Tuesday, March 12, 2013

Supply Circle Management by Frito-Lay

After reading an article with title “Manufacturing Resource Productivity” by Stephan Mohr, Ken Somers, Steven Swartz and Helga Vanthournout, I am learning a new concept about supply circle management. Instead of using usual phrase “supply chain”, those experts use phrase “supply circle” to emphasize continuous cycle of supply chain when materials can be looped back into the production process after they have fulfilled their utility over the life of a product. One of manufacturer examples that I have found implementing this supply circle management is Frito-Lay. Frito-Lay is the division of PepsiCo that manufactures, markets and sells corn chips, potato chips and other snack foods. The company tries to achieve sustainable manufacturing by using this supply circle management concept. 

The picture above showed how the company optimizes resource for productivity in its supply circle management concept.
1.       Solar Concentration
Use sunlight to heat liquid-filled tubes by using long rows of reflective. The heat can reach up to 500 degrees. Then the hot fluid will be converted to steam, which heats oil for cooking.
2.       Photovoltaics
The solar-cell panels to generate electricity.
3.       Water-Recovery System
Recycle wastewater from manufacturing lines into drinking-water quality by removing bits of corn and potato. By passing it through bioreactor to remove broken-down starches and sugars, then filtering and disinfecting it using ultraviolet light and reverse osmosis. The clean water is then reused again to wash potatoes, cook corn, and make snacks.
4.       Co-Generation System
Frito-Lay's Killingly, Connecticut, and Kern, California, plants operate independently of the electricity grid by using a natural-gas-powered turbine that creates electricity and high-temperature heat converted to steam.
5.       Biomass Boilers
Frito-Lay uses products from nearby industries (for example, pecan shells, cottonseed, and wood waste such as sawdust and broken pallets in its Topeka, Kansas, and Arizona plants) as fuel for its biomass boilers, which generate heat and electric power.
6.       Stack Heat Recovery
When potatoes, which are 80% water, are sliced and fried, the water escapes as steam. Equipment captures the steam to preheat wash water and warm the building in the winter. When the water condenses, it's used to clean other spuds.
7.       Packaging
Over the past five years, Frito-Lay has eliminated 150 square miles of packaging by reducing the materials by 10%. This year, it's introducing the first fully compostable chip bag with its SunChips line.
8.       Food-Scrap Recycling
Almost every piece of waste generated at the plant is reused or recycled. The 20 million pounds of potato peelings and corn husks are sent to livestock farms for use as feed, and Frito-Lay consumes 150,000 tons less paperboard each year simply by reusing its shipping cartons five or six times each.
This is the result of water, natural gas and electricity use on Frito-Lay Beloit plant. The company can reduce its water usage by 50 percent, natural gas consumption by 40 percent, and , electrical consumption by 20 percent.

Seeing the result, I think this is a good example and every manufacturer should begin to follow the same path. The question is right now, is it applicable for different industries? Is it too costly so many manufacturers may not want to implement this new concept?

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