Operational efficiencies can offer true competitive advantage, as Torino Foods recently discovered, writes Vaughan Constructions managing director Andrew Noble.
How can the food and beverage industry improve customer service, with a bottom line benefit to boot? The answer is simple. By leveraging design efficiencies across manufacturing and distribution facilities, quantifiable operational savings can be realised.
With plant operations functioning at optimal levels true competitive advantage materialises, ensuring products are delivered on time, in perfect condition and at the best possible price.
What does this mean for manufacturers and distributors? More operational savings and greater client serviceability.
It is a common story for many successful businesses – as custom increases, so too do operational space requirements.
Paul Carageorge, managing director of Torino Food Service experienced this first hand. The growing import and distribution business located in NSW had expanded beyond its existing facilities capacity, forcing storage and distribution operations to spread across multiple sites.
In an all too familiar tale, decisions are often made on the fly in an effort to gain more space and alleviate pressure on existing operational restrictions. But what effects do these quick fix solutions have on long term operational efficiencies and your bottom line?
Multiple sites present a myriad of problems, if what was meant to be a short term stop gap is extended over the long term. Operational efficiencies that may threaten your peak performance could include:
- Inefficient picking and packing processes
- Reduction in controlled processes leading to possible reduction in quality control
- Increased transport requirements for receiving and dispatch
- Significantly increased operating costs including plant and maintenance service expenses facility rentals and energy consumption
How can manufacturers and distribution specialists regain control? Simple. The answer resides in defining your current operational needs and outlining your future growth expectations.
Partnering with a design and construct expert to review your existing operations and map out future potential growth areas, will help you understand how your business too could operate at peak performance levels.
By centralising operations, Torino Foods is doing exactly that. Operational performance can be significantly improved by incorporating simple, but effective design efficiencies. Adaptability is design is also important to ensure your facility works for your business in the long term.
Early contractor involvement throughout the feasibility of your project, can help identify what others in your market are doing to maximise time and operational savings. With these lessons learnt, a design and construct contractor can identify where building expenditure is warranted based on potential operational savings or cost reductions.
An excellent contractor will work with you to design a bespoke solution that suits your unique needs, helping you identify real savings. With new or expanded premises and improved space requirements, manufactures and distributions operators can expect savings through:
- More efficient handling of products
- Less inward truck movements due to improved inventory control
- Improved time performance in picking and packing activities
- Decreased wear and tear on equipment leading to reduced maintenance and service costs
- Superior quality control
- Reduced labour requirements
But most importantly, a superior facility allows you to better service your existing customer base and opens your business up to new customers who could previously not be serviced in the past.
If you have settled for a make do approach because the capital expense of a new facility seems significant, consider the ongoing operational and cost inefficiencies you will continue to face day-to-day, should operations perform below optimal level?
Vaughan Constructions is working in partnership with the team at Torino Foods to consolidate its multiple operations into a new single facility in Ingleburn, New South Wales.
Realising that a business spread over multiple locations left business growth opportunities hamstrung, Torino accessed Vaughan Constructions' online Cost Calculator. Paul Carageorge noted the “calculator gave Torino access to an accurate picture of the true capital cost of building their new facility”.
Using the broad budget provided by the Vaughan Cost Calculator, he was able to ascertain a concept price to build a new premises that allowed for future business growth.
Working with Torino, Vaughan reviewed the base build and revised the boundary wall design to allow for a significant reduction in construction costs. Further review of the refrigeration design has allowed for existing ambient storage to be adapted to additional cold storage should anticipated business growth occur.
Torino expects a three percent reduction in running costs per dollar of sales over whole operations and an additional 12 per cent reduction in servicing costs on associated plant and equipment. The company is looking forward to moving into its new premises later this year.
With potential savings such as these, it really is worth mapping out your anticipated strategic direction to avoid the constant asset management versus business growth merry-go-round.
ABOUT THE AUTHOR: Andrew Noble is managing director of design and construction specialist, Vaughan Constructions.