I have been the Managing Director and major shareholder of Harford Control since it started nearly 50 years ago (previously named Weighdata Ltd.). As the earlier name implies, we were originally involved in weighing machines supplying everything from microbalances to 2 tonne platform scales, some of which we developed and manufactured ourselves.
This wasn’t challenging enough, so we started to look at what we could do with data from weighing machines in computerisation and analysis, to make the data collection more useful. Towards the end of 1979, Average Quantity Law was introduced to replace the old Minimum Quantity Law. This is one of the few pieces of government legislation which actually helps manufacturers of pre-packaged products by allowing them to underfill parts of production batches to prescribed quantities, so long as the batch average satisfies the labelled quantity.
Whilst other companies focused upon the production of low priced and poorly specified average weight monitoring systems, to plug into weighing machines, we created a unique set of algorithms which meant that our systems not only helped manufacturers to satisfy the prescribed legal requirements but also achieved this with minimal levels of overfill and the fewest number of process adjustments.
Even today, nearly 40 years later, the capability of the Harford system algorithms to reduce wastage, through better control under Average Quantity Law, have not been exceeded or even matched by other systems manufacturers.
Though we enjoyed a great deal of success due to our Average Weight systems, it wasn’t long before customers began to ask us for other features and benefits to be included in order to reduce data collection through paper recording. We, therefore, began the never-ending process of developing our early weight control systems into full factory floor information management systems, eliminating most of the paperwork and providing real-time analysis, prioritisation and distribution of information that companies could use instantly to improve performance and reduce manufacturing costs.
The programmes we developed include;
So, with the advent of Average Quantity Law in 1979, our initial focus was bound to be within FMCG and in particular the fast moving consumer goods which were pre-packaged to prescribed weight or volume. Having been continuously involved in FMCG for more than 40 years, I have been privileged to see many developments and improvements. In the early days, many industries were far more labour intensive than they are now, so much so that many companies used to carry out process capability studies on their production lines to calculate optimum settings and control limits. Some even tried to implement the teachings of Dr. Edwards Deming and Walter Shewart to improve their processes, reduce wastage and improve efficiencies.
As industries became more competitive, they were constantly looking for ways to improve efficiencies with fewer people. Eventually, manual calculation of things like statistical process control and process capability became impossible for many due to their time-consuming nature. This was a great opportunity for us to develop our systems to handle SPC and process capability automatically and to set optimal control limits for each product/production line as an automatic by-product of weight control and quality checks. This lead to the ultimate outcome for many companies of achieving more by doing less.
Lean Six Sigma is very much en vogue at present, though it is still far more frequently talked about than it is understood or effectively deployed. It is the combination of Lean, developed largely by Toyota in Japan, and Six Sigma, developed largely be Motorola in the USA. Lean, as the name suggests is about removing fat (waste) at every opportunity and Six Sigma is about accepting that every process has a degree of variation. Lean Six Sigma gives us a broad selection of tools to help us standardise and manage that variation in order to manufacture and despatch totally compliant products time after time, with minimal rejects, rework and wastage.
Literally, Six Sigma means Six Standard Deviations which, taken literally, would mean that a process could achieve a variation equivalent to plus or minus 6 standard deviations before reaching the limits of customer acceptance (the product variation control limits). Six Sigma is also sometimes expressed as DPMO (defects per million opportunities). The DPMO equivalent of Six Sigma would mean that a manufacturing process would not be expected to produce more than three defects per million pieces.
However, it is important not just to understand Six Sigma, but to also know where to apply it for optimal benefit. For some production requirements, even Six Sigma might not be considered good enough as, for example, even one defect per million in pharmaceutical dosage applications may be one defect too many. On the other hand, within the food and drink industry, tolerance limits around a central point of three to four Sigma (standard deviations) is generally considered to be good enough to create a capable process. Because of the legal allowances under Average Quantity Law, for example, three to four Sigma is good enough for the majority of pre-packaged products and in these circumstances, here would be no payback from improving such a process to Six Sigma.
