The document discusses best practices in packaging operations based on a survey by ARC Advisory Group. It finds that over 80% of respondents were less than satisfied with their packaging operations' ability to meet business objectives. Most packaging machines have limited automation, diagnostics, and connectivity. The document outlines trends impacting operations and provides data showing leaders have less downtime and better integration. It lists best practices in people, processes, technology, and information to improve operations. Adopting these practices can provide benefits across packaging, shipping, warehousing, ordering, and maintenance.

1. Best Practices in
Packaging Operations
John Blanchard
Director of Research
Food & Pharmaceutical Industries
ARC Advisory Group
jblanchard@ARCweb.com

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© 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

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© 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

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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

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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

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© 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

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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

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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

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© 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

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© 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

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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

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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

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Thank You.
For more information, contact the author at
jblanchard@arcweb.com. Please visit our web pages at
www.arcweb.com