Operational Excellence in Food and Beverage: What Are Market Leaders Doing?
Research by the Aberdeen Group shows that operational excellence leaders in food and beverage outperform their profit margin goals by a full 9%, also spending one-third less on quality costs than their competitors
What are market leaders getting right about operational excellence that laggards are missing? These leaders maximize productivity and minimize costs by focusing on areas like data integration, standardization and performance management, all while keeping quality and safety at the forefront.
Breaking Down Data Silos
One of the top strategies helping food and beverage companies drive operational excellence is by centralizing data and breaking down information silos. An integrated Food Safety Management System (FSMS) is a key tool here, helping pull and push data across the organization to avoid time wasted on managing spreadsheets, paper processes and data aggregation.
Elements of the FSMS that help people work together more efficiently include:
- Centralized Reporting: Real-time reporting allows teams to make more nimble decisions while data is still actionable, as compared to looking at it weeks later once someone has had a chance to compile spreadsheets.
- Risk Register: Tracking all risk items in a single place gives you a big-picture view of enterprise-wide risks, helping the team prioritize future action.
- Nonconformance Management: Linking nonconforming materials with the production system allows companies to generate a corrective action, track product location and ensure proper disposition.
- Customer Complaints: Tracking feedback and customer complaints in an integrated system lets you link complaints to investigations, suppliers and corrective actions.
Minimizing Equipment Downtime
Food and beverage leaders in operational excellence experience 52% less unscheduled downtime, also reporting 20% higher overall equipment effectiveness (OEE).
Integrated systems are a key enabler of this increased efficiency, allowing organizations to:
- Proactively detect equipment issues before they become malfunctions.
- Ensure appropriate calibration and scheduled maintenance.
- Link equipment maintenance with other key areas such as nonconforming materials, corrective action and supplier quality management.
Compliance is a basic requirement for ensuring quality and safety. And yet, if you look at the track records of leaders vs. laggards, it’s clearly an area where many companies still struggle. A full 99% of market leaders have products that meet compliance requirements, whereas the number is 92% for their competitors.
Automated compliance tracking systems make it easier for leaders to achieve these high numbers by allowing them to:
- Track all regulations and requirements in a single place.
- Link requirements with controls and find high-risk gaps.
- Integrate elements such as supplier management, audits and Hazard Analysis and Critical Control Points (HACCP) with compliance tracking.
Standardizing Processes and Tools
An essential part of operational excellence is standardization, and this is definitely a trend we’re seeing in food and beverage market leaders. Of course, it’s not about making a square peg fit into a round hole. It’s about providing people with a set of tools that streamline work and create greater consistency around processes and data.
For example, a corrective action is a corrective action, no matter whether it’s taking place in the quality or safety department. Similarly, multiple areas of the business require Document Control systems to track instructions, specifications and other key plans. Using disparate systems such as email or shared network drives to manage these processes is a recipe for costly mistakes.
Instead, companies are looking for versatile tools that can be adapted for any area of the business. It’s important not to let the system drive the process, instead looking for flexibility in how organizations, facilities and departments design their own workflows.
Performance Management Focus
The final difference between food and beverage market leaders and their competition is a strong focus on performance management. This requires developing Key Performance Indicators (KPIs) that teams actively monitor and manage, using the Plan-Do-Check-Act cycle to make adjustments and drive continuous improvement.
It’s all part of the journey from ad-hoc, disparate systems towards an integrated FSMS. This evolution is what allows companies to get away from reactive, event-focused approaches to proactive management that prevents issues and allows companies to seize new opportunities as they arise.