Benchmarking for success
May 1, 2014
by Jim Kline
So you feel pretty good about the performance of your bakery — after all, you track your process loss, know your percentages of scrap and rework, keep track of your labor costs, measure your operating and mechanical downtime and monitor energy usage and water consumption. All of these indicators now run at or better than the performance targets established for your bakery. Who wouldn’t be happy with better-than-standard performance?
Certainly, having performance measurement systems in place is a major step to achieving an efficiently running bakery. But how does your company’s performance stack up compared to other bakeries? Take a step back from day-to-day operations to see. What are you measuring, and what do you measure against? The answers can be found in “benchmarking” your performance indicators against what is considered “best in class.”
Let’s start by defining a couple of terms: “benchmarking” and “best in class.” Benchmarking has been around for more than 100 years, having its roots in the Industrial Revolution. It is simply the comparison of one’s performance indicators against those of another; typically one or more of what you consider your peer group. The comparison can be against industry standards, but preferably it is against an operation whose performance is considered better than your own.
Benchmarking in its purest form not only is an evaluation of your performance against those you consider your peers, but it also compares one’s performance against the best in class. Best in class, or best practice, is simply the highest attainment for a particular performance area within an industry segment.
Does undertaking this effort really have — or add — value to your operation? Only you can be the judge.
Let’s consider two pan bread bakeries: Both are of similar age; both have similar processes and products; both are considered to be performing well against their respective performance standards.
Bakery A is designed to run at 165 loaves per minute (LPM), process loss is 1.8%, mechanical downtime is 1.95%, operations downtime (including changeovers) is 4.35%, and re-work is 0.3%. The bakery stops for one hour per shift to accommodate breaks and lunches. Given the provided performance indicators, the maximum capacity of Bakery A is 190,436 loaves per day.
Bakery B also is designed to run at 165 LPM; process loss is 3.8%, mechanical downtime is 4.95%, operations downtime (including changeovers) is 3.7% and re-work is 1.8%. The bakery relieves for breaks and lunch; however, it schedules one hour of downtime per day for maintenance and sanitation. The maximum capacity of Bakery B is 195,252 loaves per day.
Now, if the bakeries were to benchmark against each other and work to achieve best-in-class performance, they each could produce 210,053 loaves per day — an additional 75,000 to 100,000 loaves per week or 3.9 million to 5.2 million loaves a year. What is the value of that?
Benchmarking takes work. It requires collecting the right data, having confidence in its accuracy and then comparing it with industry standards. It is in this comparison where it gets a bit complicated. Each process has different benchmarks and different best-in-class performance standards. The standards for a bun line are different from a pita line, which are different from a cake line, and so on. This is where the homework comes in: You have to look for and work your sources. They come from many places: baking industry programs, educational programs, online sourcing, peer contacts, articles in industry publications, industry associations and resources, consultants and your suppliers.
By doing a simple web search using terms such as “energy benchmarking in the baking industry,” I garnered results including “Energy efficiency opportunities in the bread baking industry” and “Benchmarking to improve water use in bakery product manufacturing facilities.”
The benchmarking process does not end with knowing your performance and having industry targets as your goal. You must examine each benchmark and then define, test, institute and, most importantly, embrace the strategies for implementing improvements. It is work, but consider those 3.9 million or more loaves before you determine if it is worth the effort.