ARC's John Blanchard's Packaging Operations Presentation from ARC's 2008 Industry Forum


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ARC's John Blanchard's Packaging Operations Presentation from ARC's 2008 Industry Forum in Orlando, FL.

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ARC's John Blanchard's Packaging Operations Presentation from ARC's 2008 Industry Forum

  1. 1. Best Practices in Packaging Operations John Blanchard Director of Research Food & Pharmaceutical Industries ARC Advisory Group
  2. 2. 2 © ARC Advisory Group Over 80% of users who responded to ARC’s best practices survey were less than satisfied with the ability of their packaging operations to help meet business objectives and customer requirements? Packaging Operation Impact Manufacturing and Supply Chain Efficiency & Effectiveness
  3. 3. 3 © ARC Advisory Group Over 80 percent of these manufacturers said that most of their packaging machines remain islands of automation with Limited on-line diagnostics Limited access to machine status and performance information Limited connectivity to other machines on the line Limited flexibility to meet changing product needs and customer requirements Current State of Most Packaging Operations
  4. 4. 4 © ARC Advisory Group Major Trends Impacting Operations Growth of in-store promotion orders and requirements, demand driven ordering, custom orders, rapid change- orders Final assembly moving closer to customer to meet demand driven market New sizing and distribution for less industrialized world – i.e. single day sizes for small neiborhood shops The “Green” (global impact) and “Survivability” issues Talent issues both machine OEMs and packers OEM cash flow issues
  5. 5. 5 © ARC Advisory Group Performance 0% 10% 20% 30% 40% Followers Competitors Leaders Normal Operations Abnormal Operations Unscheduled Downtime Leading companies have less than 10% downtime due to normal and abnormal operations Competitive companies average about 20% downtime with over 67% due to abnormal operations Many companies average about 40% downtime
  6. 6. 6 © ARC Advisory Group Performance Leading companies measure performance on over 80% of their lines Competitive companies average less than 40% of their lines 0% 50% 100% Followers Competitors Leaders Percentage of Lines Measuring OEE
  7. 7. 7 © ARC Advisory Group Performance Degree of Integration with Other Operations 0% 50% 100% Followers Competitors Leaders Excellent to Very Good Good Poor Leading companies have a significantly higher degree of integration with other manufacturing, business, and supply chain operations and systems with bidirectional exchange of information for automated record keeping
  8. 8. 8 © ARC Advisory Group Performance 0% 50% 100% Follower s Competit ors Leaders Excellent Very Good Good Level of On-line Quality Assurance per Line All companies have on-line quality assurance technology on their lines Leading companies have significantly more and more types of on-line quality assurance technologies such package content verification and non-metal impurity detection All of the survey respondents felt there was room for improvement in on-line quality verification, with almost two thirds saying there was significant room for improvement
  9. 9. 9 © ARC Advisory Group Best Practices People • Line supervisor empowered shift scheduling • Line operator empowered product run scheduling • Line operators performing some first line machine maintenance • Shared resources across manufacturing sites Processes • Automated enterprise-wide line performance management • Standard terminology, calculations, and business processes across all manufacturing sites • Shared performance data and improvements across manufacturing sites • Automated enterprise-wide product label management
  10. 10. 10 © ARC Advisory Group Technology • Significant servo and PLC/PAC based machine control with line control HMI • Packaging lines networked together and integrated with operations and business systems • Balance equipment flexibility and performance Information • Packaged lines networked together and integrated with production, business, warehouse, shipping, and logistics operations with bidirectional exchange of information for automated record keeping • Supports evolving standards and guidelines Best Practices
  11. 11. 11 © ARC Advisory Group Additional Best Practices & Emerging Practices Leading companies have a more collaborative relationship with their OEM machine builders, involving their OEMs in the early stages of new product development Leading companies have opened up their single control vendor standard to a select few that can demonstrate superior performance ARC also believes that an “emerging practice” of early adopters is the selection of machines and design of packaging lines based upon adherence to principles outlines in the OMAC guidelines and evolving standards
  12. 12. 12 © ARC Advisory Group Many Benefits for Many Operations Group Benefits Packaging Operations More Accurate and Timely Order Fulfillment Reduced Operating Costs Reduced “Cost of Quality” Simplified Regulatory Compliance Reduced Product, Case, and Pallet Labeling Errors Shipping Improved Dock Turnaround Time Warehousing More Accurate and Timely Replenishment Reduced Palletizing and Picking Errors Reduced Inventory Order Processing/Customer Service More Accurate and Timely Billing Reduced Customer Returns Improved Manpower Productivity 3rd Party Logistics Improved Productivity Reduced Costs Maintenance Reduced Unscheduled Downtime Costs Reduced Operating Costs Advanced Planning & Scheduling Shorter Planning Cycles
  13. 13. 13 © ARC Advisory Group Thank You. For more information, contact the author at Please visit our web pages at