the New Year with fewer questions and more answers about their companies’ and personal paths forward.

By Kevin T. Higgins, Managing Editor

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“Our organization has an Ideas program in place where staff is encouraged to generate and submit ideas that elevate our organization,” volunteers Andrea Carlson of Morton Salt Inc. “Sometimes compensation is given for ideas, depending on the outcome.” Her company also is a Kaizen practitioner.

Lean manufacturing remains the most popular continuous-improvement approach, with a third of respondents indicating they apply lean principles. The use of OEE (overall equipment effectiveness) data to drive improvements fell to about one in 10, almost half last year’s level, and notable declines in 5S and value stream mapping also are evident. A marginal uptick in Kaizen was registered, though events still occur at fewer than one in five facilities.

A greater emphasis is being placed on employee training in sanitation and food safety practices, with almost three-quarters saying training is a focus. There also is more emphasis on pest control programs and the use of equipment with effective sanitary designs. Only two in five say third-party certification or a focus on the HACCP program is part of their food-safety strategy, down 5-10 percent from a year ago. Only one in seven are engaging outside experts and consultants, down from almost one in four.

Implementation of the Food Safety Modernization Act is on many food professionals’ minds, making it one of the top three issues in 2015. The Global Food Safety Initiative (GFSI) is the self-policing alternative to tougher regulations. Implementation of GFSI-sanctioned certified standards barely budged in the past year, with respondents roughly divided into thirds between those who have been certified, those who are considering certification and companies that have not sought certification. Among non-U.S. participants, almost half have not sought certification.

SQF, the safety standard owned by the Food Marketing Institute, remains the most popular GFSI option. Half of respondents who have adopted a standard opted for SQF level 2 or 3, down from three out of five last year. The UK’s BRC standard increased its client base to 27 percent, and IFS doubled its penetration to 16 percent. FSSC 2200 is the standard for one in 10. (Multiple standards are used at some diversified food companies.)

Among non-U.S. respondents, standards adoption is evenly split between IFS, FSSC and BRC. SQF certification was achieved at only one firm.

Next-gen staffing

American manufacturing is in the midst of a workforce generational change. The Social Security Administration estimates 48 percent of supervisors will be eligible for retirement this year, and many will join the annual wave of 4 million baby-boom retirees in each of the next 11 years.

Some food companies will be blindsided by staffing shortages, the survey suggests. Asked what their organization was doing to address the issue, more than a third checked, “Not much at all — just hoping for the best.” Among the more proactive, slightly more than half indicate partnerships with community colleges and trade schools are either being expanded or discussed. Half also participate in job fairs and campus recruitment programs.

Apprenticeship programs for skilled positions and mentoring of high school and college students are in place at more than a third of the proactive companies. Only one in 10 is working with trade unions to attract skilled workers, and 15 percent have outreach initiatives to junior high students in science, technology, engineering and math.

Less complacency is evident in meeting the here-and-now need for skilled workers to keep automated systems running. Only one in five organizations is failing to address the issue. The most common strategy is expansion of in-house technical training, followed by recruitment of maintenance technicians. One in five is increasing in-house engineering capabilities.

State and local grants for job creation can help address the skills gap, notes Laurie Keeler, R&D director and a principal at Monument Foods LLC, a wholesome-snacks processor. Working with economic development agencies that provide those grants can help attract the skilled workers needed to make “the leap from artisan production to the next level,” she says.

Cheap energy is tamping down enthusiasm for green initiatives in some quarters, though the vast majority of food companies remains committed to resource reductions. Half of respondents say sustainability initiatives have the same importance now, and one-third say they are becoming more important, the same ratios as last year.

Plentiful supplies of natural gas make it difficult to get a return on gas consumption-reduction efforts, with one in 10 respondents indicating gas efficiency projects are on hold. One-quarter say there are no energy-related projects in the works at their plants. Half of the other plants are seeking reductions in electricity consumption.

“We installed motion detectors in all of our warehouses, along with LED lighting,” offered one dairy processor, adding, “A few times a year we power down any unused equipment.”

The survey presents eight specific actions to alter an organization’s energy profile. One-third of the energy-aware companies were pursuing at least three of them. Energy use monitoring was the most popular, followed by lighting efficiency projects. One in five factor energy consumption into total cost of ownership calculations for new equipment, and almost as many have instituted goals for reducing energy inputs per ton of finished goods. Almost one in six are considering options for on-site power generation.

Supply chain issues, new regulations and other factors will challenge food companies and add complexity to the job of production, but managers are tackling them with greater confidence and assurance.

“Most (managers) realize they need to be more productive,” observes Steve Kornman, a food safety consultant who works with large and mid-sized processors. That goal won’t be achieved with machines and automation alone but with recognition of “the importance of employee loyalty,” he wrote. “Happy employees are more productive employees, plain and simple!”

The recent economic upheaval created stress for both individuals and organizations. As normalcy returns, the conditions for productivity gains are becoming more favorable.

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