INCREASING PRODUCTIVITY IN FOOD & DRINK MANUFACTURING

 

SME’s make up 97% of the UK’s food and drink manufacturing industry, and many faced rapid and serious cashflow concerns during the pandemic.  As such, many businesses are in a tentative space, cautious of growth or onboarding additional labour resources.

Many companies are asking, ‘how can we make the best of the assets we have, whether it’s the facilities or technologies at our disposal?’.  We know that people ultimately drive productivity, so the industry should be asking what it can do to inspire employees to be more productive?

 

The Garden of England – a benchmark?

As a Kentish Maid, born and bred in the Garden of England, I was sensitised from a very early age to the wonders of locally grown fruit and vegetables and the benefits of having a local butcher, baker and fishmonger on our proverbial doorsteps.

During summer holidays, me and the kids on my street would often be scrumping apples, pears and cherries from our local farmers’ orchards.  As we reached our teens, we would often be earning our first pay packets fruit picking strawberries, raspberries and black currants.

Controversially when the UK joined the “common market” way back in the ’70s, we began to see the demise of not just Kent’s producers but also the UK’s agricultural and farming industry.  Does anyone else remember the butter mountains and milk lakes that resulted from subsidies imposed on our farmers?

I have been dismayed to see the deterioration of our Kentish produce over the last half century, but having been back in the county for 15 years, I’m quietly optimistic that the recent seismic economic changes will revive the agri-food industry throughout the UK, not just in Kent.

 

Triple Blows to the Agri-Food Industry

As we now emerge out of the European Union, combined with the impact from Brexit and the additional strains the pandemic has reeked on the industry through the demise of the hospitality and brewing industries, many food and drink manufacturers are battling against a tsunami of consequences on their businesses from so many different angles.

• The labour market previously fuelled through the free movement of labour between EU countries has all but dried up completely, with the government now offering EU nationals residing in the UK up to £3,000 each to return to their native countries

 

• As a consequence of the labour shortages, the hotel, restaurant, and pub businesses are having to reduce their opening times as a consequence, forcing the producers to be more creative in finding alternative channels direct to the consumer.

 

• New trade deals outwith of the European community are being shaped every day by the government, with the most recent Australian agreement potentially impacting UK lamb farmers.

 

• HGV drivers are now also in short supply affecting the distribution channels of foods, and fears that supermarket shelves will suffer shortages. This may have a positive impact at a local level if consumers turn to their local shops and high streets, but it doesn’t help those businesses trying to make inroads into the broader national markets.

 

• The sugar tax, and recent regulatory bills being brought before the house of commons surrounding advertising restrictions on “junk” foods, are now adding additional pressure to the industry profitability.

No surprise then, the Office of National Statistics recently published that, compared with the 2019 whole economy industry average productivity levels of about £36.00 per hour worked, the food and beverage services industry was about 54% less productive.

 

Hope on the Horizon – Public’s Shift to Buy British

The SME businesses in this sector have to work harder than ever to ensure their survival in the markets. Productivity has to be the key focus if they’re to maintain their margins in a very competitive arena, with ever-increasing barriers.

However, according to a recent survey by Lightspeed GMI/Mintel, one glimmer of optimism for the industry is a positive shift in consumer attitudes, with 40% of shoppers surveyed agreeing that British food tastes better than imported. The survey also highlighted that

• 59% of shoppers agree that they try to buy British food whenever they can.
• 78% agree that it is important to support British farmers.

With this change in consumer thinking, the SME sector in the UK’s food and drink industry has an opportunity to capture the public’s spending power.  If you are going to be amongst the first to harness this opportunity, you are going to need to gear up the business operations, open up your local channels to market, and ensure your teams are productive.

 

Boosting Productivity – People & Process

In my years of experience in a wide variety of food and beverage businesses ranging from fizzy pop, whisky and wine, to chicken, beef and pork abattoirs, most SME’s are still heavily dependent on labour resources.

The larger corporates, such as Kelloggs, have invested heavily in technology, machinery and single operator plants. Still, the SME arena doesn’t have that luxury, tending to manufacture smaller (and fresher) batches, with a focus on artisanal, home-crafted produce.

