From drinks packaging to process management: an interview with Tetra-Pak28 October 2021

Image: ?????????

Tetra Pak was originally a packaging company, making liquid food brick packs. Through acquisitions and mergers, it has acquired process capability for almost any kind of liquid food product, including cheese. It is also marketing its process know-how as consulting expertise, and published a white paper, ‘Unlock the hidden factory,’ available via Will Dalrymple spoke to director of services solutions Ian Hughes

Q What are you selling?

A “We offer solutions for customers that are suitable for their environment and their level of maturity. One of the challenges that we face is that everybody thinks that industry is all digital and all industry 4.0 is up to level 7, but it’s anything but. What we try to do is offer customers solutions that are much more based on need.

“The white paper is a means to an end: how to make operations more effective, how to make people better informed so they can make better decisions. With visualisation, we are on a journey. We developed our own data systems, but found it didn’t improve the outcome. We found that data on its own isn’t enough; you actually need to help people run an operation more effectively.

“One of the big challenges that we’ve seen, at an executive level, is that people want more data, more information, but it is dependent on manual operations; people on the shop floor doing stuff. Those people are better placed to make decisions to drive efficiencies, increase yields, reduce discharge effluents, for example. Sometimes we lose sight of that.”

Q How do you deal with the fact that customers may not know what they want?

A “We have a whole process that we go through with customers, to understand what is their strategy, what are their opportunities, what do they want to achieve, what are the competitive issues that they are facing. We go through an analysis phase to understand what we can do to improve to reach the target and improve competitiveness and improve their sustainability goals.

“Information is the key to all of this. We’ve been doing one with a customer in South Africa. We have to understand the total cost from that site; what is the cost of a litre of milk. We build sophisticated models so we can understand that. The food industry tends not to do activity-based costing, although other industries such as automotive do. So they don’t have an insight in how they can reduce cost or reduce effluent.”

Q How does that break down?

A “We take a lot of financial data from the customer and put it into models. We look at the consumption of media, and put it into the model. We look at assumptions; the costs and outputs, as well as CO2, using some of the tools we have got. One of the reasons why I am in Cape Town is that we bought a company that has contributed to this analysis. I manage this process.”

Q How did Tetra Pak get into this?

A “Originally we did it ourselves. Our own supply chain has a programme: ‘world class manufacturing’ that involves Japanese-style total productive maintenance, continuous improvement.

I was responsible for that for 10 years, and building up that capacity in Tetra Pak. We didn’t have modelling capacities. But we built some tools and have partnered with the company we bought. It builds models, and it made sense to buy it so we had the capability in-house.

“It’s a bit too far to call it a digital twin. The models are accurate representations of production models from a cost analysis point of view. And we can run scenarios in that tool. If we agree with the customer about wanting to achieve certain goals, we can simulate what that means.

“The next step is to create a proposal with the customer with various guarantees. The highest level is a transformation cost guarantee. Or it might be a performance guarantee. Then we put together a programme of how to achieve that. Some elements of the performance might be the traditional part – maintenance. We might create a proper asset maintenance strategy. What is new is that we are going above and beyond Tetra Pak assets. Our customers have significant assets other than our own, so we can do that with customers. We can provide solutions to manage all of their assets. Or we can move more on a business outcome, what processes do we need to change in the factory; how do we upskill people, and then we go back into TPM [total productive maintenance].”

Q Is this servitisation?

A “That is our vision, and our 2030 strategy is to have a significant proportion of customers servitised. We can offer a subscription-based business model that tells them how much it costs to make their products, and then they can focus on sales and marketing rather than manufacturing.”

Q How do you go about providing servitisation?

A “We have to understand what the customer is good at. The person that is best placed should be doing the action. Through models and data that we can extract from customers’ systems, and measurements of equipment, we are able to have a fairly dynamic picture and can manage that. We work in partnerships. That’s the key. As long as we work together, they can outsource to us, or a third party, certain activities.

“What they do and what Tetra Pak does would be to look to improve the way they work through better decisions, improved methodology to attack losses, to improve sustainability and deliver better performance. That’s a mechanism of how to execute it. And management processes have to be done at a senior level, to make sure all tracking and monitoring is providing relevant data to KPIs that deliver performance. Ultimately customer success, which relates to the top and bottom line, is much more complex in terms of the inputs. We need to understand the levers to achieve that.”

William Dalrymple

Related Companies
Tetra Pak Ltd

This material is protected by MA Business copyright
See Terms and Conditions.
One-off usage is permitted but bulk copying is not.
For multiple copies contact the sales team.