Challenges faced by today’s food and drink manufacturers are enormous. Even before Brexit and the fall in the value of the pound which pushed up the price of many imported raw materials necessary for the food and drinks industry, the pressure was well and truly on to find better ways of improving performance and reducing manufacturing costs.
Although each manufacturing process can often prove necessarily complex, to us it is about the conversion of raw materials and labour into consistently high-quality products, at the lowest possible cost. The complexity that surrounds this simplicity is largely brought about by the seemingly endless choice found on today’s supermarket shelves. Whilst all this choice is great for the consumer, it creates even bigger problems for the manufacturer as it so often means shorter batch runs and more frequent product changeovers so, in effect, more downtime.
When manufacturers ask their customers (largely the supermarkets) to accept price increases, even where the answer isn’t ‘no’, it can often be ‘show us what you have done to improve efficiencies since the last round of increases’.
The only opportunities which the manufacturer has of reducing costs is by making better use of raw materials (less wastage); more right first time (make batch rejections and RTMs a thing of the past); and also better utilisation of the conversion process, whether this is through automation or through more efficient use of labour, or both. Recent statistics suggest that UK unemployment figures are lower than they have been for many decades in spite of the much talked about net increase in foreign workers during this same period. On the face of it, such low unemployment should be applauded, but there is also a concern that some companies might be taking on more people, rather than investing in automation, where automation could provide greater longer term efficiency.
If we are making our industries more manually intensive, then this is a practice which will likely have only short term benefits, especially in the realisation that, even within the EU, the UK’s minimum wage is £7.50 per hour, whilst Bulgaria’s is £1 per hour and almost any food and drink products can be shipped from Bulgaria to the UK within a matter of hours. For all these reasons, therefore, it seems that UK manufacturers have little long-term alternative, even if they have more options in the short term, than to make their businesses as efficient as possible through driving out materials and labour wastage wherever they see it.
Paradoxically, though all UK food and drink manufacturers face these same problems, they often do not see the wastage until that wastage comes back as a batch rejection or somebody decides to do a project to find out the degree of wastage in a particular area and to analyse what they can do to improve.
In one of my articles, during the last few months, I mentioned a large manufacturer of cakes who was losing more than £50,000 per week in fresh cream. Although this was a known cost of wastage, sadly there was no project in place to reduce this. However, there was a project within the same company to buy an automated coding and labelling verification system to satisfy the demands of one particular supermarket. We are not saying that the latter is unimportant. On the contrary, ensuring that batches of product go to supermarkets and don’t come back, automated coding and labelling verification can provide major benefits in that direction. However, with a little more thought and more inter-departmental co-operation, we believe that this company could have addressed both problems for little more money. Sadly it was the Technical Manager who had the budget for the automated verification system and who was not involved in the concerns over fresh cream wastage and it was a Project Manager who had identified the issue of fresh cream wastage but had no budget to address this.
This inter-departmental sectarianism only serves to add to the wastage levels for UK manufacturers. Fortunately, however, many companies are gradually recognising that everyone, literally from the shop floor to the top floor, has a valuable contribution to make in terms of reducing wastage. Goods inwards, processing, packaging, dispatch, procurement, logistics, engineering and technical, all have a key role to play and all, therefore, need to be singing from the same hymn sheet in order to continuously improve performance and drive out wastage.
OEE (overall equipment effectiveness), where it is properly used, is a great tool for bringing together these various departmental functions. OEE is simply based upon three main calculations; Availability, Performance, and Quality. This means that the Availability of the process/machinery to run, the Performance or efficiency of the process when it is running and lastly, the Quality of the product which is the end result of all these endeavours. Each one of these three is given a percentage score and multiplied together to generate the OEE figure. If, therefore, a production manager attempted, as in the old days, to play the numbers game, producing as much product as possible during a set period, this would only work if the quality of the product matched the customer’s requirements. It would also only work if the increased efficiency of the production department did not starve processing or the income of raw materials. It is easy to see how OEE, run effectively, is a truly cross-functional toolkit from which the whole company stands to benefit from the consistent production of high-quality products at lowest manufactured cost.
