When to Conduct a Feasibility Study For Major Plant Decisions

Strategic planning series

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feasibilityIn this day and age of fierce competition and tighter budgets, food manufacturers are often faced with making critical—and expensive—business decisions as part of their strategic plan. Should you refurbish existing equipment or buy new equipment to meet your manufacturing needs? Should you add product lines to increase market share and what impact would that have on current operations?

Recognizing the importance and potential financial impact of these decisions, food processors often hire outside consultants to conduct a feasibility study of the options and provide recommendations. A feasibility study is an in-depth evaluation and analysis of the problem or opportunity with a thorough review of the operational and financial impacts of the proposed solutions.

Outside consultants often bring a level of objectivity and specialized expertise to a feasibility study that internal employees can not provide. This includes the experience to conduct a full plant capacity analysis; optimal layout and process flows; utility consumption/availability studies; and engineering, safety and ergonomic studies. All of this information will assist plant owners in making more informed decisions.


Feasibility studies can help food processors make the following decisions:

  • Expanding versus renovating a plant to increase production and improve operational efficiencies
  • Ingredient and/or recipe changes that may affect existing operations
  • The effect of adding new product lines on existing processing operations
  • Moving lines both intra-plant and inter-plant
  • Using a conventional warehouse versus an automated storage and retrieval system (ASRS)
    • Facility optimization
    • Achieving LEED certification
    • Manufacturing methodology and cost-effective use of existing assets.

Along with feasibility studies, food manufacturers are focusing on asset optimization to maximize the income-generating potential and productivity of existing assets. By analyzing depreciation value, maintenance schedules, sanitary design and operational history (including downtime) of each piece of equipment, a plant can make the necessary process changes to increase production to meet strategic plan goals.

 

If you’d like to learn more about feasibility studies, email me at jbove@stellar.net



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