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The food and beverage space continues to evolve in response to consumer demand, production innovation, and resource availability. Numerous sea changes are poised to unfold in 2018, nearly all of which will affect producers’ bottom lines. Here are some of the impactful trends taking hold within the food and beverage arena over the next several months:
In recent years, food and beverage makers have embraced unorthodox production methods in an effort to engage increasingly conscious customers who not only demand healthy, all-natural food products but also prefer vendors that use sustainable processes.
In June 2017, the market intelligence firm Ipsos Research collaborated with Coast Packaging Company to conduct a nationwide study on consumer attitudes toward sustainability in the food and beverage sector. Approximately 42 percent of respondents attested to caring about “minimally processed” food items more than they did five years earlier, while more than one-quarter expressed interest in producers whose methods reduce food wastage.
These attitudes have forced producers to re-evaluate their workflows and have led to the creation of experimental food production methods, the most notable being cellular agriculture. This strategy involves engineering products in laboratories via cutting-edge bioengineering and tissue-engineering techniques that enable the creation and manipulation of cell cultures. Innovators in the space have been able to “harvest” virtually every food product using cellular agriculture, including animal products such as meat, dairy, and eggs, along with vegetables, according to Quartz. Early successes show the methodology holds transformative potential in an environment where available agricultural land continues to shrink, according to the Food and Agriculture Organization of the United Nations. Of course, cellular agriculture also opens the door to increased sustainability, allowing producers in the U.S. to take pressure off the more than 408,000 hectares of land they currently control and produce their products within controlled laboratories, according to the Organization for Economic Cooperation and Development.
However, brands have yet to convince consumers to embrace products created through cellular engineering. Messaging surrounding the topic will take shape throughout 2018, as advocates attempt to promote the natural roots of the process while opponents fight back by labeling the resulting food items “lab-grown.” Should the former group win the marketing battle, producers could find themselves making room in the budget for investments in cellular agriculture.
Consumers weathered multiple food safety breakdowns last year and are currently under threat from an international E. coli outbreak linked to tainted romaine lettuce, according to the Centers for Disease Control and Prevention. The bacteria-ridden vegetable has sickened more than 180 people across Canada and the U.S., and caused two deaths. This is not uncharted territory. Last year, the CDC conducted eight large-scale investigations addressing bacterial outbreaks related to food production.
These very public food safety problems have put consumers on edge. Chipotle’s recent struggles evidence increased public awareness of such issues. The restaurant chain suffered a massive E. coli outbreak during the fourth quarter of 2015 and has yet to re-establish its footing in the marketplace, despite mitigating the immediate problem in February 2016, instituting new quality control methods and investing in an aggressive rebranding campaign, CNN reported. In short, consumers are not as willing to trust food and beverage brands with black marks on their safety records, no matter what post-outbreak changes are made.
Food and beverage firms must keep this in mind as they navigate the market in 2018. They must ensure their safety processes and fail-safes are in place and compliant with modern production standards. A single slip-up could wreak long-term budgetary havoc.
Changing regulatory tides
A number of federal authorities have signaled that various regulatory changes affecting the food and beverage space could unfold in 2018, the most prominent being the U.S. Department of Agriculture’s potential repeal of the Organic Livestock and Poultry Practices proposed final rule, according to Lexology. On Dec. 18, the agency published an external communication requesting public comment on new guidance that would withdraw the rule, which would require organic livestock companies to refine their handling and slaughter methods to make them more animal-friendly. The OLPP was scheduled to go into effect March 30, 2018, but the USDA has since pushed the implementation date back to May 14. However, the agency is unlikely to allow the rule to take effect.
Farmers are divided on the decision. While some appreciate the USDA’s push to reduce regulations, others are concerned that lowering standards for animal welfare will anger customers, an increasingly large number of whom consider ethical farming practices paramount.
