How to ensure successful CAPEX investments. An Essential Guide for the Food Industry

Transcription

1 How to ensure successful CAPEX investments An Essential Guide for the Food Industry

2 A Senior Manager s Essential Guide to ensuring factory floor capital expenditure meets expectations in terms of improvements in productivity and return on investment Introduction According to a recent study, a new wave of optimism is sweeping through the UK Food and Drink industry, as manufacturers switch focus from defensive cost cutting to growth. With some lingering fragility within the sector, making smart investments in equipment and systems for 2014 will be essential for food companies to optimise productivity and be one step ahead of their competition. However, all too often, proposals for improving productivity are overly complex and expensive, making it difficult for managers to understand and assess the most important financial and operational aspects of any investment. Trends in the rapidly expanding ready meals, hand-snacking and pre packed fresh produce sectors create a number of particularly significant challenges, especially relating to the control of labour resources and the effective management of raw materials to reduce waste and giveaway. (The report cited continual rising costs of the raw materials as a major issue.) Fortunately there is clear evidence that installing dedicated modular systems that focus on these specific issues has a rapid impact on productivity, whilst providing longer term advantages and excellent returns on investment. However selecting the right supplier(s) for a specific productivity improvement project needs careful consideration. Making the correct selection is crucial to the success, not just of the project in hand, but also future projects. Therefore, before any capital expenditure proposal is consolidated, what are the key questions you should ask your project managers and potential suppliers to ensure your company achieves the performance and return on investment you are expecting?

3 It is important that any potential supplier should be able to provide plain english answers to the following questions and they should also be able and willing to help put together a cast iron case for investment in their solution. What percentage of the supplier s business is within the food sector? The Food Industry has unique and challenging operational requirements. This makes it very difficult to implement non food specific systems and solutions within the food environment. Therefore the ideal supplier should be able to demonstrate extensive knowledge and experience within this sector. What is the expected ROI? Low risk - rapid return on investment guarantee is critical to consolidating CAPEX approval. Your supplier should be able to calculate what this will be for your project, based on certain criteria and, in addition, provide documentary evidence of effective ROIs from other customers. Who will be ultimately responsible for ensuring the system is fit for purpose? This will typically be a joint effort between the supplier and your project team. However, the supplier should give firm commitment to ensure the system will meet defined key deliverables. Single source supply offers a number of important advantages. Ideally your supplier should be able to supply the hardware, instrumentation and software without the use of third parties. How will the supplier ensure seamless integration between the factory floor data and your management system? It is essential that factory floor data provides dynamic, real time information. This can then be used to good effect, allowing management to be proactive rather than reactive. What proviso will there be from the supplier to ensure future proof expandability? Customer demands and changing market forces will mandate that today s factory solutions will need adding to and upgrading in the future. You should check that your intended supplier can support this essential requirement without unnecessary and expensive redundancy.

4 How will the installation of the new system impact on day to day production? Additions to existing plant need to bring minimum disruption. Plug and play equipment modules together with wireless connectivity can significantly reduce installation times. What training will be necessary for all parties concerned and what ongoing support is available? Training for operators and management should be an integral part of any proposal. Given the general fluidity of the food sector workforce, this can be an ongoing requirement. When all these questions have been answered successfully and coherently, your project manager should be able to work with the chosen supplier to generate a strong case for the investment that can be presented to yourself and other senior management. Having carefully chosen your investment, it is equally important that you know what to ask your project team to ensure a successful implementation: How can you check that your project team will deliver a fit for purpose and effective factory floor solution? Your project manager should: Involve all parties from the outset, including factory floor operatives (they can be a major ally) Appoint a System Champion give one person ultimate responsibility to make things happen Establish a documented installation plan Supply required skilled resources where and when required Ensure effective information flow by instigating weekly project meetings where actions for the previous week are reviewed and ones for the coming week are documented

5 How do you get easy project buy in from your operational team(s) Adopt a Collaborative Approach engage with all parties (internal and external) concerned. The key members of your team need to take ownership of the project by ensuring all relevant areas of the company feel part of the project and contribute to its success Clearly explain to all parties how they will benefit from the planned improvements (e.g. reduced everyday production problems, improved job security etc) Partner with the vendor in this through the use of previous case studies -encourage use of video examples of successes at other sites to demystify the solution on offer Involve senior factory floor personnel in the design of fit-for-purpose hardware and system layouts What should you expect from your team following installation? Your project manager should: Be able to extract and present critical data at the post install debriefing Keep clear documented evidence of savings/improvements especially related to ROI Clearly demonstrate any ancillary benefits not identified at the beginning of the project Monitor and present the work force s positive buy in and general attitude to the new system

6 Marco Marco provide innovative factory floor solutions that uniquely meet the requirements and challenges of the Food & Beverage industries. Our extensive experience is under-pinned by over 450 installations in this sector in the UK and clients regularly achieve return on investment periods of between 6 and 12 months. Marco design, manufacture and install low risk rapid ROI modular control solutions that: improve factory floor productivity improve product quality improve profitability opportunities Modules can be installed individually or as part of a wider fixed functionality solution that brings Total Control from goods in to goods out. Key deliverables are: Reduced giveaway/overpack Increased line speeds and productivity Elimination of unnecessary waste Improved stock control Reduced direct labour overheads Improved recipe formulation- elimination of spoilt batches Elimination of unaccountable losses Brand protection through centric focussed label error elimination Click here to learn more

7 United Kingdom Marco - Enterprise Way - Edenbridge - Kent - TN8 6HF Telephone (0) info@marco.co.uk - Website: Netherlands Marco - Sprendlingenpark JT Oisterwijk Telephone: +31 (0) info@marco.co.uk - Website: