Jim Oko, Director of Process Engineering, Stellar
Aside from producing high quality, safe products, what is one of the most important rules of food manufacturing? Do not short your customers. If a disaster puts your plant’s operations on pause, know your options for continuing production outside the walls of your facility. Co-packing, co-manufacturing and built-in redundancy are three solutions to keep your operations moving when your plant is down. Here are the key things to know about each.
If your plant’s operations are down, identify which specific parts of your plant are inoperable. Is it the packaging portion of your food processing facility? Is it the actual manufacturing area? Is it both?
You need to fulfill your orders. What is the minimum rate you must produce at so that you won’t short your customers? If your plant is down for the foreseeable future, what volume do you need to produce right now to minimize your company’s losses?
If your plant’s packaging is down, consider engaging a contract packer, commonly referred to as a “co-packer.” A co-packer packages products for clients, working under contract to package your product as though it came from you directly.
If your facility’s manufacturing is out of order, consider engaging a contract manufacturer, known as a “co-manufacturer.” Similar to co-packers, co-manufacturers process products for clients under contract, producing it as if it came from you, the client.
Whether you opt for a co-packer or a co-manufacturer, do not wait until you actually need them to reach out. It can take months to find the right fit and get through all of the red tape. Plus, you want to ensure you are not stressing their operations when taking on yours. Meet with them now to draft and execute the proper confidentiality agreements and determine answers to questions such as:
Are they tooled and equipped to produce/package your product?
How long can they sustain your orders?
Do they have the excess built-in capacity to meet your production requirements without sacrificing food safety and quality?
Are their in-house quality control and HACCP programs managed and enforced to align with your current expectations?
The key is that you cannot negatively alter your product’s quality or modify appearance when using a co-packer or co-manufacturer; they must meet or exceed your specifications.
Request and conduct facility inspections to determine their food safety and quality standards. Do not make a decision based on their available capacity alone. Your co-packer or co-manufacturer must be willing to open up their doors to you to show you how their operation runs.
Assuming your particular emergency has not disabled your equipment, it may be possible and beneficial to temporarily relocate equipment to your co-packer to maintain finished product standards and specifications. For this to occur, prior protocols would need to be in place for transporting equipment to ensure the equipment is not contaminated during transit or while in the foreign facility. The receiving facility would also need to have available space and available utilities.
3. Built-in redundancy
If co-packing or co-manufacturing is not an option for your company due to trade secrets, competitiveness or company culture, you should consider adding redundancy into your operational network during your capital planning. Due to the costs, this is an option more suitable for larger, multi-facility companies.
Ensure operations and sales are aligned by defining actual plant capacities versus actual needs. Plan accordingly by incrementally increasing capacity at various facilities that produce “like” products so the network could absorb and sustain production for a given amount of time should a single facility go down. (It is unlikely that more than one facility would fail during any one emergency outbreak.)
You can also achieve built-in redundancy by improving manufacturing line speeds, increasing production space or by building newer, modern facilities during growth phases of the business.
Another way to implement redundancy is via longer production runs or through extra production days over a defined period of time before maintenance issues factor in. Redundancy can even be built into expanded inventories of manufactured work-in-process components or finished products that allow companies to sustain limited emergencies by having products or components available during limited ceases in production during an emergency.
These options must be balanced and analyzed through feasibility planning to ensure capitalized costs and other investments are not excessive when compared to the business model. These are the hard decisions. How much? Too much? For how long?
An emergency is not a planned event. Whether it’s a natural disaster, bacteria outbreak or accident that forces a company out of its normal, repeatable routine, pre-planning will remove panic and provide a roadmap for returning to normalcy. Planning, preparing and knowing what to do help you deal with any situation that arises to avoid shorting your customers by keeping quality product on the shelves. This preserves your products’ brand reputation, your product quality and in the long run, your bottom line.
If you’d like to learn more about co-packers and co-manufacturers, email me at email@example.com.
Stellar is a fully integrated firm focused on planning, design, pre-construction, construction, refrigeration, mechanical & utility, building envelope, and total operations & maintenance services worldwide. Visit the company's blog at www.stellarfoodforthought.net