Opportunities in Food Production

““Success is 20% skill 80% concentrated Success is 20% skill 80% concentrated power of will” – Mike Shinodapower of will” – Mike Shinoda

Opportunities in Food ProductionOpportunities in Food Production

1. Agriculture2. Manufacturing3. Quality Food Safety & Food Law4. New Product Innovation5. Process Innovation6. New market development & export7. Engineering

AgricultureAgriculture

• Food processing sector is directly affected by agric output and prices

• Agriculture is highly vulnerable to climatic conditions• In-spite of variability, agric sector is thriving• Many raw crops are exported, processed outside and

finished good imported back to South Africa• Opportunity to add value to agricultural products• High focus on sustainable agriculture

• Secure unique species• Maintain healthy ecosystems• Reduce environmental impact of farming

• Agricultural productivity 4x lower than in manufacturing sector

• Opportunity in crop innovation and efficiency improvement

ManufacturingManufacturing

• DTI has identified food processing as a priority area in SA economy

• Food is the largest manufacturing sector by employment• Food processing employees 183 000 people (15% of total

manufacturing employment), has t/o of R57billion, accounts for 2.4% of GDP.

• Meat processing is largest food subsector (25% total food processing)

• Most sectors are highly lucrative and is a critical source of sustainable employment

• In manufacture, highest need for highly skilled people – must know process

• Balance performance indicators vs. Quality. Cost, Throughput• Maximise all equally, but biggest impact is line

throughput/efficiency• Theory of constraints big impact on throughput• Raw material quality affects process and final product quality• Manufacture team must manage performance daily

Constraints ManagementMEAT PROCESSING

96 boxes/day 6 boxes high VL/ 102688 kg high VL/day WALER MEAT GRINDER 1 boxes low VL/

400 kg low VL added 1158 meat/hour3088 kg meat/day

6 boxes high VL/ 10MEAT BLENDER 1 boxes low VL/

1158 meat/hour

PROVOTEC PATTY MAKER6 boxes high VL/ 12

60 box/hour MEAT MINCER 1 boxes low VL/576 kg/hour 965 meat/hour

QUANTITY BOX28 kg/box high VL 52000 kg current meat sales/month

6 trolley freezing capacity 25 kg/box low VL 26 working days/month6 trolleys 24 hours 126 boxes/freezing trolley 2000.0 kg current meat sales/day

7257.6 kg/freezing cycle 9.6 kg/box 3 hours production @100%302.4 kg/hour 4 hours production @80%

7257.6 kg capacity/day = bottleneck

THAWING

FREEZING

Management for Daily Improvement:Management for Daily Improvement: -

Management for Daily Improvement:Management for Daily Improvement: -

Prior year Target YTD MAR APR MAY JUNFactory Effeciency 64.7% 67.9% 69.2% 52.5% 72.8% 60.7%Operational Effeciency 85.5% 89.8% 81.1% 84.3% 94.4% 130.5%Machine Effeciency 94.1% 96.0% 91.1% 98.2% 111.4% 138.8%Plant Utilization 45.7% - 59.7% 40.8% 35.9% 42.9%Plan vs Actual 92.2% 94.0% 90.4% 93.0% 93.0% 91.0%Downtime% 10.0% 9.5% 8.9% 9.3% 11.8% 2.8%Yield 86.7% 91.0% 88.2% 84.0% 86.5% 74.0%Cost per unit produced Actual R 6.26 R 5.95 R 3.40 R 6.09 R 4.96 R 10.96Cost per unit produced Budget R 4.74 R 9.88Exp to T/O Actual 8.9% 8.5% 10.0% 10.7% 11.1% 11.4%Exp to T/O Budget 10.6% 9.4%Net Operating income Actual R 36,302,223 R 57,841,728 R 9,781,633 R 3,151,815 R 2,786,049 R 2,530,192 R 1,313,577Net Operating income Budget R 39,984,667 R 57,841,728 R 12,899,019 R 3,927,731 R 4,631,397 R 2,764,822 R 1,575,069Gross Profit Actual 17.30% 27.32% 23.80% 23.40% 23.60% 24.70%Gross Profit Budget 24.2% 24.1%Net Operating Profit Actual 8.60% 18.86% 13.70% 12.80% 12.40% 13.30%Net Operating Profit Budget 13.6% 14.7%R&M Actual 0.80% 0.91% 1.0% 0.9% 0.9% 1.0%R&M Budget 1.1% 1.0%Stock write-offs vs T/O (%) 0.00% 0.00% 0.0% 0.0% 0.0% 0.0%Conformance % 78.06% 210.40% 83.73%

Customer complaints ratio 68.9 51.7 23.36 60.35 35.16 19.55

Food Safety Pass Rate 64.5% 85.0% 68.0% 68.0% 59.0% 59.0%

No. of accidents reported 0 0 0 1 0

Overtime Actual 18.3% 10.1% 12.3% 21.4% 11.6% 12.2%

Overtime Budget 4% #DIV/0!

