Food Factory Executive

Pick Up $1M: Significant Cost Savings are Left on the Factory Floor

Rampant overstating of efficiency metrics hides your opportunity for improvement

It's an old business adage that you can only manage what you can measure.  But what if your factories measure wrong, or report inaccurately?  If your performance appears to be acceptable, but in reality it is not, then you will miss opportunities to improve yield and cut costs.  And in today's tough conditions, you can't afford to miss those opportunities.

By over-stating their efficiency metrics, food factories are leaving $1M per plant per year on the factory floor.

This startling information comes from a recent study carried out with more than 100 food and beverage plants across a diverse range of product and process types. Performed by CDC Software's factory experts, the Factory Performance Benchmark study explored food and beverage plants' current challenges and approaches to driving productivity.

One of the most significant surprises in the Factory Performance Benchmark study was the inaccuracy in reported and actual efficiencies. When reviewing companies' basic production efficiency performance it became evident that nearly all organizations were managing their plants with inaccurate data, and were calculating efficiency in a number of disparate ways that hid actual performance (and therefore available opportunity).  Some organizations are operating at nearly 40 percent variation from their true efficiency metrics. Across all plants audited, the average difference between reported and actual efficiency was nearly 9% as illustrated in the graph below.

Inaccuracy of Efficiency Reporting (Reported vs. Actual)

 

The study not only concentrated on existing data gaps and plant performance, but also investigated the opportunities available from factories' existing human capital. Using a hands-on approach, the on-site study included an in-depth examination that spanned from the executive level to the shop floor, generating a uniquely holistic perspective.

The study findings have now been brought together into an industry-wide scorecard and benchmark index. Named the Factory Performance Audit and Benchmark, this breakthrough procedure helps food plants understand how they measure up and immediately pinpoints where they can improve. The first offering of its kind to provide an objective view of the plant's overall performance in relation to people, process, and plant opportunities, the Factory Performance Audit and Benchmark provides a comparison of the facility to the world's efficiency-leading and -lagging food and beverage processors.

Learn more about the Factory Performance Benchmark Study and the Factory Performance Audit and Benchmark, and how it can be used to assess your plant's efficiency and the overall health of the facility. To request a Factory Performance Audit and Benchmark for your company, click here.