Food Processing - September 2007 - (Page 34)

M A N U FAC T U R I N G M O D EL S KRaFT’S COST-CuTTING MODEl How can companies continue to turn to manufacturing to deliver cost savings they can drop to the bottom line? Technology has to fill in the void of lost manpower and experience. Northfield, Ill.-based Kraft Foods faced this very challenge at its Springfield, Mo., plant, noted Chad Harris, continuous improvement engineer for Kraft, at a Manufacturing Perspectives conference sponsored by Rockwell automation last year. Knowing further cost improvements would be tough to find, Kraft began an integrated process control improvement (IPCI) project with Rockwell automation. Company goals were to increase packaging effectiveness and first-pass quality, and to reduce overtime, giveaway reduction and raw material inventory. after analyzing operations and target areas, the team determined it could extract a potential 7 percent per year reduction in controllable costs and had the opportunity to reduce head count by two. Coordination between processor and supplier team members was critical. The team stressed that winning plant support would be critical to achieving objectives. To keep project costs under control, Kraft also planned to use off-the-shelf technology that Rockwell could support as much as possible. The project relied upon RS BizWare, manufacturing business software from Rockwell, along with its Factory Talk information features: Historian, Production Centre, Transaction Manager and View. The solution team was able to identify and solve a number of costly problems buried in its operations. One was “an ingredient that couldn’t be accounted for,” noted Harris. Research identified an incorrect control code and over-delivery of ingredients. Two to three hours of research and a roughly equal amount of time dedicated to code repair resulted in a significant reduction in the use of high-cost ingredients, better forecasting and reduced inventory. The IPCI effort also effected improvements in product quality and manual processes (including delivery, paper tracking and labor-intensive inventory management practices). The program proved even more effective than projected. Harris said the Springfield plant already had achieved a 10.5 percent per year reduction in controllable costs from raw material, labor and effectiveness. The plant was able to reduce headcount by four. In one of the better-known examples, Kellogg Co. (www.kelloggcompany.com), Battle Creek. Mich., outsourced virtually all its engineering in an alliance with Jacobs Engineering – which, in turn, hired many of the same laid-off Kellogg engineers. That relationship has continued to evolve over the past 15 years. “One advantage we had in the transition was a lot of the members of our engineering group went to work for Jacobs,” says Marty Carroll, senior vice president of supply chain for Kellogg’s Morning Foods division. “So we didn’t have all of our engineering expertise walk out the door. Also, a succession plan was always in place. We took a realistic approach during this process, so ours went more smoothly than it did for a lot of companies. The transition was accelerated, but we managed it effectively.” Although Kellogg has tweaked and shuffled the arrangement, the Jacobs alliance has proven effective. Kellogg maintains its corporate engineering group, which tends fundamental packaging, processing, electri- 34 • FOOD PROCESSING SEPTEMBER 2007 WWW.FOODPROCESSING.COM http://www.kelloggcompany.com http://www.fuchs.com/geralyn http://www.fuchs.com/geralyn http://www.foodprocessing.com

Table of Contents Feed for the Digital Edition of Food Processing - September 2007

Contents Editor's Plate Power Lunch NewsBites Regulatory Issues Rollout Food Biz Kids Product Spotlight Next-Generation Manufacturing Models Product Development Ingredients Packaging Show Previews New Product Profiles Toops Scoops

Food Processing - September 2007

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