May 1, 2006
by James Dudlicek
For company on the rebound, plant improvements show Farmland means business.
New processing infusion system. New ammonia compressors. New boilers. State-of-the-art systems control. New box formers. New case packers. New robotic palletizers.
It reads like a dairy processor’s wish list, and it’s all happening at Farmland Dairies’ plant in Wallington, N.J.
And they’re welcome changes, to be sure, especially after several years of neglect and the watchful eye of bankruptcy court forced on Farmland by the financial scandal of Italian dairy giant Parmalat, its former owner.
“During the time of Parmalat, very little was invested in this facility, so we have a lot of catch-up to do,” says Mike Pedersen, executive vice president of operations.
Tim Barber, VP of operations, elaborates: “When we came out of bankruptcy, one of the main concerns the investors had was the infrastructure of the facility. It’s better, but it’s nowhere near where we want it to be, and there’s still a lot of time to get it done. If you come back in six months, it won’t look like the same facility.”
Celebrating a year out of bankruptcy, Farmland is making changes as quickly as possible.
“During the bankruptcy, there wasn’t a full determination that we were going to come out, so the money we spent was really for Scotch tape and glue,” says Marty Margherio, president and chief executive officer. “Because we’ve been operating at plan and better, [board members] allowed us to double up on our capital expenditures for one year. Our lenders gave us the ability to really get back to being a force in the dairy business, and that helps us a great deal, because it will help us get to where we need to be at a much accelerated pace.”
Barber outlines some of the changes, both recent and upcoming. “We’re putting three new boilers in right now, and within the next month they’ll be up and running. We’re going to be installing a new climate-control system in the facility; this state-of-the-art system will provide filtered air throughout the plant,” he says.
“We’re installing new boxing lines as well. It’s part of moving forward in our corrugated business. We’re looking at installing new case lines for handling our 24-quart plastic milk case and packers for the gallons as well. We added a screw cap to our quart line here. That allows us to have all of our Special Request and Skim Plus branded products with a screw cap. We have also placed an order for a new ESL processor, in order to improve out ESL processing capabilities.”
Furthering efforts to boost infrastructure and streamline operations is robotic palletization and evaluation of the plant’s automated storage and retrieval system. “We’re installing three robotic palletizers for all our lines to meet the increased demand for corrugated packaged products,” Barber says. “The three-station robotic palletizing system will handle up to 60 SKUs per station, with as many as four product configurations for each robot.”
Farmland also is pursuing a fleet replacement program, along with a truck-washing facility; the company recently ordered seven new trucks scheduled for delivery this summer. About 70 percent of the business out of Wallington is DSD or dealer-based; the rest is through warehouse distribution.
Peter Clifford, VP of human resources, saw few resources put back into the plant in the few years before bankruptcy. “What we’ve accomplished and are planning to accomplish in the next year is just tremendous,” he says.
Controlling Critical Points
Efforts to improve the Wallington plant not only enhance Farmland’s ability to make quality products, they go hand in hand with maintaining its standing as the country’s largest HACCP plant.
“When the concept of HACCP came about, we were very excited and interested in it,” recounts Emil Nashed, vice president of quality assurance and R&D. “The FDA was looking for small plants to volunteer. We were one of the largest, and they were a little bit skeptical that we would be able to establish the program. We worked with them, and it took us about a year to develop the HACCP plan. We have built teams for every department. We have created that kind of culture, which we are trying to foster within the organization. It’s everybody’s responsibility. For us at Farmland, quality is not only job number one, but quality is everybody’s job. Not only have we obtained the certification, but we have maintained the certification for the last three years. It’s a very tough audit; it takes about a week to do it.
“The FDA recently had a training course for their inspectors, and I’m proud to say they chose our Grand Rapids [Mich.] facility to show their inspectors what a facility ought to look like. We’re proud of that.”
In fact, the team at Farmland strives to reach beyond the highest quality standards, which is a plus considering the facilities are inspected by many different organizations, including the U.S. military. “HACCP is a fluid document. It’s changing all the time,” Barber says. “We’re always doing whatever we can to improve it.”
Constant improvement is something that managers say is elevating morale among the work force as the company regains strength. “What the HACCP program has really allowed this company to do is to bring quality to the grassroots level, so that it’s not a management program,” Pedersen says. “It’s a living, breathing program that runs true with all the employees.”
