Cost savings through collaboration

In its rescent report, ‘A Recipe for Resilience’, RS shines a spotlight on key challenges facing the industry, and offers insight into the solutions and strategies being deployed to help mitigate impact, and enable sector operators to maximise innovation and growth opportunities.

Craig Stasik, industry sector manager for food and beverage at RS, said: “It’s a very challenging environment right now for food and beverage manufacturers that are operating on tight margins with high output facilities. Combine that with the challenges facing the wider business world and it makes for tough operating conditions.”

Food and beverage is the UK’s largest manufacturing sector with12,195 operators employing 486,500 people and yielding a £148 billion turnover, according to the latest figures from the Food and Drink Federation (FDF). Rising production costs have been driven by higher energy, water and wastewater bills, as well as regulatory upheaval – and not all can be passed onto the consumer, so manufacturers are having to absorb the difference.

“Commodity prices are one area of concern for food and beverage manufacturers, but there aren’t many conversations where energy isn’t mentioned either. The cost of it is always a concern in this energy-intensive industry,” added Stasik. “Then you have regulatory changes like the new High Fat Sugar Salt (HFSS) legislation forcing product reformulations, Extended Producer Responsibility (EPR) for packaging, and the growth of environmental, social and corporate governance (ESG) targets linked to reducing greenhouse gas emissions. Add to that the increase in National Insurance contributions for employer, and ood and beverage manufacturers are faced with trying to recoup all that from elsewhere within their operations.”

A Recipe for Resilience also highlights the pressure to drive efficiency, and one key area for this is maintenance. Stasik states that many customers are finding ways to run tighter operations with lower cost overheads.

“Energy efficiency really jumps out as a key lever,” he said. “This can mean introducing smart monitors to track energy usage and consumption, or exploring a move to LED lighting, which can be a quick win that reduces costs and supports ESG targets.”

One RS customer, cited in the report it made significant savings after making a simple switch, with the advice and help of RS, to an alternative lubrication for a canning machine. The move to an alternative product saved the company £48,030 when filling the 200 litre drums across all five of its machines. As the switch to a new product was driven by the original one not being available, had a fast, alternative option not been sourced, the hourly downtime cost would have been £1,333. For a plant operating 24/7, this could have escalated exponentially.

Another customer worked with RS to get kits with critical spares on site and where they need to be, ready for inevitable breakdowns. These kits allowed the maintenance team to get started as soon as a problem occurred, keeping downtime to a minimum, which is vital on a site operating 24/7 and where the average hourly cost of plant downtime can be upwards of £5,500.

Stasik said: “The ability to outsource certain tasks or functions allows a customer to free up resource. Considering skills shortages, looking to suppliers to fill the gap makes even more sense for specialised or technical tasks you do not have, or want to have, in-house. This includes procurement, inventory and stores management, as well as maintenance solutions. Plus, a specialist provider executing a thermography study, for instance, will have the best kit on the market.”

Strategic procurement is key to reducing costs and improve efficiency, according to the report, and remains central to resilience which is crucial in a high-change environment. Consolidating spend can help businesses stay lean, reducing exposure or risk from disruption.

Stasik concluded: “Against a backdrop of mounting industry pressures, reducing overheads through more efficient operations looks set to remain a popular strategy. Outsourcing to experienced external providers enables Food and beverage manufacturers to optimise innovation potential without investing in additional in-house resource. This is valuable in areas like maintenance solutions, procurement and inventory services. These kinds of solutions and services make MRO more efficient, help ood and beverage manufacturers progress ESG goals, meet compliance, and free up resources that can be directed to more value-adding activities.”
 
A Recipe for Resilience is available to download now at:

uk.rs-online.com