Vision 2020: The pressure is on from the ‘thinning’ of manufacturing

Consolidation through mergers and acquisitions, budget cuts, job reductions, and a host of other cost-cutting measures are designed to improve profitability. But what effect do these measures have on manufacturing operations? Part two of a five-part series

PMMI's Top to Top Report
PMMI's Top to Top Report

As mentioned in part one of this Vision 2020 series of articles, there appears to be no relief in sight regarding the proliferation of SKUs and new product development in the food and beverage industry. Most industry professionals predict the demand will grow even larger.

At a time when consumer demands are growing and more is expected from manufacturers, the “thinning out” of American manufacturing exerts tremendous pressure on consumer package goods (CPGs) companies. Some of the dynamics include consolidation through merger and acquisition, significant cost cutting and job reductions, doing more with less and a host of other cost cutting measures designed to improve overall profitability and increase shareholder value.

As part of its ongoing outreach to CPGs professionals, PMMI conducted focus groups with 65 CPG participants last year. Topics included process improvement, workforce development, machine operations, procurement, global demands, equipment trends, sustainability, maintenance, lean manufacturing and many more.

In addition, PMMI’s Top to Top Summit held earlier this year provided an opportunity for CPGs and OEMs to discuss not only the focus groups’ findings, but also ways to address critical challenges facing the food industry.

Although not all of the participants in PMMI’s Top to Top Summit have experienced it, most concurred that thinning exists and is exerting considerable pressure on engineering, operations, manufacturing and a variety of other functions at CPG companies. In many instances, there is simply much more to do and fewer people to do it.

CPG companies often suffer not only a significant loss of knowledge transfer but also a loss of institutional knowledge as a result of the thinning trend. In many companies, innovation has been stifled. But loss of head count is not the only problem; it’s the quality of staff lost that is impeding successful operational development.

According to PMMI’s research, OEMs want to help keep plants running efficiently by using remote monitoring, but often times CPGs refuse to implement it. In contrast, other manufacturing industries have embraced remote monitoring. In order to convince CPGs of its merits, OEMs must provide ROI metrics to clarify the business case for remote monitoring. Maintaining the right partnerships, getting the right people involved and providing the right on-going training will make remote plant monitoring a success.

But identifying and hiring the right staffing is also a great challenge for CGP companies today. Although progress has been made, there is the continuing challenge of getting cross-functional teams working together and focused on tactics.

Many companies have tapped recent CPG company retirees to fill the gap. Others rely on automation technologies. But here’s the catch—increased automation often means higher skill levels are needed on the plant floor to perform the work. Another solution is to improve employee engagement skills.

The Top to Top Summit concluded that to battle the thinning phenomenon, CPG companies must get more out of their existing staffs, improve training, allow remote access, take advantage of standard work methods, use outside resources such as retirees and integrators, and speed vertical start-ups with the use of factory acceptance testing (FAT). 

Part three of this five-part Vision 2020 series on today’s manufacturing challenges will focus on managing capital spending through total cost of ownership (TCO).

Resources:
Download PMMI's Top to Top report.
 
To attend OpX Leadership presentations on  TCO, FATs, OEE and more on the Innovation Stage at PACK EXPO International in November, register here.
 
For more information on current industry challenges and solutions from PMMI, visit OpX Leadership Network.
 
Read part one of the Vision 2020 series: Efficient changeover still one of manufacturing top challenges.
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