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Mondelēz on Trade Show Machine Procurement Strategy

John Walker, senior director, Manufacturing, Supply Chain, and Infrastructure Investment at Mondelēz Europe GmbH, talks with Packaging World about how he approaches big industry trade shows, what new tech is on his radar, and more.

Mondelēz’s Procurement Strategy

While at interpack in May, during a Nestlé Waters presentation on predictive maintenance, I noticed a CPG logo on a fellow attendee’s shirt. I took a chance on striking up a conversation with the man in the Oreo Cookies polo, and he turned out to be John Walker, senior director, Manufacturing, Supply Chain, and Infrastructure Investment at Mondelēz Europe GmbH. He said that he felt like “a child in a toy store” at these big packaging equipment trade shows, and was gracious enough to share what he’s looking for in equipment suppliers, how he prioritizes what he sees as future-leaning technologies, and areas where he sees the most innovation. His approaches and insights should be instructive to fellow brands and technology suppliers alike, especially as we embark on PACK EXPO Las Vegas.

Packaging World:
Give us a brief overview of what you do at Mondelēz.

John Walker:
The short answer is the machines, the nuts and bolts, and nothing to do with materials, ingredients, flavors, or sugars. I’m based in Switzerland, and my team is responsible for the acquisition of those equipment assets, working with the engineers and the plants. We work with the suppliers and try to make sure that we have a good relationship, and a good asset acquisition strategy.John Walker on Mondelēz’s Procurement StrategyJohn Walker, senior director, Manufacturing, Supply Chain, and Infrastructure Investment at Mondelēz Europe GmbH

Why do you come to major events like interpack or PACK EXPO?
Outside of these types of events, you can very seldom see multiple suppliers in a such a short period of time. There’s a tremendous advantage to getting around these shows. You see equipment, you see assets, you see solutions, and you see things that you wouldn’t necessarily see otherwise, because some of these technologies aren’t currently being used for your products. You see things that others have tried, you can benchmark, you can borrow ideas, and replicate what others have done successfully. You also get to see companies you might not know of. We have a certain set of partners, but here we get to do a bit of exploring to augment our portfolio.

So you’re always keeping an eye out for new suppliers, why is that?
It’s no secret that a big factor is risk mitigation. The past few years have been very tough, particularly in automation, with tremendous shortages of components. We’re looking to broaden our selection, our portfolio of equipment suppliers. We used to have a much more narrow portfolio of suppliers, but we’ve broadened it to limit the risk. We can’t bet on just one horse.

What are you looking for at interpack? Anything in particular?
We’re looking for anything from a mixer all the way to the palletizer, essentially anything that produces food. The emphasis today was primarily on packaging equipment, and we’re getting more and more into the higher speeds And also, packaging solutions have to be much more flexible these days, with so many more pack sizes change. E-commerce is something we deal with more and more.

Sounds like SKU proliferation is on your mind, then?
In the old days, companies wanted to reduce the number SKUs because they wanted to reduce the complexity. But now it’s going the other way, and we’re constantly introducing new products, new pack sizes, and new varieties. It makes for an infinite combination of possibilities, so there’s a near-infinite portfolio of things we have to be prepared to make. You can’t do it all with existing equipment, so you have to you have to look what they’re showing us. The question becomes, theoretically at least, how can you make an infinitely variable portfolio, where you have an infinite number of options on your equipment? Because consumers are wanting and expecting more new product options all the time.

What specific machine capabilities does that translate to?
Rapid or fast changeover is becoming critical. In the old days, even as recently as 10 years ago, you could run longer batches. But now you have to be able to produce a larger variety of batches. And the challenge is you want to use that equipment; you don’t want it to be sitting idle as you’re changing it over. Rapid changeover is quite interesting, I liken it to a Formula One pit crews. If you look at the crew today versus 30 years ago, and then versus 70 years ago, you can’t compare them. Today, we try to literally make changes on the fly without stopping the machine. We’re not there yet, but it would be nice. Let’s say you’re making a chocolate bar and you go, let’s say, from 25 grams to 20 grams. It’d be nice to be able to do that without ever stopping the machine, right? That’s the vision right there.

What are the consumer drivers that are pushing this equipment trend?
You’re seeing a lot more at the at the further end, the downstream end, when it goes into e-commerce. If someone goes into and buys from a big-box retailer, we know what they’re buying. But when it becomes an e-commerce order, the customers there want a lot more variety in what they’re actually ordering. If it’s going through an Amazon or other online product service provider, those online sellers are creating their own portfolios of product offerings. Like in the example of the chocolate bars, instead of having a standard three-and two-product [multipack] format, they will want to make a four-and one-. They’re constantly shuffling. It puts the manufacturer a bit on edge, having to be able to provide that variety, that flexibility, because we don’t have it inherently. We never had to worry about it before. If you had a 72-count package, that’s fine. But somebody says, “Hey, can you do that, but in a 58-count?” I don’t know, but I guess we have to now.

These are things that are constantly pushing to the forefront, and I don’t see any evidence they’re going away. Some people thought it was a fad, but I don’t think it’s a fad. I think it’s here to stay.