Fudge Kitchen and Cook are two Kent-based firms that have successfully achieved steady and sustainable growth, adapted to their market, but are still reliant on a strong team of employees both in both production and retail, as they have chosen to market directly through their own retail outlets on the high streets as well as through supermarket chains and hotel chains.

The key to improving on that quoted 54% productivity cited by the ONS is maintaining high levels of employee engagement.  This requires a multi-angled approach of both technical Systems and the tactical Mindset through training.

 

Systems – The Technical

Firstly the technical side of your business, its operational Systems (not necessarily IT software), have to provide accurate real-time data that allows you to take regularly informed decisions before off-schedule conditions that deteriorate into fire-fighting get out of control.

Systems, however, also include the workflows and business processes that should define exactly how the work will be done to optimise productivity to best practice standards.  As new technologies or fresh ideas surface, then these standards may evolve and change over time. Still, as long as they are documented and disseminated to ensure the team adopts the correct procedures, then the systems will ensure that best practise behaviour is perpetuated.

Management control systems are the main focus of this approach. The design and development of meaningful, tangible Key Performance Indicators (KPI’s) are the drivers towards measuring the outcome of the workflows and processes as to whether they are the most effective to achieve the results.

A robust management control system will also provide data telling you where in the process the inefficiencies exist. In turn, this will highlight how much that’s costing your business (time, money, materials) and focus your managers’ reviews and collaboration with employees on reducing those weaknesses.

 

Mindset – The Tactical

The second strand is the Tactical, or training and generating a positive mindset. This relates to how you develop your people to ensure they agree with, have bought into, are trained in, and understand how to achieve your defined best working practice.

Training must be a core part of all managers roles –  to be consistently coaching, facilitating, mentoring and training each individual to ensure they are engaged with the best practice standards, understand how they can improve their individual results, and focus them on achieving success.

 

Tracking Your Business Culture Evolution

Your company culture may feel very intangible – how can you measure how engaged your staff are right now?

After spending many years searching for a powerful tool to monitor and measure teams engagement without spending large sums of money developing in-house software and potentially re-inventing a wheel that was already out there, Alluxi was delighted to be introduced to the EngagementMultiplier™ survey software tool and to become an EngagementMultiplier™ Partner.

EngagementMultiplier™ ticks all the boxes in providing a regular finger on your culture pulse. Every 90 days, an anonymous short survey provides both quantitative and qualitative feedback from everyone in the business, allowing you to pinpoint precisely who may be feeling any dissatisfaction. The data and metrics provided by the survey tool are integrated into your management information systems for your leadership team to work on addressing the issues.

 

The Key to Success

To achieve sustainable behavioural change, both the Technical Systems and Tactical Training strands have to be implemented together.  Without defined management systems and standardised working methods, the opportunity to perpetuate best practice is lost or diluted, and your results will reflect that.

Implementing new systems or methods without involving the people who have to work within these frameworks will not achieve their buy-in or employee engagement required.  There will be no unified desire to “make it work”.  Your system will then inevitably fail, leaving you feeling frustrated, and your company culture deteriorates to one of blame, criticism and negativity, productivity will drop, and your profitability will pay the ultimate sacrifice.

Many businesses invest in training on the other side of the coin, with employees returning excited with their new knowledge and full of ideas, ready to put their newfound theory into practice.  However, if they don’t then have the power or autonomy to make the necessary changes, then the time and money invested is wasted.  The manual sits on the shelf, gathering dust and the employee is disillusioned and demotivated. Your culture will stagnate as people lose faith that your business is capable of changing anything for the better.

 

Your Next Steps to Greater Productivity

In summary, to optimise the productivity of your teams and maximise your profitability, you need robust technical management control systems combined with well-trained, supported and engaged employees to create an evolved, effective team who will work together to achieve the results you seek.

Alluxi is here to offer you support through these times of change, bringing a facts and figures approach to evolve your business and realise your goals.

As a first step towards identifying your current business challenges and evaluating where your future opportunities exist within your business, we invite you to complete the Alluxi Business Success Scorecard.

Take 10 minutes to respond to the scorecard and see how your business scores in 10 key areas.  You’ll be invited to book a follow-up Productivity to Profit Breakthrough Session to discuss the results in more detail Kent-based and identify how you can implement rapid and measurable improvements.

GET YOUR RESULTS