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Quality Control , Assurance and Food RegulationQuality Control , Assurance and Food Regulation

• Quality of product is a definition of the consumer’s expectation• Manufacturing must become more consumer facing• Evolution from Quality “Control” to “Assurance”• Process control gave rise to Quality Assurance• Quality affected by plant reliability• Quality has direct impact on cost• Quality is somewhat negotiable• Food Safety is a non-negotiable element• Food Safety program integration into QA program• Opportunities within QC, QA, FS are many, but the main aim of

this is the protection of the consumer to:• Deliver to the consumer’s expectations• Ensure the consumer is not harmed by the product

Quality Control , Assurance and Food RegulationQuality Control , Assurance and Food Regulation

Fl ow Descr ipt ion par amet er s Ref er ence doc Receiving Potatoes Potatoes received and

QC tested A,B,C grade or reject Raw receiving and QC

inspection procedure

Receiving Oil Palm and Sunflower oil received

5mm oil strainer Separate oil lines

Strainer inspection proc. Oil receiving proc.

Bulk Handling 6 x 100ton bulk bins Max 24 hrs storage Bin ventilation on

Potato bulk storage and transport procedure

Wet Receiving Pot’s transported via water flume. Mud settling

Max 5% mud removed. Potato bulk storage and transport procedure

De-stoning Stones removed via vortex settling tank

99% non-embedded stone removal

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Peeling Steam peeling of 200kg/14 sec cycle

121degC/min 16bar potable steam

Peeling procedure

Barrel Washer Loose skin removed by mechanical tumbling

Max 5 min retention time Peeling procedure

Peel Vision System PVS controlling peel time PVS set to A, B, C grade. Peeling procedure

Inspection & Trimming (New CCP2a)

8 inspectors to remove FO’s and trim defects

FO’s removed/reported Max 7 stones <5mm/hr

Inspection and FO removal checklist

Pre-heater Potatoes tempered for cutting

55-60 degC/25-75 min (depending variety)

Pre-heating and cutting proc.

Metering Tank Cutting start/stop control with M/T auger

- Pre-heating and cutting proc.

Water Cutters

Mechanical Cutters

Cut to 7,10,12 mm or 11mm crinkle cut

Water cut 0.5-0.7 bar Cutting and tube size control checklist

Optical Sorting Defect strips removed to ADR

Max 23% defects @ 17 t/hr line rate

Tegra/ADR best operating practice BOP

Auto Defect Removal Defect strips cut to 80- Max 25 defects/1.7 kg Tegra/ADR best operating

Quality Control , Assurance and Food RegulationQuality Control , Assurance and Food RegulationThe Consumer Protection ActThe Consumer Protection Act

• CPA regulates supplier activities for the consumer’s rights• Suppliers of goods & services and their agreement/transaction

is covered by CPA• Amongst others, the CPA prohibits unwanted/misleading

marketing or descriptions, unjust pricing, assumptions made on the part of the consumer, supply of unsafe or hazardous goods.

• CPA obligates plain descriptions, clear and full disclosure and product return/refund if unsatisfied

• Many other regulations including:• R918 - Food premises and transport regulations• Food Cosmetics & Disinfectants Act• Trade & Metrology Act

• Opportunities within regulations is to align business with regulation or company policy (whichever is stricter)

InnovationInnovation

• Innovation is the creation of better or more effective products, processes, services, technologies, or ideas

• New product development keep markets interested• Process innovation keep companies competitive• Innovation must follow a process:

• Concept• Investigation on feasibility• Time plan• Testing, implementation and commissioning• Performance measure• Hand-over and sign off• Post implementation evaluation

• New products or process are disruptive and must be controlled and monitored closely

• Companies who innovate succeed!!

Market Development & ExportMarket Development & Export

• All engineering disciplines “play” in the food industry• Mechanical• Electrical• Civil• Industrial• Food engineering

EngineeringEngineering

• EU and US exports are very static• In recent years Africa export is a huge focus for SA• Challenges & opportunities in Africa export is distribution and

logistics.• Must understand importing country’s regulations

Thank youThank you

Food industry has many challenges but so many more opportunities!