Dan Miklovic joined LNS Research in May of 2014 and is now a Research Fellow, his primary focus is research and development in the Asset and Energy Management practices. Dan has over 40 years of experience in manufacturing IT, R&D, engineering, and sales across several industries.

Since LNS Research has surveyed the industrial market, starting in 2013, the number one issue facing the food and beverage sector has remained compliance with the Food Safety and Modernization Act.  Of approximately 700 responses (one-third from the beverage sector and two-thirds from food) just over 60% rank it as key issue. The impact of supply chain issues, customer preferences, raw material prices, social media and other factors range from 10% to 40% depending on industry, region, and company size.

In response to these challenges, two of the three top operational objectives in the industry are #1) improve manufacturing efficiency and #3) ensure compliance of operations; the second most popular is improve customer service.  Given the challenge of compliance, cost pressures in the industry, criticality of processing capacity during harvest, and the potentially devastating impact of product recalls, it is surprising that the food and beverage industry far lags overall manufacturing in the deployment of asset performance management (APM) technology. Companies either have no technology, or paper- and spreadsheet-based systems, which is the case for the majority of organizations.

If Industry 4.0 (also Industrie 4.0) is about the digitalization of business, perhaps no industry stands to gain more than the food and beverage sector, if they focus on the right opportunities.

Asset Reliability is Fundamental to Process Reliability

It seems obvious that a poorly maintained piece of equipment will perform poorly. It will break down frequently, fail to maintain performance volumes it was designed for, and potentially contribute to product contamination if failures result in foreign material introduced into the stream or the inability to maintain recipe set points, resulting in out-of-spec formulations.  So while there is an intuitive acceptance that well-maintained equipment leads to fewer problems, it seems that companies invariably view maintenance as “a necessary evil” and maintenance budgets are under constant pressure.

One of the primary reasons for this is that once a plant is up and running, either initially or immediately after refurbishment,  it will continue to run for quite some time with almost no maintenance, since equipment typically fails either during initial start-up or after some extended period of use.  In other words, there is a honeymoon period where it is easy to default to a reactive mode, invest little, and repair only when there is the rare failure. This approach appears to succeed in meeting production volume and quality goals with minimal maintenance cost.  The obvious problem with this thinking, however, is that ultimately wear-and-tear on equipment will have a negative impact.  This usually leads to a major investment cycle which is doomed to repeat itself.

What food and beverage companies must do instead is think of asset reliability as a financial issue that is a direct component of operational risk management. They need to recognize that asset reliability is the foundation of process reliability. Unreliable assets directly and indirectly cause unreliable production processes, unreliable safety processes, unreliable environmental processes and unreliable sustainability processes.

Instead of just thinking about lost production because an asset is unavailable, organizations should consider the assets’ contribution relative to people and process safety, energy and utilities usage, environmental performance and product integrity.

In the food and beverage industry Operational Excellence is built upon six pillars:

·         Asset Performance

·         Operational Performance

·         Quality

·         Environment, Health and Safety

·         Industrial Energy and Utilities Management/Sustainability

·         Supply Chain Management

APM 4.0 Enables Operational Excellence and Provides for Food Safety

Industrie 4.0, or Smart Manufacturing as it is often called in the US, is all about the digital transformation of manufacturing.  The idea behind Industrie 4.0 is that by using technology like the Industrial Internet of Things (IIoT), Big Data and analytics, Cloud, mobility and augmented and virtual reality (AR/VR), there can be a substantial improvement in operations.

Significant investment by the governments of top industrial nations like Germany, the US and China and others is driving Industrie 4.0 Operational Excellence. Now an Industrie 4.0 economy is taking on a whole new meaning.  LNS Research believes asset performance management (APM) of these smart plants must also evolve, just as the plants themselves will be different in the future.  We refer to this next evolution of APM as APM 4.0; it embodies several key functional elements:

Predictive and prescriptive analytics

Extensive use of IIoT data

Digital Twin

Ability to display information visually whenever and wherever needed

Giving technicians the ability to visualize potential problems, explore alternative solutions, and understand the impact of the decisions they are making will drive plant reliability to new levels.  With stable and near continuous operations, the potential for failure will be greatly reduced, so that process reliability will be high and food safety is greatly enhanced.