Baking & Snack - April 2018 - 108

LINE INVESTMENT

tant to analyze the information gathered in the bottleneck report and weigh the costs and benefits. "The key
is to find the right balance of cost versus utilization," Mr.
Brixey said. "You don't want to buy a race car just to have
it sit idle in the garage. It makes you money when it's
running around the track."
In the case of must-have line investments - new
equipment essential to the product being made or packaged - there is little to analyze. If a new product or customer demands a certain bag and the company doesn't
have the capability, a new bagger must be purchased.

Revealing blind spots
Investments in production lines are
big commitments with a lot of moving
parts, so it can be easy to lose sight
of everything that comes with it. The
bigger the investment, the easier things
fall through the cracks. It's important for
bakers to keep a few things in mind as
they decide which investment to make
and follow through on the investment.
A bottleneck report can be an in-depth,
sometimes overwhelming, spreadsheet.
It can be easy to pounce on the most
obvious slow-down revealed by the report, but Rowdy Brixey, president, Brixey
Engineering Strategies and Training,
urged bakers to look closer. "If a product slows down the line by 50%, most
people would see that as the biggest opportunity for improvement, but it's not if
that product is only run for an hour one
day," he said. "One sandwich pan being
run three out of five days of production, that's going to have a much greater
impact on line efficiency."
Not dedicating enough financial
resources to finish a project strong can
happen easily. Bakers need to make sure
they are clear and upfront about their
operational needs for a new piece of
equipment or components so the investment is satisfactory. Before purchasing
a new piece of equipment, especially
when going with a bigger oven, bakers
need to familiarize themselves with regulatory requirements. These can fall by the
wayside during the hustle and bustle of a
new investment.

In other cases, such as capacity issues, the answer may
not be so straightforward. Analyzing the cost per unit
against the financial investment can answer what level of
upgrade or replacement is most effective.
"I have to back out all of my costs from the total cost
per unit: delivery costs, commissions, packaging, ingredients, direct labor, indirect labor, maintenance parts
and the depreciation capital expense of the new equipment," Mr. Brixey said. If a company adds all of this into
the equation and wants to maintain the same profit margin, the price of the product will likely have to increase,
and bakers risk losing sales volume. If the investment
costs too much in this equation, replacing an entire line
or even one piece of equipment may not be worth it.
"I have to manage my parts costs, maintenance cost,
equipment downtime and thinking about the impact
over time," Mr. Thorson said. "Does it make sense to use
that asset, or looking at the total cost of the asset, does it
make sense to replace it? We want to make sure we have
a comprehensive list of the financials of running that asset, during scheduled time and unscheduled time."
Sometimes, by simply replacing components on the
line or equipment buys a company some time before
full replacement is necessary and ekes out some extra
capacity or efficiency. More hygienic components, such
as a new conveyor belt, sanitary valves or slide gates, can
speed up sanitation processes.
"These are components that might not have caused
issues in the past, but new requirements might require
regular disassembly, inspection and cleaning," Mr.
Thorson said. "I need to put something in that's going
to be a quick changeover and more efficient to take apart
for cleaning and inspection."
Speeding up the process buys more time on expensive
investments the bakery may not be in its budget. For example, to improve ingredient loading time, Mr. Brixey
suggested bakers invest in bigger pipes or pumps to an
ingredient handling system instead of a full replacement. Bakers could extend the oven or proofers. But
again, it all depends on the cost per unit.
"I always come back to what does the investment do to
the cost per unit because that can help you make the right
decision if you have all the information in place," he said.
Compiling a bottleneck report and efficiency analysis and comparing cost with profit give bakers a clear
picture of their production line's needs. Identifying the
problem can control the scope of the issue. A bottleneck
report and efficiency analysis can reveal the root of that
problem and a line's true efficiency. From there, bakers can weigh costs and benefits to determine whether
a full line or equipment replacement is truly going to
be worth the investment ... or if a simple upgrade will
do the trick.

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Baking & Snack - April 2018

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