eGuide| Taking Steps to Reduce Total Delivered Cost
With profit margins being squeezed, operations managers in food manufacturing need to make a robust business cases to secure additional capital expenditure for processing and packing equipment. To support this, Total Delivered Cost (TDC) is among the latest metrics utilized for the measurement of business performance.
In simple terms, Total Delivered Cost (TDC) is the sum of all operational costs including the physical product, packaging, labor for production and quality checks, waste product, waste packaging and transport.
This eGuide from METTLER TOLEDO uses the example of a US-based snack food manufacturer to illustrate how technological advancements in product inspection equipment – notably metal detection and x-ray inspection - can provide support in reducing TDC. This is achievable through -
- Reducing the frequency of equipment testing
- Automating the physical test procedures
- Minimizing instances of false rejects to improve efficiency and reduce waste
- Utilizing advanced software to optimize power usage and equipment set-up times
Addressing the above supports a reduction in TDC through increased process efficiency and improved product quality.