Transforming NPDI with Enterprise Recipe Management

ERM can reduce the time needed to look for data, create master recipes, and make planning and sourcing decisions.

Erik Nistad, Mondelēz International
Erik Nistad, Mondelēz International

The supply chain organizations of today’s manufacturers are under constant pressure to find opportunities to drive efficiency, productivity and speed to market. At the same time, they are struggling with the proliferation of products driven by competition, consumer preference, regulatory requirements, specific production facility capabilities, quality and commodity pricing volatility. Combine these factors with the need to increase supply chain flexibility to plan and source products across multiple geographies, facilities and lines, and you end up with a communication and information challenge that does not lend itself to “speed.” The drive for speed and flexibility encounters a barrier at the human touch points in the new product development and introduction (NPDI) process.

In most organizations today, it takes significant human intervention and translation to describe the manufacturing steps and key attributes needed throughout the phases of product development. Typically, the information within this process is loosely captured and mostly documented in unstructured information sources. Fortunately, industry standards such ISA 88 (recipe standards) and ISA 95 (material, equipment and personnel standards) have been created to enable a common structure or language that can be used to describe an enterprise recipe management (ERM) process.

A standards-based framework enables the development of ERM information systems that digitally connect product development organizations, engineering organizations and manufacturing operations, while simultaneously taking into account specific regional and manufacturing operations capabilities. The following benefits are a few examples that illustrate the magnitude of the opportunity:

Reduction in search time for data: Estimates of time spent looking for data in the NPDI process range from 20 to 50 percent because data is not centralized, not in a standard format, and often not electronically available to all parties.

Reduced time to create master recipes: The ERM process defines an “assemble from best practices” method, which can reduce the time to develop master recipes by 50 to 80 percent.

Shorten manufacturing planning and site sourcing processes: Planning processes typically require site-level knowledge of what materials can be used and what equipment constraints can be met. ERM combines site knowledge (equipment definitions and capabilities) with general recipe information to assist in planning and sourcing decisions.

There are many challenges that stand in the way of achieving this digital supply chain. For multi-site manufacturers, many manufacturing lines have been created and modified over time, optimizing the individual process at one site or for one process or product. This has led to a proliferation of inconsistent definitions of production lines, with a mix of technologies from many equipment and technology suppliers. Each site has been focused on its own productivity agenda, existing product mixes and capabilities, optimizing the site and often driving competition between sites. This has had a tendency to limit cross-site information sharing and create suboptimal performance across a multi-site operation. ERM, however, provides the opportunity to bring these worlds together through a common language and framework to digitally connect the worlds of product development and manufacturing execution.

ERM establishes the common language and critical attributes needed across an organization to make a product to specification with the right quality and customer/consumer preferences. This common language can then be leveraged as the communications vehicle from R&D through to manufacturing execution. It describes an organization’s manufacturing processes and critical information attributes all the way down to the equipment to be used in production.

With this common language, the opportunity now exists to build information systems that leverage industry standards to automate the transformation of product information from general to site to master recipe. Through this transformation process, critical product information can then be consumed by all systems throughout the process, allowing for speed and flexibility across the supply chain.

A MESA public webcast on this topic is scheduled for May 20. Find more information and the MESA white paper on ERM at www.mesa.org. MESA members can also join the working group to continue deepening their understanding of this transformation.

>> Erik Nistad is a director in the Global Integrated Supply Chain IS team at Mondelēz International, and vice chairman of the Americas Board of Directors with MESA International (www.mesa.org).

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