Farmland regards training as a high priority, but cost restraints during bankruptcy forced cutbacks in this area. But the company has partnered with the New Jersey Department of Labor to introduce an ambitious training program that provides essential training across all job functions.
“The whole training effort is to demonstrate that we believe our employees are important and we’re going to train them to do their job better and pick up individual skills along the way,” Clifford says. “We’ve got a very diverse work force. So we’ve got training going on this year with English as a second language to help employees become better employees and also become better citizens.”
Start to Finish
Of the 120 dairy farms in New Jersey, about half of them provide milk to the Wallington plant. Farmland procures its milk through Dairy Marketing Services and the Michigan Milk Producers Association.
Incoming tanker trucks are weighed, then offloaded to one of 12 raw silos after passing labs. Truck samples are tested for temperature, bacteria count, water added, antibiotics and somatic cell count, among other things. Further samples are taken from the silos, after processing and from finished product. “We believe it’s important to start with high-quality raw material to end up with high-quality products,” Nashed remarks. To that end, Farmland works closely with its producers to ensure a top-quality milk supply.
Samples of finished products are tested, then maintained for shelf life plus four days before being tested again.
Raw milk moves on for processing, either HTST or ESL, depending on where it’s headed among Wallington’s 16 filling lines. The plant processes 1.7 million gallons of milk weekly. “There’s no reason we couldn’t be at 2 million gallons very quickly,” Barber says.
Farmland packages its milk in both paper and plastic, the latter in gallon and half-gallon bottles made in the on-site blow-molding plant, which makes 200,000 bottles a day. Bottles to be used in-house are fed to the filling area on overhead tracks; other bottles are bagged for sale to off-site customers.
Products off the various fillers are packed into corrugated boxes, plastic cases or bossie carts. The lines include three plastic gallon fillers, two plastic half-gallon fillers, a paper half-gallon filler, two paper quart fillers and a bulk filler on the fresh side; the ESL side features three fillers for quarts, pints and half pints, and a half-gallon filler with a screw-cap applicator.
Finished products are stored in one of three refrigerated warehouses before shipping to stores or distribution centers. The three-high cooler system can hold about 50,000 cases.
Being the Best
One of the main challenges to processing Farmland’s line of products is boosting efficiency to reduce operating costs. To move toward that goal, the company recently implemented an improved preventative maintenance program — along with two new employees to help run it — to bring the plant up to the next level of productivity.
In and of themselves, ESL products present a challenge to processing due to their 55-day shelf life. There cannot be any deviations from processing procedures; problems that arise generally mean several hours to rewash and sterilize the equipment. Farmland’s philosophy is to not take any chances with food safety.
Strict adherence to procedures also is seen as essential to maintaining Farmland’s 99.9 percent produce acceptance level, a benchmark the company aims to surpass by constantly improving programs to ensure continued improved results. Farmland leaders consider the company’s products to be of superior quality, and they expect plant productivity to meet or exceed their lofty expectations as well.
And with the amount of improvement to infrastructure and training programs implemented since reorganization, inspiring confidence among the work force, any other result would be difficult to fathom.
“For the people here through the bankruptcy,” Pedersen says, “to see all this investment is really something.”
PLANT AT A GLANCE
PLANT AT A GLANCE
Location: Wallington, N.J.
Size: 140,000 square feet
Products made: Milk (regular, flavored and organic), juice, drinks, ice cream mix and ESL products.
Capacity: 2 million gallons weekly.
Milk storage: 37 tanks for raw, blended, pasteurized and sterile products.
Processing: Four HTST systems (95,000 pounds/hour and 65,000 pounds/hour), two ESL systems (30,000 pounds/hour).
Filling: 16 lines for gallons, half gallons (paper and plastic), quarts, pints, half pints and foodservice containers.
Cooler storage: 45,000 square feet
Farmland Dairies’ plant in Grand Rapids, Mich., packages aseptic milk products under the Parmalat brand, as well as a variety of other shelf-stable foods including broth, gravy and Parmalat’s Pomi tomatoes from Italy.
The 105,000-square-foot facility has nine filler lines, including a new pull-tab filler installed a year ago to affix reclosable fittings to aseptic boxes. Tim Barber, vice president of operations, notes that an automated palletizing system is being installed at Grand Rapids as well as the flagship plant in Wallington, N.J.$OMN_arttitle="Morale Boosters";?>