Justifying capital expenditure (Capex) in today’s tough economic environment is probably more difficult than ever. For many food and drink manufacturers, many investment plans have been put on hold – apart from the most essential items.
That’s why some new guidance from food shopfloor control systems specialist Marco couldn’t be more timely. Marco has designed a guide to help project managers secure Capex approval and successfully manage projects in the food industry.
It outlines how to put together a strong case for Capex approval for an implementation, ensuring low risk and a rapid return on investment projects that can significantly improve productivity particularly in the ready meals and snack industry sectors.
Understand what they want to achieve
While it might seem obvious, Marco points out that project managers need first to broadly understand what they want to achieve. For instance, this may involve qualitative and/or quantitative deliverables such as improving productivity, reducing direct labour overheads and improving overall product quality.
Critical factory floor issues that have a direct impact on this can include reducing over-pack/giveaway through more effective yield control, eliminating unaccountable losses, reducing waste, improving product recipe formulation and consistency, and improving stock control.
However, Marco cautions that trying to implement solutions for all of these issues in one go can be both difficult and expensive, while a future-proof modular approach can be highly effective. It stresses that senior management will want straightforward justification for investment: defining the goals and key deliverables of a project. Therefore, targeting areas that present the best opportunities for improvement have clear advantages, it says.
To ensure successful Capex sign off, it is important for manufacturers to do their homework and outline functional design specifications. They need to identify potential suppliers and engage in preliminary trials to gather valuable factory floor data to form part of their presentation. Critically, the return on investment (ROI) case must be prepared with the help of suppliers, says Marco. Obviously, the involvement of Board level directors, particularly financial directors, is important to validate strong ROI.
Next, it is important to select the right supplier(s) for a specific project. Potential suppliers should be able to provide clear answers to questions regarding aspects such as their experience in the particular sector.
The involvement of all relevant staff, including shopfloor workers will be necessary, whose buy-in will be crucial, claims Marco. You need to appoint a ‘system champion’ someone who has ultimate responsibility to make things happen. To ensure success, it will be necessary to evaluate and set clear objectives based on the original specification and establish a documented installation plan. Equally importantly, you should be prepared to be flexible as the project progresses, warns Marco.
To get ‘buy in’ from the operational team(s) it will be necessary to adopt a collaborative approach, engaging with all parties concerned. Key members of the team will need to take ownership of the project by ensuring that all relevant areas of the company feel part of the project and contribute to its success. Most importantly, the benefits of any planned improvements should be clearly explained.
It should also not be underestimated the importance of clearly presenting the post installation successes of projects, including critical facts and figures, to ensure future investment from senior management.
For the full guidance visit Marco.