Measuring what matters

This is a sponsored post supplied by CSB-System.

If you want to reduce costs, you need to take a close look at raw materials, processes, and products.

California-based company Courage Production has achieved significant results with this approach, not least with coherent data collection throughout the entire production process. The company pursues a straight digitalisation approach. An ERP system encompassing all areas guarantees optimum efficiency and creates the technological basis for further growth.

Courage Production COO Rob Engelhart asked, “What if we were able to know exactly which smoke house provides the best results for specific product groups?”

The US company, based in Fairfield, California, is a specialist manufacturer of traditional foods including hot dogs, beef jerky, and delicatessen products while having an innovative attitude towards how new technologies could help address some of its current challenges.

In 2009, Courage implemented the ERP software by CSB-System to better support the government regulations and increasing documentation requirements of the expanding business. By doing so, the company laid the foundation for a comprehensive optimisation program, which, to date, has produced many great results.

“We spent a good two years investigating how we could improve the production process. In the past, everything was rather complicated. Every day, some 50 pages of paper were passed on to production: orders, bills of materials, recipes, and work instructions. We have now digitised and streamlined this to a great extent. At the same time, we have really intensified our data capturing,” Engelhart said.

Smoke house optimisation ensures substantial cost savings

Digital data capture at all key points in the processing chain has many benefits for the meat processor.

Firstly, working with scanners and keyboards is much faster and significantly less prone to errors than using paper. By entering origin information, production times, quality data, lot numbers, and other relevant data electronically in the ERP system right on the spot, there is no need to write down the information by hand and then to transfer it later.

In addition, data capture at the shop floor is an essential precondition for in-depth analyses from which appropriate action can be derived.

The example from the smoke houses demonstrates which major efficiency gains could be achieved here.

Courage produces about 350 different items. Every single item, at some stage, will go into one of the four smoke houses, where it will lose part of its weight. But how much is it exactly, and why do the losses in the smoke houses differ? Where can correlations between product and smoke house be identified? Where can yield potentials be located? These simple, but essential things matter and are important in today’s food production.

“It has been important for us to minimise the losses in the ovens. When we started capturing and analysing the weights digitally in the pilot project, we had already anticipated some improvement. Yet, the actual results significantly exceeded our assumptions,” he said.

During the project, every smoking cart was weighed before and after smoking, at PC racks that were specifically set up for this. The weights were then transmitted online into the ERP system and the resulting aggregated data provided a precise overview so that the managers could determine the respective weight losses.

As a result, they were able to identify in which smoke house the specific products had the lowest loss. This in turn allowed optimal economic planning and distribution of the raw materials to the different positions in the chambers.

The outcome was that numerous so-called “marginal gains” – such as a two-percent increase in hot dog yields, one percent less water loss for beef jerky – ultimately added up to a major cost saving.

The experience gained from the pilot project has been transformed into a new standard process. By optimising the yields of every item in every smoke house, the losses can be reduced to a minimum.

Simulated recall takes less than one hour

The positive effect also shows in the traceability of the products. Data capture starts in receiving, where every raw material is scanned to register it in the system and follows every step of the process on to the spice department, batch processing, filling, smoke houses, packing, warehouse, and picking.

For every batch, labels with the serial numbers and other important details are printed at the CSB stations. The Serial Shipping Container Code (SSCC) finally allows Courage to quickly trace the entire processing path –for a simulated recall, the company needs less than an hour.

Minimise downtime of production lines

While the digital optimisations have led to a high level of efficiency now, management now focuses on the metrics-based planning and control of the meat processing facility.

With five production lines and several hundred items, production planning especially is a complex task, where more and more individual requirements of the customers, and short lead times from order to delivery, constitute additional difficulties. Consequently, predictive machine allocation plans become increasingly important to ensure the best possible utilisation of the production line capacities, while retaining maximum flexibility for short-notice orders.

With Advanced Planning and Scheduling (APS), both are possible for Courage, as the module takes the five most important factors into account for planning:

• Product group
• Label
• Wrapping films
• Allergens
• Set-up changes

The system provides an optimised planning proposal, which can be adjusted dynamically and in detail by the managers. First, a weekly sales forecast is established, followed by a production forecast. Then the stock on hand is checked against the material requirements planning before the production for each line is planned.

In the future, simulations should indicate exactly whether the line, shift and staff capacities are utilized in an optimal manner. Capacity bottlenecks and downtimes to the exact minute due to product changes and allergen contamination are visualised as well, including necessary cleaning procedures.

Courage aims for continued growth – with the ERP system

A series of several optimisation measures that Courage recently initiated should bring even more transparency.

The aim is to make the ERP system and its data on purchase orders, order entries, invoices, batch calculations, production orders, picking processes and inventories, the driver for all business decisions.

In the stock on hand, there is huge potential just waiting to be exploited. With greater precision in the entries and documentation of stock movements, the managers want to obtain a permanent overview of the exact values available at any given time.

In order to make the work easier for the production staff, and to further standardise the products, the bills of materials should be supplemented with technical procedure instructions.

Just recently, the implementation of the EDI module (Electronic Data Interchange) has been completed to facilitate the collaboration with trade customers like Costco, Trader Joe´s, Whole Foods (Amazon), Safeway and Vons.

The automated data exchange, which is required by many key accounts, is an important building block for the growth of the company.

“Our goal in the next five years is to double production and to sell our products throughout the United States,” Engelhart said.

 For more case studies from CSB-System, visit the website, YouTube or LinkedIn. 

Courage Production based in Fairfield, California, is a specialist for beef jerky and hot dogs.

The managers now focus on metrics-based planning and management of the meat processing facility.

Cohesive data collection detects weak spots and sources of loss in the smoking process.