Sunday, October 13, 2013


The world has traveled a lot since the industrial revolution which brought about the concept of economic viability for industrial production. Over the decades the mantra was to make production plants bigger and bigger without much focus on sustainability, especially when fossil fuels were available in plenty and that too cheap. Time has changed after the "oil shock" about 4 decades ago when fossil fuels became expensive and realization dawned on the humanity that they are not inexhaustible leading to sterling innovations in the energy front. Large scale mechanization of unit operations, evolution of giant manufacturing plants with lesser and lesser workers needed to manage them and integration of electronics with plant operation for better efficiency all saw the industry in general piling profits with apparently no concern for the environment or the welfare of workers or the consumer well being. Things are changing as new concepts are emerging with features like energy efficiency, water saving, waste disposal, improved worker welfare, down sized plants with better controls and back up facilities in case of break down etc becoming bench marks of newer plants. Here is a commentary on these emerging trends which cannot be ignored by the industry if to survive in the coming years. 

Bigger is better was the industry's mantra through much of the last century. Cedar Rapids, Iowa, holds two prime examples: General Mills' million-square-foot facility and, across town, Quaker Oats, a 22-building complex on 25 acres fronting the Cedar River. Centralized manufacturing enabled low-cost production, but the downside of the eggs-in-one-basket approach became painfully obvious over time. An electrical substation fire once took GM's plant off line for 18 hours; a 2008 flood knocked Quaker completely out of commission for three weeks. By the time full operations resumed two months later, lost throughput at the world's largest cereal plant would have fed a small country for a year. Regional production is today's trend, and that will continue. Logistics dictate site selection, and hauling finished goods halfway across the North American continent doesn't make economic sense. Diesel generators and even solar panels are being installed as a hedge against power outages, and energy conservation efforts increase the likelihood that at least partial production will continue in a worse-case scenario. Smaller facilities are being laid out for maximum flexibility. The Dr. Schar bakery in Logan Township, N.J., exemplifies this. Riding the crest of the gluten-free diet trend, the Italy-based company opened the 60,000-sq.-ft. plant in the Philadelphia metro area in June 2012. More than 100 different products are produced, the company boasts, from breads to cookies and crackers to pasta. It was the company's fourth new facility in six years. Equipment is getting easier to clean and sanitize, in part to meet higher food-safety standards but also because managers recognize that older designs mean more downtime and much higher labor expense over a machine's useful life. Stainless steel is the material of choice, and suppliers are redesigning their equipment to meet cleanability expectations.

As far as food industry is concerned, notable changes were taking place to make the manufacturing more sensitive to consumer safety and health. But the "profit at any cost" mentality is still ruling this sector with the industry being hauled for many ills of the society. Blaming food industry for many modern day health afflictions like CVD, Kidney ailments and Obesity is more or less become a standard criticism from which it cannot easily escape. Here again winds of change are perceptible with many large players trying to improve their products from nutritional and health angles and implementing many worker welfare programs. Energy and water are receiving priorities. It is a question of time before industry performance norms become more and more rigid and universally applied. This makes one wonder whether world is going back to the earlier concept, "small is beautiful" which may be good for the industry, environment as well as the consumer.  


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