: Increase Profits by Reducing Product Give-away and Waste while Ensuring Consumer SatisfactionMark Langridge

Food & Beverage and Consumer Goods National Accounts Team - USA

August 2009

: SICK, Inc. 2

: At SICK we push the boundaries of Sensor and Sensing Technologies, 9% of our sales is invested back into Research and Development to ensure that our customers receive the best proven products and solutions for their needs that is available today.

: As the largest manufacture with the broadest product range in the Industry today, you can be assured that you will receive a product or solution that is best suited for your application.

: This is why at SICK, we are able to combine many technologies to ensure we offer real solutions to real problems……….

: Today we want to talk about how we can assist in improving profits by identifying area’s of give-away and opportunities to reduce waste, while ensuring your customers receive quality products.

: Mark Langridge

: SICK, Inc. 3

What is Product Give-away?

: Product Give-away is defined as the consumer receiving too much of something, for example to meet FDA Regulations on Weights and Measures a manufacturer is more likely to make something bigger or add more of something to ensure the finished product is overweight than under. A Consumer is unlikely to be unhappy if they receive a bigger chocolate bar than intended or more waffles in a pack than is labeled. While the consumer is more than happy, manufacturers lose out on profit because this can’t be reworked, it is simply ‘give-away’.

: Identifying Give-away is much harder than identifying waste. For example with Wasted product you can quantify and measure, what you see rejected into bins or lying on the floor can be considered as waste and measured. Or, what you put in as far as raw material less your output could be considered waste, unfortunately what is missed and difficult to track or identify is give-away.

: Mark Langridge

Give-Away =

Total BOM - Declared Usage - Waste

: SICK, Inc. 4

And Product Waste…

: Unlike product Give-away, waste can be quantified and measured to some degree. Improving production techniques or detecting problems earlier in the process can reduce waste, even repeatable machine setup will reduce waste through Automating Changeovers.

: Jams in the production process can happen, a wrong packaging film is not identified earlier enough in the packaging or a product is made out of spec and doesn’t fit to the sleeve, all these incidents will generate waste.

: In some cases, if problems are identified early enough ‘waste’ can be reworked, for example certain food ingredients can be put back into the process to remake a finished product, or if a product is getting out of spec, if monitored can be brought back into spec quickly.

: If 15% of raw materials is wasted during the production process, 15% of overhead costs in staffing and energy is also added to that loss.

: In cases where some ‘waste’ can be reworked, then additional resources are required whether it’s staffing and/or energy, these all affect profits while Operational Efficiency is also decreasing.

: Mark Langridge

: SICK, Inc. 5

Examples – Give-Away…

: Mark Langridge

: Without final product inspection of it’s physical attributes, ‘give-away’ is much harder to determine. For example if a chocolate bar creeps out of spec by 1mm in either direction it is unlikely that it will cause jams in a single sleeve wrapper, but the effect on giving away actual raw material ingredient is massive in terms of profit loss.

           

  Working Time  

  Number of Lines 1  

  Production Hours per Shift 7  

  Number of Shifts 2  

  Working Days per Week 7  

  Working Weeks per Year 50  

   

  Product Spec/Production  

  Product Length/Width/Height in cm 12 4 3  

  Weight per product (Assumes consistent density) 58  

  No of Products per Min 1494  

  No. of Products per Hour 89640  

  Raw Material consumed per annum in Kilograms 25,299,993.60  

   

  Changes in Product Spec  

  Product Length/Width/Height in cm 13 4 3  

  Weight per product (Assumes consistent density) 62  

  No of Products per Min 1494  

  No. of Products per Hour 89640  

  Raw Material consumed per annum in Kilograms 27,408,326.40         Product Give-away in grams per annum 413,936  

 

Cost of Give-away assuming 1 Raw Material is $1.40/kilo $579,510.41

            

: SICK, Inc. 6

Examples – Wasted Material…

: Mark Langridge

       

  Working Time  

  Number of Lines 1  

  Production Hours per Shift 7  

  Number of Shifts 3  

  Working Days per Week 7  

  Working Weeks per Year 50  

   

  Production/Material  

  Cost of Raw Material per Pound $0.20  

  No. of Products per Pound 120  

  No of Products per Min 1600  

  No. of Products per Hour 96000  

   

  % of Waste 25%  

  Annual cost of Wasted Raw Material $294,000.00         

: To the left is an example of raw material cost for one typical production line in the Food Industry, what this doesn’t show is the Energy costs such as heating, lighting, hygiene measures that are also considered as waste, if we assume that 25% of this product is wasted then 25% of the Energy to produce that is also wasted.

