Selling food, beverages, or pharma products in 2022 will be very different than before. Historically, most food and beverage manufacturers have used some combination of production strategies to develop their products, but recent supply chain disruptions and consumers’ desire for variety are forcing many to rethink their approach.
Traditionally make-to-stock (MTS) is a “build-ahead” production strategy in which manufacturing plans are based upon sales forecasts and/or historical demand. A company using this approach would estimate how many orders its products could generate, and then supply enough stock to meet those orders. Form-fill-seal roll stock machines make the least cost pouches using this method.
The opposite method is make-to-order (MTO) which is a production approach in which products are not made until a confirmed order is received. This typically allows consumers to purchase products customized to their specifications. Our premade pouch fill-seal machines allow this flexibility in running many short run products with low waste.
We are seeing a shift to the MTO approach as companies increasingly seek out ways to optimize manufacturing costs — and there are a lot of costs tied up in huge stocks of inventory. After all, if low demand for a particular product outpaces its shelf life, you’re now throwing away money in the form of spoiled inventory. Make-to-order production requires specific planning and increased changeovers.
The MTS approach is more predictable: it operates under the assumption that you have a specific inventory to fill and repeats the process accordingly on a schedule. An MTS operation may only conduct changeovers every few weeks, in which case a three-hour changeover time, while not necessarily ideal, isn’t very consequential. The SN machines are designed for long runs and low waste using recycled or mono structure film specifications at best pricing.
MTO production is subject to the fluctuations of customer demand, it means more frequent changeovers to produce various SKUs whenever needed. As changeovers increase, changeover time becomes more significant and that is where the PSG LEE premade pouch fill-seal machinery leads the field in fast changeovers, low waste, and high efficiency. Think of a MTO-driven facility that conducts changeovers much more frequently. Each minute of each changeover now carries more weight, because the changeovers themselves have more opportunities to set your production efficiency back. That’s why optimizing changeovers is critical in make-to-order production.
The Production Manager has to plan changeovers and schedule packaging lines to run as you make product, so that packaging can continue as you shut down the production line for cleaning. A well-run plant always has, if possible, a processing or packaging line running and plans to minimize idle time during changeovers.
The decision to change to MTO approach also marks a shift in how raw materials are sourced. Rather than maintaining a large inventory of raw ingredients in storage, making to order requires management of just-in-time (JIT) delivery, where the facility receives goods as close as possible to when they are needed.