Though an increasing number of companies are recognising the importance of door to door initiatives, the infrastructure to make this possible is often lacking. This is in part due to the kind of issues mentioned earlier within the cream cake factory, but it is a much bigger and broader issue due to the lack or even absence of real-time information which relevant personnel can instantly act upon. So much of the manufacturing operation (conversion process) is dependent upon a paper trace from goods inwards through to despatch, where some satellite computer systems may or may not have been introduced for various operations. For example, there may be a computer system connected to scales for the automated calculation of Average Quantity Law; there may be another system, perhaps based upon computer tablets for quality checks; there may be another system for automated label verification; there may be a system for calculating OEE.
Within the Harford approach, we accept that every company we deal with already has some methodology in place, either paper or disparate computer systems, to do many of the functions that the Harford system covers. The big problem is that this information is rarely available in real time or in a format which is instantly actionable by the company individuals who can most benefit from it. Consequently, it is not unusual to find out from these disparate systems tomorrow that valuable improvement opportunities were available today, but where missed.
The real benefit of the Harford system is its in-depth coverage of the broadest range of conversion functions and the bringing together of all of this data, in real time. Once together, this data can easily be analysed, prioritised and distributed to key personnel for instant action.
But it doesn’t end there. Even though we analyse and prioritise this information right to the desk tops of key personnel, that’s only a benefit if they have their computer switched on and/or if they take action. To avoid the inertia, we make all the improvement opportunities and root cause analyses headline news, in real time, so that everybody sees the same integrated information at the same time. Because of large production monitors which analyse this information and display it, up to the minute for each product/line combination, it becomes impossible for anyone connected to the conversion process to say that they didn’t realise or that they didn’t know there was a problem to address.
Underpinning all of this integrated and interactive technology is our own knowledge of Average Quantity Law, Right First Time, Lean Manufacturing and Six Sigma. Where companies install our systems, this additional consultative dimension is often provided free of charge.
One example recently where this knowledge helped, was a company manufacturing an expensive, aged whisky product where, due to an error in the use of the wrong density, it looked as though they might have to decant nearly 20,000 bottles of this product and refill it. Such an exercise would have meant some expensive wastage of spirit, together with the scrappage of the bottles, labels and caps, not to mention the additional time that would have been required to rebottle the whole batch.
Our expert knowledge of Average Quantity Law and the Packaged Goods Regulations meant that they did not have to repackage any of the product and were able, legally, to despatch it. This sort of knowledge was at one time freely available from Trading Standards Departments, but they, like so many public services, have suffered serious cutbacks in the services they are able to provide. This is where we can help to fill the void.
It is very important to clarify that I have not done all this on my own. During these decades we have managed to attract and keep some extremely talented and loyal people within our team. Apart from this wealth of talent, it would also have been impossible to create the comprehensive system we have today without the considerable input and feedback from our valued customer base.
The biggest challenges for us in the future are very similar to the challenges that we have faced in the past five decades. Though most companies appreciate that they only get what they pay for, there will always be some potential suppliers, in it for the short term, who will claim to potential customers that they can provide all the benefits of a Harford system for a fraction of the price. Of course we know that commercial economics make nonsense of such statements but sadly there will be some companies sufficiently seduced by such low-price promises who spend their valuable resources in the hope that they will achieve something for nothing. Experience teaches us however that such unfortunates who are taken in by these false promises will join the 75% of companies who fail to achieve their Lean Six Sigma objectives through computerisation. Those who make such false promises always fail in the end through lack of knowledge, understanding, resources or support, or a combination of these.