: SICK, Inc. 7

Bringing together products to solutions…

: With products spanning many technologies, such as Photoelectric Sensors, Distance Measurement Devices, Profiling Sensors and Vision Systems. SICK is able to bring multiple technologies to offer real affordable and proven solutions to the Food, Beverage and Consumer Goods Industry.

: Mark Langridge

: SICK, Inc. 8

Total Solutions from a Worldwide Supplier…SICK Solutions

: Mark Langridge

: SICK, Inc. 9

The widest Solutions from SICK: Online Volume Measurement - Dough

: The WORLD’s first 3D Smart Camera can inspect and measure the dimensions of cookie dough BEFORE being baked.

: The ability to measure the 3D profile of cookie dough ensures the correct volume of dough is going to be baked, too much dough will result in product oversize and could potentially cause line jams especially at the tray loader. Not enough cookie dough will result in product underweight and wasted packaging. And double stacked cookie dough could potentially cause a hazardous fire within the oven itself.

: SICK’s Solution ensures that product quality is maintained and line efficiency is kept to it’s highest by eliminating potentially bad product BEFORE being baked, this will allow the option to reuse the dough therefore reducing WASTE.

: Mark Langridge

: SICK, Inc. 10

: Ensuring Correct Stack Height of Cookies before trying to wrap them is another point of verifying to limit waste. Time of Flight Distance Measurement Sensors do that precisely.

: Counting individual cookies is one check, but if the cookie has become out of spec and physical heights are not considered. The effect is a jammed wrapper or tray loader causing damaged product and line stoppages, all contribute to wasted finished product and energy.

: SICK’s 3D Vision Systems are one way of solving this issue in cases of continual product flow , but at SICK we offer the widest solution’s in the industry that allows us to offer you the best cost effective solution. Distance Sensors will also work!

: Mark Langridge

The widest Solutions from SICK: Online Stack Height Measurement – Cookie

: SICK, Inc. 11

: Online Volume Measurement with SICK’s 3D identifies product that moves out of specification.

: ‘Give-Away’ is harder to quantify unlike waste, but when a chocolate bar creeps out of specification at any stage in the process, the effect is loss in profits. Too thick of a chocolate coating or too big of a soap bar will unlikely cause a jam in the wrapper, but over time will effect profits.

: SICK’s IVC-3D is the WORLD’s first 3D Smart Camera and has already been successfully implemented in the Food Industry to do exactly the job of measuring the Length, Width and Height of food products in order to identify correct product specification, and calculate volume. Adding the IVC-3D to any production line gives immediate real time information on the process allowing for immediate changes to be made which results in the elimination of ‘off-line’ manual checks that may happen once an hour.

: Mark Langridge

The widest Solutions from SICK: Online Volume Measurement – Confectionary

: SICK, Inc. 12

: Measuring correct liquid fill level’s can be a costly and slow process, SICK’s NEW Vision Sensor ‘Inspects’ the correct liquid level fast.

: Over filled liquids is costly especially when filling products like shampoo’s. Profit is just poured away, and when the correct level is under achieved, product may not be wasted as such but the ‘Energy’ to produced that reworked product certainly is. Operating Efficiency decreases with every reworked product.

: SICK’s NEW Inspector is capable of doing multiple inspections at once. So not only can the correct level be measured in a bottle, accurately. Cap and Label Inspections can also be performed to add more Quality Control on your process. Thus reducing ‘Overfill’ and Waste.

: Mark Langridge

The widest Solutions from SICK: ‘Overfill’ Measurement – Liquids

: SICK, Inc. 13

Savings…

: Mark Langridge

In this example savings

are shown by identifying and

correcting product volume

at the pre-baking stage and after

baking to ensure maximum

benefit of reducing waste

before Packaging.

This example shows the effect

when too much product is

‘given-away’ and the loss.

Online Volume Inspection and

Correlation will identify and

allow for immediate

corrections to be made.

: SICK, Inc. 14: Mark Langridge

Lets us Improve your Profits!

: Thank you for your attention.