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says, “Given current commercial pressures on food businesses, the reduction of waste should be on the agenda of every CEO and Finance Director. Government has said that they will consult on making the reporting of food waste mandatory; I would encourage businesses to get ahead of policy and reap the rewards of adopting good practise.” So where does all this waste come from? It is
[Image: Victoriano Izquierdo for Unsplash]
same fi rms are hit year on year with statutory minimum wage and pension increases, increases in raw materials and packaging, increased energy costs, and, due to the current infl ation, can now expect infl ation linked demands for salary increases. As if this was not bad enough, when these manufacturers ask their customers (the supermarkets) to accept a price increase, the response is usually a ‘no’ or a ‘perhaps, if you can show us what you have done to reduce wastage and improve effi ciencies since the last round of price increases’. So, quite apart from the UN Sustainable
Development Goal to halve food wastage by 2030, manufacturers are under constant pressure to reduce waste, improve effi ciencies and become more ‘green’.
The Power of 1% ‘Cost of Sales’ Reduction Back to company accounts. A typical medium sized food manufacturer will probably turn over
about £100m per annum. On that turnover, the Cost of Sales will oſt en be around £80m. Cost of Sales should strictly include only the raw materials and the direct conversion labour to turn these raw materials into fi nished products. T is leaves £20m for overheads, offi ce costs and profi t. Not infrequently, this will reduce nett profi t to 1% (£1m) or less. In our factory walkthroughs, we always attempt
to encourage performance improvement focus upon Cost of Sales, as this is the greatest area of cost and usually provides the greatest opportunity for wastage and mistakes to occur. Just imagine, in the above example, a reduction
in Cost of Sales of just 1%, adds £800,000 to the bottom-line profi t. An increase to the bottom line of 80% from just a 1% reduction in T e Cost of Sales. How realistic is this? Very! We have seen this and multiples of such improvements happen in many production sites and are ready to help make it happen in many more. David Moon, Collaboration Director of WRAP
everywhere, throughout food manufacturing operations, from goods inwards to despatch. Some obvious examples include FIFO (fi rst in fi rst out), which is oſt en not managed as well as it could be. Consequently, earlier deliveries can get pushed towards the back of the warehouse and go out of date rendering them unusable. Next, there is oſt en a mixing stage, where the wrong ingredients or wrong quantity of ingredients can be added, causing total batch wastage. On to the portioning stage, where spillage and overfi ll can also play a costly part. In the packaging stage, where the range of products has generally increased from a limited number of raw ingredients, and consequently the management of variables becomes much more complex. • Risks – for example, due to allergens being
added, but not represented on the packaging (this generally means that the wrong packaging has been used for this product). • Incorrect barcode – this could apply to either
the primary packaging, secondary packaging or both. • Incorrect date codes – packaging and date
coding errors, if not picked up at the factory and reworked (costly enough in itself), but are delivered to the supermarket, will cause an even more costly batch rejection or possibly a fi ne and potential damage to the brand and relationship. T ese areas are just a few examples where risk
and wastage are vitally important in a) protecting the consumer and b) reducing operating costs. T e second area which we also look at in detail
is production effi ciencies, especially the OEE of production lines where the target line speed suggests a certain batch fi nish time, but the reality is frequently very diff erent, in that the batch completion is signifi cantly delayed by breakdowns, short stops and slow running. Breakdowns and their root causes are oſt en quite
easy to fi nd, but short stops and slow running can be much more diffi cult. T is is where our specialist knowledge and experience can also be helpful. So, for an integrated, solution-based approach,
contact Harford. Our 55 years continuous service to the industry speaks for itself. (01225) 764471
www.harfordcontrol.com
CONTACT:
Harford Control
www.harfordcontrol.com; (01225) 764471
automationmagazine.co.uk
Automation | February 2022
19
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