Cutting Costs And Boosting Profits
Thursday, May 14th, 2020
The latest product inspection equipment can be used to reduce the Total Delivered Cost of packaged food. In the recent case of a US-based snack supplier, the financial savings were considerable, says Mettler Toledo.
In today’s highly competitive globalised market, packaged food manufacturers are forever seeking new and more comprehensive methods of controlling costs and maximising their profits.
Traditionally, measurements such as Total Cost of Ownership (TCO) have been central to these efforts, providing a tried and trusted means of weighing up investment decisions. With TCO made up of all the costs directly relating to a piece of equipment, such as the capital expenditure of the device plus the ongoing maintenance, operations managers can perform procurement analysis measurements to accurately assess the long-term value of a new purchase to their business.
But TCO, as a measurement, uses a relatively narrow set of data points and is therefore only of value up to a point. A more detailed financial calculation is Total Delivered Cost (TDC), which quantifies how technology such as product inspection equipment can contribute to reducing the amount of money it takes for a company to manufacture and deliver packaged food. TDC is more comprehensive than TCO as it takes account of all operational costs, including the physical product as well as factors such as packaging, labour, quality checks, waste product, and transport.
According to Niall McRory, Global Key Account Manager at Mettler Toledo’s Product Inspection Division, food manufacturers are increasingly using TDC as a means of underpinning their investment decisions.
“The food industry is more competitive now than it has ever been,” he says. “That means packaged food manufacturers are looking to do whatever than can to shave even the smallest amount off the cost of what they produce. TDC is the ideal measurement for achieving that aim, as it takes a broader view of how new equipment can help reduce the cost to produce their products.”
For companies such as Mettler Toledo, which makes equipment such as metal detectors, x-ray systems, checkweighing machines and vision inspection systems, the increasing use of TDC in the packaged food industry means that it has applied a strong focus on features that help its customers to drive out inefficiency and waste. “TCO, as a calculation, was more narrowly focussed on issues directly related to the asset, such as reliability and uptime,” says McRory.
“TDC, on the other hand, takes a broader view of value, encompassing factors such as reducing set-up times, minimising false rejects and improving energy efficiency. It is about developing machines that are quicker and easier to use and produce less waste. This all helps customers to lower costs.”
The frequency of performance monitoring tests required in some metal detectors can be reduced by as much as 80 percent using ‘Reduced Test Mode’ technology.
Snack Food Maker Reduces TDC
So how exactly can product inspection equipment help packaged food manufacturers reduce TDC? Let’s use a real-world example of a US-based snack food manufacturer running four identical lines producing a cereal-based snack. The product is filled into metalised film bags on vertical form fill seal (VFFS) machines at a line speed of 100 packs per minute. The sales revenue from each pack is $1.50. The typical factory labour cost is $12 per hour, and the facility operates on 2 x 12-hour shifts, 260 days per year.
The company in question installed a metal detector with Automatic Test System (ATS) on the VFFS machine to inspect the product for metal contaminants immediately before packaging. Directly after the VFFS, a dynamic checkweigher was deployed and, following down-stream cartoning, an x-ray inspection system checks for other non-metallic contaminants, flavour lumps and the absence/presence of promotional inserts. Every two hours, the metal detection and x-ray systems are manually tested to ensure detection performance levels are maintained as a part of meeting compliance with food safety industry standards.
At the metal detection stage of the production process, the free-falling product is inspected by a throat metal detector for ferrous, non-ferrous and stainless-steel contaminants. An essential part of the quality assurance process is to ensure that the metal detector is continually detecting contaminants at the required level of sensitivity. To achieve this, regular checks must be carried out—a time-consuming process that also impacts the availability of the production line, reducing productivity.
