Time flies, especially when it comes to change. From consumer demands for instant gratification to lightning-fast technology advances, bakers often find themselves running just to keep up.
During a recent roundtable, Baking & Snack had the opportunity to discuss the challenges that come with change — and how change can be a great tool — with three industry leaders. Jeff Dearduff, president and chief executive officer, Gold Standard Baking, Chicago; Brandon Heiser, chief operating officer, Roskam Baking, Grand Rapids, Mich.; and John Mulloy, vice-president, operations, 151 Foods, Bellmawr, N.J., share insights into their biggest concerns as they prepare to enter the 2019 International Baking Industry Exposition taking place Sept. 7-11 in Las Vegas and what fellow bakery operators should consider before they walk the show floor.
Baking & Snack: What are some of the biggest consumer trends impacting production at your facility?
Jeff Dearduff: Our company is embedded in the food service side of the industry, so we provide a lot of either private label or our own branded items into retail and food service. One big thing on the food service side is the idea of ‘cleaner’ label. There’s always talk about clean label, and then there’s area in between. We’re actually re-engineering a number of our sweet goods products to be cleaner label, which we’re seeing a lot of our customers feel good about.
Brandon Heiser: I pay the most attention to the packaging side, where products are getting smaller, more convenient. We’re doing more on-the-go type of products. That creates a lot of challenges within the bakery and in the packaging systems. It requires us to be more flexible and do more. On the flipside, we’ve also seen trends with the club-type stores for more display-ready products.
How do you balance the desire for increased production flexibility against the need for stricter quality control?
Mr. Heiser: It just makes manufacturers think harder and do things better than we’ve had to do them in the past. With quality and food safety, you just can’t allow those things to happen. It challenges us to think, ‘How do we make this more foolproof? How do we make sure it’s harder to make an error in packaging? Are there engineering changes we can make with barcode scanners?’ It’s easy to say, ‘Well, we had an issue, and we retrained everyone.’ But we’re all human, and we all make mistakes. It makes us go back to the drawing board and say, ‘This sounds good on paper, but can it really be repeated day in and day out?’ It challenges us to be better.
John Mulloy: It’s really through scheduling and lining up our items. We’re living in such a pounds-per-manhour world right now. This bakery is much bigger than what we were used to, so we operate a lot differently. How we do our daily planning is critical.
That said, changeovers are harder now because the lines are larger. But as long as we can set up and run the same item, we’ve found it definitely helps with our consistency and product quality. Once we start jumping around, though, that can get kind of messy.
Mr. Dearduff: Across the board, we just don’t changeover like we used to. We’ve put that mindset aside and follow a plan. You have to nowadays; it’s the only way to be efficient. We found we were losing too much money — we were trying to do a good thing — but it wound up costing us more.
Quality of product going to the customer closely follows how well you plan the bakery. We’re working through a lot of projects to get like s.k.u.s lined up. It might not be the same s.k.u. for long runs, but like s.k.u.s — the same shape or weight class, the same cutter shape — to line those up so the people running the machines don’t have to make drastic adjustments. You let those adjustments play out slowly across a day or shift so that you end up with the eyes on quality balanced throughout the day. If you have radical changeovers, like going from a 1-oz product to a 3-oz product in a different pan or package, and you’re doing that multiple times a day, you have opportunities to make mistakes.
It’s critical — the planning, the scheduling, the training, the knowledge of the product class — and then quality follows right along.
Is your bakery using data to enhance operations, and how are you harnessing that data to make more strategic decisions?
Mr. Heiser: Today, we have the ability to capture a lot more data than we did 5 to 10 years ago. And it’s so much easier to make decisions with data than it was before.
At a former company, we moved from an old ERP system into SAP, and it was one of the most painful things I’ve ever done. But once we made the transition, I was amazed at how much easier it was to make decisions because I had the data at my fingertips.
Mr. Dearduff: Data is critical to not only thinking about capital investments but also thinking about business performance. Again, our company is going through a transformation right now where data wasn’t a big thing, but it’s quickly becoming one. We’re making it become part of our daily walk.
Collecting data is one thing, but measuring, analyzing it and using it is really the key to making decisions. And that can lead to collecting data on an asset to determine how well it’s doing for you and what it’s costing you to maintain. If you’ve got high expense to take care of it, if you’ve got high expense from it breaking down and maybe there’s a service age that’s catching up with you, all that data helps move you toward replacing. So, capex is really at least two areas: One is replacing what you have, and the other is modernizing or automating it.
Mr. Mulloy: Our KPIs have increased drastically. We actually just had a meeting about cutting back a bit because we were just measuring and weighing — we’ve tied maintenance downtime; we tied cornmeal; we tied packaging loss — all the way across the board. The end-of-shift reports are now just huge spreadsheets of counts. It definitely helps us on a daily basis see where we have a problem. Everybody has an email now; the communication back and forth is great, but we count a lot more stuff than we ever did.
Is there such a thing as too much data?
Mr. Mulloy: If you’re not using it. Right now, we’re asking what we’re really using. We definitely need to know the downtime; you have to watch the waste numbers. Those are the big things you need to keep track of.
We have daily reports that go out per shift, not counting the shift meeting or the tailgate meeting. We haven’t done much with ScreenScape formats or anything like that yet, but we’re talking about putting that into the plant a little more so we have a better understanding of what’s coming and when. And that can even help with some of the different trainings and different information like GMPs.
Mr. Heiser: With our production and quality data, we’re capturing it in real time. We do struggle with the things that John’s talking about. We have to stop and ask, ‘Do we really need to be measuring this? Are we really using this information?’ We have the ability to gather so much information, but we’re not always doing anything with it. And that’s a sin.
