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Drive out inefficiency and waste with TDC

22 June 2020

Food Processing spoke to Niall McRory, from the Product Inspection Division at Mettler Toledo, about why food manufacturers should consider using Total Delivered Cost as a means of underpinning investment decisions. 

Q: What is Total Delivered Cost (TDC) and how does it differ from other assessment methods like Total Cost of Ownership (TCO)?
TCO, as a measurement, uses a relatively narrow set of data points and is therefore only of value up to a point. TDC is a more detailed financial calculation, which quantifies how technology such as product inspection equipment can contribute to reducing the amount of money it takes to manufacture and deliver packaged food. Essentially, TDC is more comprehensive than TCO as it takes account of all operational costs, including the physical product as well as factors such as packaging, labour, quality checks, waste product, and transport. 

Q: Why is TDC important for food manufacturers?
Today the global food industry is more competitive than it has ever been. That means packaged food manufacturers must do whatever they can to shave even the smallest amount off the cost of what they produce. TDC provides a good measurement for achieving that aim, as it takes a broader view of how new equipment can help reduce the cost of producing their products.

Q: What does TDC mean for inspection equipment providers?
For equipment manufacturers, TDC requires a strong focus on features that help customers to drive out inefficiency and waste. TCO was quite narrowly focussed on issues directly related to the asset, such as reliability and uptime. TDC, on the other hand, takes a broader view of value, encompassing factors such as reducing set-up times, minimising false rejects and improving energy efficiency. It is about developing machines that are quicker and easier to use and produce less waste. This all helps customers to lower costs.

Q: Can give an example of how product inspection equipment can help packaged food manufacturers reduce TDC? 
Let’s take metal detection as an example. An essential part of the quality assurance process is to ensure that the metal detector is continually detecting contaminants at the required level of sensitivity. To achieve this, regular checks must be carried out – a time-consuming process that also impacts the availability of the line, reducing productivity. 

Mettler Toledo has developed Reduced Test Mode technology (RTM), which means the frequency of performance monitoring tests in some metal detectors can be reduced by as much as 80%. 

We also offer an Automatic Test System (ATS) which provides further opportunities to reduce operational costs. Traditionally, testing throat metal detectors involved the manual introduction of test pieces, often working at height. With ATS, the test samples are dispensed automatically to simulate the presence of a contaminant in the most challenging position – the centreline of the product feed tube. From a quality perspective this process is more reliable than manually inserting test pieces which could incorrectly pass closer to the side of the aperture where they are easier to detect. From an operational aspect the testing time is greatly reduced, and safety is also enhanced since ATS removes the need for personnel to work at height to carry out the test.

Q: You mentioned that reducing waste is a key part of TDC. What progress is being made in this regard?
Waste comes in several forms, but false reject rates (FRR) – where good product is discarded in error – is a key area for improvement in food production. The cost implications of high FRR are potentially immense due to the re-testing, reworking or disposal of ‘good’ packs that are mistakenly judged as having been contaminated. The introduction of advanced x-ray inspection software automatically sets the best possible level of foreign body detection. Inspection accuracy and tolerance to natural variations in the pack are increased, thereby minimising FRR. Unnecessary waste and rework costs are avoided, which in turn protects profits for the food manufacturer. 

Q: How can food manufacturers review their product inspection processes in terms of TDC?
Ultimately, the impact that product inspection equipment can make in reducing TDC depends on the specific circumstances relating to production processes and the type of product being made. Before commissioning any new product inspection or production equipment, I would advise that packaged food manufacturers should compile a checklist and request tangible calculations about financial reductions. This should cover false reject rates, product set-up time, quality/validation frequency, power consumption, and reporting time. Other factors include labour and maintenance costs. Each of these factors can have a significant impact on reducing TDC.

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