The frequency of performance monitoring tests required in some metal detectors can be reduced by as much as 80 percent through the introduction of ‘Reduced Test Mode’ technology. Recent advancements ensure that the system is continually operating at a higher sensitivity than required to detect contaminants. If the system detection level starts to drift, it will send an early warning signal to alert the operator to check the machine before it reaches the minimum acceptable level. This gives the snack food producer the assurance that the metal detector is constantly working to or above the desired inspection standard. In this particular case, reduced test mode enabled testing frequency to be reduced from every two hours to every six hours, requiring only two tests per 12-hour shift. Reduced Test Mode also improved production efficiencies and reduced operational costs as the operator did not have to stop the line and test the machine as frequently as before.
“The benefit of using the Reduced Test Mode, in this case, was shown to increase sales revenue by $78,000 per line, amounting to a total of $312,000,” says McRory. “That’s a considerable saving which ultimately could have a significant impact on TDC.
The use of an Automatic Test System (ATS) to conduct metal detector performance monitoring tests provides further opportunities to reduce operational costs. Manufacturers have traditionally used a method where operators work at height adjacent to the weigher to introduce three metal contaminant test pieces of a known size and material into the product flow.
With ATS, three test samples are dispensed in separate discrete tubes within the metal detector aperture to simulate the presence of a contaminant in the most challenging position—the centreline of the product feed tube. From a quality perspective this process is much more reliable than manually inserting test pieces which could incorrectly pass closer to the side of the aperture where they are easier to detect. From an operational aspect the testing time is greatly reduced, and safety is also enhanced since ATS removes the need for personnel to work at height to carry out the test.
The Value Of Reducing False Rejects
With x-ray systems, TDC is addressed in other tangible ways, particularly around the used of advanced software to minimise false reject rates (FRR). In packaged food production, the cost implications of high FRR are potentially immense due to the re-testing, reworking or disposal of ‘good’ packs that are mistakenly judged as having been contaminated. Traditionally, a small set of inspection algorithms within the inspection software have been used to check for unacceptable variations in the x-ray image over a wide range. Now, advanced x-ray inspection software such as ContamPlus automatically sets the best possible level of foreign body detection. By utilising a larger number of algorithms, which individually check for product anomalies over a smaller range, inspection accuracy and tolerance to natural variations in the pack are increased, thereby minimising FRR. Unnecessary waste and rework costs are, therefore, avoided, which in turn protects profits for the manufacturer. This creates a higher level of confidence in the ability of the machine to protect the reputation of the snack food manufacturer and the health of the consumer.
“In the case of the US snack food manufacturer, the old x-ray system was generating at least four false rejects per hour, amounting to approximately 7 per 10,000 packs,” says McRory. “One Quality Assurance person paid $12 per hour spent an average of four minutes investigating and documenting the results of each false reject event. By upgrading to an x-ray system with advanced software, the FRR reduced to only two in 10,000 packs, with the manufacturer benefitting from reduced operational costs. The total financial benefit from using the advanced software amounted to almost $70,000 per annum.
“Meanwhile, the ability to fully automate product set up on modern x-ray machines meant the snack manufacturer became far more flexible as it could introduce new product lines at a much faster rate—adding to production line availability.”
Checkweighing can also reduce TDC by providing a proven weighing accuracy at high production speeds, meaning that product giveaway can be reduced. In the case of the snack manufacturer, the checkweigher was connected with a feedback loop to communicate with the filling equipment supplying the bagging machine, meaning the average weight could be reliably controlled to reduce product giveaway further. “This made a significant contributed to a reduction in TDC,” said McRory.
Conclusion—Using TDC To Make Informed Decisions
Ultimately, the impact that product inspection equipment can make in reducing TDC depends on the specific circumstances relating to production processes and the type of product being made. “Before commissioning any new product inspection or production equipment, I would advise that packaged food manufacturers should compile a checklist and request tangible calculations about financial reductions,” adds McRory.
“This should cover false reject rates, product set-up time, quality/validation frequency, power consumption, and reporting time. Other factors include labour and maintenance costs. Each of these factors can have a significant impact on reducing TDC.”
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