Innovation, Investment Go Hand-In-Hand
When Mars Chocolate North America launched the M&M’S Pretzel earlier this year, I’m sure there were consumers out there who wondered what took them so long. After all, it’s not like rocket science.
No, don’t worry, I won’t get into hiring a rocket scientist - that was last month’s editorial. Nevertheless, as any confectionery technologist or operations person can tell you, it’s not always easy taking a concept and carrying it through all the way from bench-top to the candy shelf.
As Todd Farrell, plant director of Mars’ Cleveland, Tenn., facility, points out, panning a pretzel ball to produce a perfect M&M is a lot harder than it looks.
“Whenever you introduce a new sized center [for a new M&M’s variety], you’re introducing a new density into processing, which demonstrates different behavior,” he explains. “There are significant adjustments that have to be made along the way.”
“It’s the rolling of the product that’s key to the final appearance,” Farrell asserts.
Despite the challenges, Cleveland’s management team was able to “roll” out any bugs in the process within an aggressive six-month time schedule. In fact, the whole launch was a full-blown, 360-degree company effort as this month’s cover story relates. Interestingly enough, the company’s purview of depreciation helped Mars make the necessary investments.
As Farrell explains, Mars takes a slightly different approach toward depreciation than most companies. In doing so, it can take advantage of breakthroughs in technology and automation.
Using a “Return on Total Assets” or ROTA application, the company doesn’t every fully depreciate its capital investments in processing lines. For example, a particular piece of equipment that was purchased 10 years ago for $300,000 remains on the books as a $300,000 piece of equipment, Farrell says.
Thus, as technology evolves, it’s possible that certain pieces of equipment that cost $300,000 a decade ago now cost only $150,000. Moreover, the new equipment often delivers improved outputs and enhanced flexibility, not to mention better sanitation.
“ROTA really encourages removing obsolescence,” Cleveland’s plant director says. “Given the tremendous price pressures on ingredients today, such as cocoa, dairy and sugar, manufacturing has to be efficient.”
It also has to be safe and thoroughly traceable. That explains why Mars’ Cleveland facility was the first North American confectionery site to receive a FSSC 22000 certification, an international standard for the food industry that incorporates a management approach with the best food safety practices.
When it’s all said and done, there’s a tremendous amount of pressure these days on operations to perform. Luckily, ingredient, processing and packaging suppliers recognize the demands and are working hard to provide solutions.
Those solutions, however, require an enlightened attitude toward investment. With the economy ever so gradually slumbering out of the recession, now’s the time to seriously look at strengthening one’s position in the market through innovation and investment.
