Australia-based manufacturing performance software company OFS analyzed the production of millions of liters of beer by breweries in an effort to determine key performance benchmark data. The findings, published in this Craft Brewers Benchmark Report, shows how data can be used to improve packaging line efficiency — what they call overall equipment effectiveness (OEE) — and make an impact on a brewer’s bottom line. The data shows that while craft brewers fare well in terms of speed and waste reduction, the industry average for actual time producing across the production line was just over 50%.
“For every 1,000 beers made, there are three minutes and 12 seconds lost to unplanned downtime on the packing line,” said James Magee, CEO of OFS. “There are over 50 ways this can typically happen, including equipment problems, raw material and packaging material issues as well as human errors. But it essentially means brewers are only producing just over half of the time the line is intended to be running, meaning less beer made at a higher cost.”
- The study also showed the average time between stoppages on the line was 11 minutes and 48 seconds.
- Despite these interruptions, craft brewers showed they can make it fast and by barely wasting a drop – with average scores of 98.6% for speed, and 99.7% for waste management.
But Magee cautions that the need for speed isn’t everything.
“Faster runs on the line don’t guarantee more output – they can often cause more stoppages and even add to waste over time,” he said. “Most brewers who know their good days from bad have identified an optimal speed for monitoring output over high, mid and low run speeds.”
Other efficiency opportunities were identified in the time it takes to set up a job – just over 49 minutes – with reductions here necessary for a better OEE. “The key message here is that craft brewers must pay particular attention to how they account for changeover time in the costing of products, because it’s likely taking longer than they think which impacts margins,” added Magee.
“Given craft brewers tend to have many SKUs, it’s imperative to accurately account for changeover time when scheduling and planning production, to avoid overtime and other issues arising from running behind plan.”
“There’s a difference between good beer and good business,” said Guy Greenstone, Co-Founder of Stomping Ground Brewing Co., which took part in the report.
“You need to know what’s happening on the production line for every single run, know your best performing batches and brews, product and pack types, how efficient your operations and your brewery really are, and how you compare to other more established brewers in the industry.”
Magee believes most brewers are not actually losing out by falling behind on these averages, but by not having the data to know how they are performing in the first place, and a false perception that the software needed to gain these insights is only for industry giants.
“Data and insights are everything in a manufacturing setting,” he said. “We frequently speak to brewers who don’t know how much beer they’re producing, how much they could produce, or what causes unplanned downtime. The inertia and an overreliance on outdated paper-based data tracking cause major inefficiency, hard costs, opportunity costs, supplier issues, and more.
“Harnessing this data is much easier and cheaper than most people think and can be achieved through simple, automated software that integrates manufacturing performance data in real time. The industry can combine better data with the ‘buy local’ mindset to gain a much stronger foothold in the beer we drink.”
The full report includes industry best-practice guidance for maximizing OEE, availability, speed and waste reduction, and is available here.