One of the most traumatic events that can happen to a food and beverage company is being required to issue a product recall. There’s the direct cost to consider—the loss of product—and in many cases the indirect costs of damaged reputation and loss of market share. While less immediate, these indirect costs are greater overall, their impact longer-lasting. Product recalls can be mandated for a variety of reasons ranging from undeclared allergens, mislabeling and contamination from either foreign bodies or bacteria. Sometimes it’s due to a problem with the raw material, such as this past summer’s salmonella issue with cucumbers. However, a substantial number of recalls are triggered by an internal issue, such as contamination within the processing facility, or a production issue, such as mislabeling (see graph of recent recalls below).
While not every root cause of an internally caused recall is production asset-related, many are, either directly or indirectly. Managing the recall risk is a powerful reason to invest in asset performance management (APM) in the food and beverage industry.
Improve Operational Risk Management
Successful food and beverage companies understand that managing risks is a mandatory core competency. What many fail to understand is how APM enables better operational risk management (ORM). To understand that, you first need to understand what APM is, and APM is more than equipment or asset maintenance. It’s also more than just condition-based or reliability-centered maintenance (CBM / RCM). It is true the roots of APM lie in applying historical information about asset failures to better predict future failures and hence move maintenance from being reactive to preventative and even predictive. What is happening now, with the advent of the Industrial Internet of Things (IIoT), is that real-time performance information is available for on-the-fly analysis instead of off-line batch processing as in the past. This means recalls can be nearly eliminated, at least if they are production-related. When you add in the power of new computational technologies, Big Data and Predictive Analytics, APM shifts from being a discipline practiced by specialists to simply assess risk of failure to a powerful tool to manage operations in real time using what-if simulation. Knowing what can trigger a recall is the best way to avoid a recall.
If you consider this expanded definition of APM, the potential in the food and beverage industry to leverage information about the production assets takes many forms. As noted in our report on APM in the Food & Beverage Industry, the top issue companies are dealing with is compliance with evolving food safety standards. With modern APM tools a company can actually analyze equipment performance and reliability, and hence potential for failure under different operating scenarios and assess the risks associated with each.
Another way to reduce risk with APM is to gain better understanding of the impacts of temperature in a process vis-à-vis equipment life and service intervals. Higher operating temperatures reduce the risks of bacteriological contamination but have negative impacts on product quality and equipment life. However, very high temperatures can often be used for processing, as the short exposure times don’t adversely affect food quality, but they do impact asset service life/intervals. With strong APM tools the asset performance issues can be better understood, and if warranted and economically justified very high temperature cleaning and sterilization cycles can potentially be managed to reduce contamination risks while not adversely affecting equipment availability.
Finally, with APM practices in place the potential for equipment failures during processing and packaging operations can be greatly reduced.
Foreign body contamination is greatly reduced when equipment is operating properly and APM ensures that your production assets do just that – operate properly. So it just makes good business sense in the food and beverage industry to make proactive investments in APM technology. Of the 30 recalls in the period 10/15/2015 to 11/15/2015 our assessment was that at least half could have been avoided if these companies had only leveraged the IIoT, predictive analytics and APM.
Learn more about APM in the food and beverage industry by downloading the LNS Research report, provided by GE.