Here at the show, I’m seeing lots of new materials being used, particularly in films, with monomaterials, fiber-based paper films, and compostables becoming increasingly prevalent. How is the advent of new materials affecting asset management?
It depends, but there’s always a solution. You can talk about things like sealing jaws. When you close the package, there are different temperatures, there’s different physical forces, retention forces, there’s a variety of different criteria. What us equipment people have to do when we’re dealing with the materials people is to ask, “What does my equipment need to do, to close or to seal that package, with your material?” Because the end of the day, we’re neutral on the material. I couldn’t care a millimeter less. But I have to make sure that if they say it’s a different temperature range, or a different speed, or a different who-knows-what, we have to be able to make sure that the equipment can do these things. And that’s not always the case. Sometimes the I get the impression that the film providers are maybe a step or two ahead of the machines. But then sometimes, I think the machines are a step or two ahead. I think it’s a constant in a leapfrogging in technology.

You and I just sat through a session from Nestlé Waters on predictive maintenance. Does that match up with some of what you’re doing at Mondelēz?
The Nestlé Waters presentation was right on the money because there’s a tremendous amount of maintenance and repair in what we do. It’s not sexy, and not a lot of people get interested in it. But there’s a tremendous amount of money to be had there, a tremendous amount of waste, and a whole lot of wasted manpower with people doing things they shouldn’t have to do. I think it’s actually a bigger opportunity than the actual asset acquisition. When I think of assets or liabilities, there’s still big-time untapped money there.

What we’re trying to push at Mondelēz is what we call AMPM, which stands for Autonomous Maintenance, Progressive Maintenance. If it’s done right, it’s done by the operator. In the old days, you’d tell them to change all the bearings on, let’s say, a belt. Now, you don’t necessarily need to change all of them as frequently as you used to, but you may need to change two or three of them even more frequently. It depends on a lot of factors and a lot of analytics.  What was interesting I thought, particularly, about the gentleman from Nestlé Waters is they’re trying to figure out exactly those data, those criteria to ask, “When do I do what I have to do?” It has been per schedule, and now it’s changing to as needed. And I think that’s the future because at the end of the day, if you do things based just on a schedule, you end up replacing things you don’t need to replace.

The analogy is that many years ago, when movie theaters use projectors with bulbs, they used to replace the bulbs every seven or eight weeks, whether they were burned out or not, because they didn’t want to burn out a bulb during a movie. But that was a tremendous waste. And to some degree, we were doing the same when we replace things like bearings that need not be replaced. Autonomous and predictive maintenance, which is driven by the operator, first off makes us more efficient because the operator knows best. And number two, we’re only we’re focusing on the things that are higher priority and the things that are critical. I think that’s really the future, and when you can do that, it means becoming more efficient at the plant floor.

What kinds of trends are you watching among your equipment suppliers?
The industry was going through consolidation some years ago, and it still is to some degree. No matter how many consolidations there are, there are always new players coming on. In fact, I’m constantly amazed that there’s always new companies out there. They may not be startups, but there’s always small and mid-sized companies that show up at these shows with a brand-new idea, a brand-new solution that you would not have expected to see before. It’s these upstarts, they’re coming out of left field, but you see what they’re offering and say to yourself, “Well, that’s pretty clever.” They’re not in every corner of every hall, but if you have your eyes and ears open, you can see them and that makes the trip worthwhile, right there.

Can you share any examples that you’ve seen here, without giving away your specific OEM or supplier reconnaissance?
The integration of the most modern automation components in primary and secondary packaging is the biggest leap forward I’ve seen. When you get all the way down to a palletizer, let’s say, that has not fundamentally changed. You’re still wrapping film around a pallet, and that goes into the warehouse. Where you get further upstream to where the product is being handled, and to the primary and secondary packaging, that’s where these advances are coming, in my view. They’re most evident and visible there. It’s now faster, it’s now more flexible, and it’s now lower cost, and you’re getting all three of those things. In the old days, they used to say, “cost, quality, and speed [of delivery], pick two, you can’t have all three.” What we’re finding is all three of them—it’s the speed, it’s the flexibility, and it’s the cost—all three dropping, which is an interesting intersection of the three of them. Moore’s Law [of a technology’s price trending down as quality and utility trends up, over time] isn’t a bad analogy.

As for a specific example, one thing I’ve noticed is that when they’re loading products into a carton, first of all it’s faster than it used to be. And now you can actually mix different product into the cartons, you can have a variety, you can mix product into the packages in different orders or in a different sequence. You couldn’t do that before.

Depending on how you configure the equipment—or the programming I should say—you could be loading cartons with red product, and then choose one pack to be half red and half blue, then go back to all red. And that’s just based on the on the commands being applied to the automation, without disruption and without stopping. That’s something where I don’t think industry has caught up to the tech. The technology is there, but we as an industry haven’t figured out how to use it yet.

I think it’s going to continue to get better, but I think we’ve only started.

How’s the show been for you?
When you come to a trade show like this, it’s almost like a child going to toy store. You say, “I’d love to have that, that, and that too,” even though you might not know how all those things would fit or solve a problem. So you have to prioritize, because Santa won’t give you every present. You have to determine what are the technologies that are the future. There’s going to be constant product improvement and development, and if one keeps one’s eyes and ears open, you’re going to find good options. PW

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