In addition to grappling with the recent OLPP decision, food and beverage producers are still digesting the U.S. Food and Drug Administration’s decision to discontinue the Food Advisory Committee. The group, established in 1992, dissected national nutrition and food safety trends, until Dec. 12 when the FDA announced that it was not renewing its charter. The agency cited inactivity – the FAC had not held an official meeting since 2015 – as the impetus behind the move.
Eight days after the FDA publicized its decision, a group of more than 10 public interest groups and seven former FAC members sent a letter to the agency asking it to reactivate the panel, Lexology reported. The FDA has yet to respond.
These developments signal a loosening of federal food and beverage production regulations, possibly laying the groundwork for higher revenues. That said, this approach could also increase operational risk, as producers working without strong guidelines in mind may end up rolling out substandard product that disappoints or, even worse, sickens food-savvy consumers.
With these developments in play, businesses in the food and beverage industry must re-evaluate their back-end and front-end operations to assess their respective levels of preparedness. Firms that need external assistance to effectively undertake these activities should consider connecting with USC Consulting Group. Our management experts can help food and beverage producers of all sizes adjust to the current marketplace and future-proof their operations for tomorrow.
Of the more than 62,000 employees working in American mines, over half staff maintenance departments, according to data from the National Institute for Occupational Safety and Health. This operational distribution has developed because of the ascendance of automated mining technologies, which have reduced the need for production personnel but increased maintenance demands significantly.
Despite the intensified focus on maintenance activities, firms in the sector continue to struggle in this area. Many are leaving efficiency gains and cost savings on the table. As research from EY revealed, many also depend on deficient communication strategies that separate maintenance and operations teams.
These less-than-ideal mining maintenance tendencies carry serious consequences – especially for mining companies with expansive open-pit operations where cost-effectiveness and operational efficiency reign supreme. Stakeholders at these sites can, of course, avoid financial fallout linked to declines in productivity by bolstering maintenance strategies. But before embarking on improvement efforts, open-pit leaders should pose some key questions to better understand their baseline needs.
Here are a few queries that might help mining maintenance leaders gather the data they need to move forward:
How are work orders processed?
Work orders constitute the backbone of maintenance operations. These documents and the internal mechanisms by which they move throughout the organization are critical in the age of automated mining technology. Yet maintenance departments within many firms do not have such formalized workflows in place to keep mission-critical assets up and running and instead rely on hastily delivered spoken reminders among technicians. This often leads to costly downtime and production pauses.
Ideally, mining companies should maintain digitized work order processes that allow operational staff to configure detailed service requests with all the information technicians need to make repairs in a timely manner. Open-pit maintenance leaders managing looser processes centered on in-person exchanges should embrace this methodology to make headway.
Is the right technology in place?
Mining technology continues to move forward at breakneck speed, catalyzing transformation in the industry along the way. Advanced tools such as automated drills and driverless trucks allow firms to mine continuously and reach new operational heights, according to the MIT Technology Review. Sadly, many of the back-end maintenance systems that support such cutting-edge assets are not as advanced and rely on nontechnical processes. Again, this creates risk.
To keep up with innovations unfolding in mines, open-pit maintenance leaders should adopt digital tools such as enterprise resource planning and computerized maintenance management software.
What is the ratio of planned to reactive maintenance?
Reactive maintenance strategies were common decades back. Now, with the rise of asset sensors and sophisticated data collection and analysis tools, organizations across all industrial sectors must maintain predictive methodologies to keep costs down and stay competitive.
Reactive maintenance is often four to five times more expensive than planned work, which is why firms should develop and sustain 80-20 maintenance ratios, wherein technicians devote 80 percent of their time to scheduled asset management activities and 20 percent to repairs. Open-pit mining operations failing to maintain such balances must work toward implementing proactive maintenance strategies designed to improve efficiency and reduce costs.
Mining maintenance leaders supporting open-pit facilities would be wise to kickoff improvement activities by answering these critical questions. Those in need of additional guidance should consider reaching out to USC Consulting Group. With nearly 50 years of experience, we can help open-pit maintenance stakeholders improve their processes and boost productivity. Connect with us today to learn more about our services and work in the mining space.