But on the maintenance side, we’re trying to eliminate the paperwork. The bad thing about paperwork is that it gets put in a drawer. And if you want to know what’s in it, you have to figure out what drawer it’s in. We’re trying to log all our data — what happens in production, what happens in maintenance — into our computer systems. That way, it’s organized, and it’s easier to find and go back through.
Our maintenance personnel have iPads, and their procedures are loaded onto them. They record what they’re doing when they’re out there doing it, rather than going back and filling out a paper report.
When you gather data, how are you communicating it with the employees?
Mr. Heiser: We use iPads, and we have TV screens in the plant that display the real-time data.
If you think about your phone or your Apple Watch, it gives you an idea of how well you did today with your steps or fitness. That’s what we’ve got to do with data; we need to make it more available and in real time so we can have a yardstick throughout the day rather than the end of the day.
For years, we would have our supervisor sit down at the end of the shift and fill out this report. The problem is that it’s left to the memory about what did happen and what didn’t really happen. We tend to forget some of the bad things, and we forget some of the good things, too. I think it’s a cultural mindset of making sure the people who make things happen are involved and feel it’s relevant. One of the biggest sins is when people fill out information and don’t think it’s valuable. Therefore, it’s not actionable.
Mr. Dearduff: You might call that ‘visual management,’ and we do the same thing. We’ve got monitors three different places in the bakery that display the at-the-moment Redzone information, which is line efficiency, OEE and all those other measures you’re looking for. That’s where supervisor huddles happen; our supervisors are carrying the iPad, and you’ll see them walking through a packaging line and meeting with employees who might even be packaging at the moment. It’s all about visual; it’s all about having something immediately available to you so you can make a game-time change. Technology is playing a big role in how we communicate to employees.
In our recent Equipment Trends Survey, 28% of respondents indicated a significant increase in spending for 2018 (it was just 8% in 2015). Where are you targeting investments today?
Mr. Heiser: I can tell you that we need to spend more money than we have in the past to improve our operations, reduce labor, make jobs easier and make them simpler. The labor issue is not going away.
Mr. Dearduff: That’s certainly a consideration today. Looking ahead, it’s going to be not so much about eliminating jobs but eliminating the need for labor. For instance, we have packaging systems that are very hands-on. We need to find ways to take that hands-on need away, whether it’s robotics or some kind of sorting and selecting and laning systems. Take that manual hand-packing need onto an automated system, and immediately you’re looking at people assuming it’s going to eliminate the need for six workers. That’s on a shift, times three, that’s 18. Multiply that times a 6-day week, you’ve got day-off people, now it’s 24 people you’ll need to find.
It’s critical that we know the labor situation is not going to get better; it will potentially get worse over time. It’s bad enough as it is. So, our capital expenditures are probably going to be looking at that.
Mr. Mulloy: Everything Jeff said is on point. Our plant is new enough that we haven’t had to make any major changes. But going into IBIE, we’re looking at getting the equipment without the people there. Now, it’s not about just the return on investment from saving hours and saving people; it’s about, ‘What did we lose today because we couldn’t produce it?’ The lights are still on; the useful equipment is sitting there; we’re ready to go. But there’s nobody there to run it, and you need to start shutting lines down and keep the ones you’ve got to keep running.
We look at it completely differently now. Trying to come up with a rationalization if we’re carrying 8 people in makeup, or we’re carrying 14 people in packaging. What can we do? What’s a reasonable number to get down to? That’s what we’re trying to evaluate now.
A lot has changed in the industry since IBIE 2016. What do you predict the baking industry will look like in 2022?
Mr. Dearduff: I imagine that consumers will still want more choices. To Brandon’s point earlier, that’s a packaging issue in many cases. You can put two pieces in a pack or four pieces in a pack, and it goes to a different channel. So, packaging becomes something you need to look at to determine what’s most flexible and useful: faster changeovers or being able to channel part of a product to one type of pack and the other part to a different one. It will be about getting double-duty out of a single line. Creativity along those lines will be key in the next four or five years.
Mr. Mulloy: I predict consumers will push the envelope for variety and change. And sales will continue to push us for those flexibilities. Allergens play a lot into our changeover times and lost cost, so we’ll need to stay on top of making sure we get those costs covered somehow. At the end of the day, there has to be a separate pricing model. And I think a lot of us have gotten in trouble where a lot of our customers have said, ‘I just want to pay XX across the board.’ But that’s not possible because we have costs here and costs there.
And to Jeff’s point, we really need to change our own philosophies of the bakery. The days of lining people up, standing on the line and picking up rolls and putting them on a pan — or tying them or pushing a rack — it’s gone. That workforce, that work ethic is not there anymore. We need to push equipment manufacturers to help us get to straight-line runs. It will be interesting to see what happens because when you go that automatic, you lose your flexibility.
Mr. Heiser: I also agree with Jeff. The consumer’s going to want more variety and more convenience. And that’s going to drive us to have lines that are more flexible but also more costly. I can’t tell you how the consumer will change, but I can tell you that it will drive our costs up, and we’re going to have to figure out how to offset that. Some of our customers are large retailers, and they’re trying to drive their costs down, too, while at the same time trying to provide more variety for their consumer. But we’ve got to produce it at a lower cost.
The truth is, though, it makes us better in areas where we haven’t had to be in the past.
Mr. Dearduff: We’re at a crossroads. The consumers are going to drive more choices and different options. We as business leaders have an option at that point: We either figure out a way to do it cost-effectively, or someone else will.