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Maturity levels ADMA Eco Factory explained

Through a set of SME-inspired blogs, we want to inform and inspire you how manufacturing transformation maturity levels can be detected and measured. This is the first one in a series of many more to come. All feedback is highly appreciated. Enjoy!

The company

Today we zoom in on an industrial craftmanship-bakery using more than 100 types of basic, locally sourced flower ingredients through smart automation, thereby delivering daily more than 300 different customer product types without jeopardizing the quality and craftsmanship-character of its products. Recently the company integrated smart picking technologies (using Smart Glasses), which strongly improved delivery reliability as well as the ease of working for its employees.

Some key company data further include :

  2011 2013 2015 2017
Turnover (€) 7.311.720 10.149.820 14.780.530 17.110.761
Personnel (FTE) 44 67 98 129
Investments (€) 310.000 963.850 730.380 760.530
Hourly production rate 1940   3140  

The ECO Factory

Sustainable production is about creating a resilient production system based on the (limited) availability of raw materials and auxiliary materials. These systems should become more and more capable of closing the material cycle (eg re-usage) thus optimizing the efficiency of raw material usage.

Being a front-runner in eco-production offers companies advantages such as cost reduction, risk reduction in raw material and energy supply, as well as in terms of a company’s social responsibility image.

Manufacturing SME’s at maturity level 3 apply a methodical approach to environmental impact reduction at the machine, process and plant level of raw materials (incl. by-products, waste streams and emissions), water & energy consumption. Corresponding management systems based on clear objectives and KPI’s are being used. 

ADMA identified a total of 7 subtopics within the ECO Factory transformation. Today we explain two of them – energy consumption & business process –  through the bakery example.

  1. Energy consumption

As the company has not yet defined clear targets for energy consumption and (other) resource use, we rate the maturity at level ‘2’ (see picture below).

In order for the company to increase the ECO maturity level, a structural measurement of energy consumption at plant, process and machine level should be started, taking following questions as a starting base :

  • Which machines, processes and/or installations are the largest (energy) consumers?
  • What is their respective share in the product cost?
  • What is the impact of the loading of the ovens on the energy cost per kg of per dough processed?
  • Etc

To grow even further, the company could start to integrate these data into their ERP-system. Doing so, the spread between more economical versus more energy consumption-intensive periods could be tracked, and study could be done towards the exact causes of this spread. The company could introduce indicator systems that make it possible to monitor the energy intensity of production versus different parameters, e.g. energy per piece, energy per kg, energy per lot for different products, etc.

The next step could then be to systematically reduce these values through setting ambitious targets, implement advanced technological solutions and/or set-up innovative partnerships with key experts.

  • Business process

The company demonstrated sufficient attention for the eco-impact of their processes, which is taken into account in strategic decisions.

Some examples:

  • purchasing : they deliberately go for a short chain set of ingredient suppliers, i.e. sourcing within a 50km distance max. ; where not possible, ecological transport is always the preferred option (avoiding air transport at all cost).
  • logistics : optimal cargo loading (by third parties)
  • packaging : use of FSC carton and partially compostable packaging

All the above achievements would rate the company at a maturity level ‘3’ (see also picture below).

To raise maturity up to the Factory of the Future level (level ‘4’), they could, for instance, consider to go for decentralised production (‘local for local’) for these markets where they are growing fastest. Moreover, the bakery could start establishing an Integrated Risk Management (IRM) approach. This means assessing and integrating the risk from many different angles such as financial risks (eg. changing currencies or interest rates), or operational risks (eg. linked to the manufacturing or logistics process), or ever more digital risks  (eg. possible threats of cybersecurity that could hijack the production system and process), but of course also sustainability risks. The latter is not yet commonly integrated as there is not always the awareness, data or risk analysis available but for the craftmanship-bakery it could, for example, be the risk of a failed harvest, a major disease driving up the prices of grain, wheat and flour, or legal restrictions avoiding monocultures.

IRM is a question of being aware of risks, threats, and opportunities in terms of environment and other aspects as mentioned, prioritize them and make decisions towards being more futureproofed in the long term.

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