It is a time of more challenges than advantages. Several ripple effects were felt through the feed industry, causing massive supply chain disruptions – the stockpiling, shortage of essential feed ingredients, and reductions in the workforce to name a few. All over India and around the world, the industry is grappling with transportation and logistical issues rooted in a pandemic fueled spike in business and the inability to find skilled (and willing) labor.
Supply chain disruptions are responsible for a steep increase in the price of raw materials and feed additives, decreasing feed industry profitability. Feed millers have to frequently change and adapt to new local raw materials leading to higher diversity in the ingredients being used.
To mitigate supply risks in raw materials, feed mill productivity, cost management, and quality need to have an inward approach towards their facility. With this RUPT (Rapid, Unpredictable, Paradoxical, and Tangled) situation managing the facility becomes most important.
We at RGS FEEDS, adopted a series of initiatives to optimize feed mills storage and supply chain activities and produced significant improvement in productivity, labor retention, cost controlling, and meeting the market demand even for very small quantities (as small as 1 MT) along with consistent quality.
In a feed mill design, space management can be a major constraint. To overcome this, we launched an initiative of “Conscious observation” of the flow of materials. It is segregated into Raw materials, Work in progress, finished goods, maintenance and repair and operations goods (MRO), packing and packaging materials, safety (buffer) stock and anticipation stock, transit inventory, cycle inventory, and excess inventory. Detailed quantitative and qualitative data is collected with respect to “time is taken for consumption” (From raw material inward to finished goods outward).
Experts like Mr. Kanagaraj and other nutritionists also provided inputs to mitigate supply chain challenges from formulating, sourcing, transporting, stocking, protecting, loading and unloading, waste management, material flow devising, labor demand, market demand, and variant expectation, and of course costing.
1. The material is segregated with the following objectives:
a. Usage of material (Raw materials, additives, packaging, machine consumables, spares, office stationeries, etc.)
b. Flow of materials
c. Cost of materials
d. Special need materials (Specific placement, cold storage, etc.)
e. Accessibility demand (Highly used to sparingly used)
f. Supply time (from purchase order to delivery at the factory)
2. Designing the Space
a. The flow of material
b. Staff and labor movement
c. Defining dumping, packing, stacking, loading, and unloading points with the specific objective of reducing the waste of time, labor energy, and material wasted
d. Ventilation and safety
e. Rodent and insect protection and prevention
f. Visual managing points and data display points
g. Contingency and emergency space
3. Implementation strategies
a. Removal of waste and unnecessary materials (Sorting method from 5S)
b. Strict and vigilant monitoring of the removal of scraps and materials is not necessary (in 24 hours)
c. Demand forecast for one month and segregated to weekly with 90% accuracy
d. Allocation of space for the materials category (RM to FG)
e. Maintenance schedules and reducing the downtime with respect to defects in machines
f. Tools and equipment to simplify the flow of the material and labor
g. Zoning of the entire factory and creating an internal team to manage and monitor
h. Supplier communication to provide “Just in Time” supply
i. Creating satellite inventory hubs through various supplier and distributor networks
j. Data capturing and analyzing to create minimum risk path
k. Training the staff and workforce continuously through clear feedback and performance indicators.
l. Incentives for best methods in implementation
m. Adopting new technologies
Implementation was not easy though. With the leadership’s support, every challenge was taken as an opportunity and every roadblock as a building block.
First and foremost was the removal of unwanted things! The worn-out die which might not be useful hereafter was scraped and removed from the closing stock.
Unplanned stocking (with limited silos) due to price fluctuations and supply disruption created chaos in production. A proximate change even with the same material from a different supplier resulted in customer complaints about quality.
Inventory reporting was designed. Data like quantity, cost per ton, proximate, etc. was easily available. However, a storage area visit was necessary to understand the stocking method to order the forecasted quantity. A diagrammatic representation was made and color-coded which proved to be a simple step but the multiple effects.
Floor managers improvised by presenting the “best before” attribute with the blinking of the material data and converting it into RED if we are crossing the danger zone. Plant operators and production planning teams utilized the same which resulted in reduced waste due to negligence. This actually created a great culture of quality mindset.
DORB bins are often cleaned for its molds and fungus formation. However, unprecedented rain brought new challenges. To overcome this, material rotation was managed with a production plan without affecting the quality of the material.
Data analysis showed the dumping of raw material as per the demand of the production was the main constraint. Taking the “nearest” material instead of “allocated” materially affected costing (proximate and other parameters including the raw material cost).
A simple method of dumping the buffer zone was devised that made the entire operation simple and cost-effective. The space (designed with a simple guiding diagram) next to raw material feeding (dumping) was converted into temporary “for the shift” storage. The workers split into teams to take the material “allocated” to this place and others to dump to feed the mill. It required continuous training to achieve the desired efficiency. This saved about 0.3% of the waste in the entire production.
The leadership team directed us to calculate the Current Space Utilization to know exactly how the space is used. Optimizing the space started with determining how much of the space is being used and what it is being used for. These space utilization metrics were important to determine the next steps.
The pareto principle was used to determine the optimum location for SKU. Sorted materials into categories and classification of each product according to activity. It helped to establish how quickly each product is moved and get allocated space on the floor based on the combo. This actually increased space utilization by about 23%.
Various internal discussions also indicated that the vertical space usage can be optimized by determining the height of the lot and material. Creating a mezzanine floor at some parts of the floor added more space without the addition of capital expenditure.
Space management is a profitable activity for Feed Miller. Following well-designed methods would give maximum benefits. Start with calculating the available and potentially used space then optimize with clear metrics. Use 5s and learn management methods of “Sorting “continuously to reduce waste and increase efficiency. Improving data collection and analytics to forecast accuracy would result in the reduction of excess inventory and decay in many cases. Putting vertical spaces in use to maximize space management.
By Balaji Sundararaman, RG Sundaram and Ramamoorthy Sundaram, RGS Feeds