Effectively Improve Operational Efficiency for Food and Beverage Manufacturers

Are your food and beverage production operations running at World Class OEE levels?Learn how Parsec’s real-time operations and performance management software, TrakSYS™, will help you to take the next step in truly becoming a World Class manufacturer.Accelerate your 2014 improvement initiatives by reading this guide, “Effectively Improve Operational Efficiency for Food and Beverage Manufacturers.”

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Parsec Automation Corp. Phone: +1 714 996-5302 Fax: +1 714 996-1845 www.parsec-corp.com © Parsec Automation Corp 2014. All rights reserved. Parsec Automation Corp., Parsec logo, and Parsec product names are trademarks of Parsec Automation Corp. References to other companies and their products use trademarks owned by the respective companies and are for reference purposes only. EFFECTIVELY IMPROVE OPERATIONAL EFFICIENCY FOR FOOD AND BEVERAGE MANUFACTURERS Delivering Significant ROI with TrakSYS™ Effectively Improve Operational Efficiency Page 1 All print and electronic rights are the property of Parsec Automation Corp. © 2014 Abstract The predominance of sophisticated control networks has set the stage for some revolutionary advances in the utilization of detailed plant floor information that can drive the next round of food and beverage manufacturing improvements. Optimizing Asset Utilization in order to maximize the productive capacity of existing manufacturing systems—before investing in large scale capacity additions—is the key to continued reduction in per unit manufacturing costs. With real-time operations and performance management software such as TrakSYS™ from Parsec Automation Corp., it is now possible to automatically collect and analyze detailed real-time and historical information, such as Overall Equipment Effectiveness (OEE), to continuously optimize the performance of all sources of manufacturing processes. In this operational efficiency guide, the author will show how real- time data collection tools, coupled with web-based delivery of critical manufacturing information related to downtimes and efficiencies, are allowing users of these tools to take the next step in their evolution as World Class manufacturers. Effectively Improve Operational Efficiency Page 2 All print and electronic rights are the property of Parsec Automation Corp. © 2014 Introduction The primary internal business objectives of many of today’s high volume manufacturers—whether they are producing pharmaceuticals, food/beverage products, electronics, or other products—have become remarkably similar. Repeatedly, business managers tell us that excellent product quality is presumed, while on-time delivery and a high level of customer service are also essential. The real differentiator between competing manufacturers that helps most to grow earnings is the ability to engineer and manage a process that results in the lowest possible unit cost when all factors are taken into account. Global competition and the quest for ever-increasing corporate profits dictate that manufacturing companies must constantly strive to produce at an ever lower cost. Given that many companies have already picked the low-hanging fruit related to business systems and supply chain, the author contends that a relatively untapped major area of opportunity lies directly on the plant floor itself: Asset utilization and production efficiency. Why? Look at the cost of owning and operating a production line: Capital equipment (depreciation), operators, maintenance technicians, supervisors, floor space, utilities, spare parts; the value of production time for high-volume lines certainly runs in the thousands of dollars per hour. Yet the vast majority of plant managers do not have a clear picture of their true operational efficiency, and they certainly don’t have the data that is required to drive continual incremental improvement. TPM (Total Productive Maintenance), Continuous Improvement (“Kaizen”), and measures such as OEE (Overall Equipment Effectiveness) are well recognized as providing high value, however, most out-of-the-box solutions that allow manufacturers to cost-effectively collect the accurate data required to support TPM and OEE don’t provide simplified reports of this critical data that is needed for operational improvement. Add to this, these out-of-the-box solutions typically require an extensive implementation process in both time and money, thus the cost to improve operational efficiency can dramatically increase. Therefore, a straightforward means of automatically collecting and analyzing the detailed real-time and historical information that is required to continuously optimize all sources of your food and beverage manufacturing losses will provide tremendous value. This value will be derived: ▪ By increasing output per shift and OEE for existing lines. ▪ When capacity is a constraint: Allowing large capital investments to be deferred, as well as deferring all the long-term operating costs associated with a new line. High volume production lines typically cost $1-10 million to build and can cost thousands of dollars per hour to operate. ▪ When capacity is not a constraint: Allowing for a reduction in overtime or in the number of shifts resulting in labor and energy savings. ▪ When new lines must be added: Reducing the start-up time and associated costs by providing accurate and specific data related to the frequency and duration of faults caused by each system in the line. With this, problems can be rapidly identified and resolved. ▪ By minimizing overall production cost per unit by continually monitoring and improving the process. Effectively Improve Operational Efficiency Page 3 All print and electronic rights are the property of Parsec Automation Corp. © 2014 The True Character of Losses In order to maximize food and beverage production efficiencies, it is essential to understand the key sources of Manufacturing Losses which typically involve: ▪ Planned Losses: Cleaning, preventative maintenance, no demand, development, holidays, etc. ▪ Operational Losses: Changeovers, stoppages, breakdowns, materials shortages, personnel shortages, quality checks, infrastructure failures (no power, no air, etc.). ▪ Speed Losses: Speed reductions or cycle time extension vs. the expected operational speed (intentional or otherwise). ▪ Quality Losses: Scrap product, time and material loss due to defective materials, rework. Since “Good Production” is defined as Maximum Possible Production, the reality is that many production lines or work cells in use today are operating at less than 60 percent, and in many cases even less than 50 percent. Hence, there is tremendous potential for improvement in current production processes. Another important insight that is confirmed by real data from users of automated data collection systems on high speed mechanized lines is that downtimes related to machine jams and other short stoppages occur much more frequently than the plant management team realizes. One hundred or more short stoppages per shift often occur on a single line, with each stoppage typically averaging one minute. Many operators do not even consider these short stoppages to be “downtime” given that there was no need to call maintenance; they are accustomed to dealing with the numerous jams and other failures that frequently occur on automated lines, and indeed consider it a part of their daily function. This operational efficiency guide will explain how utilizing existing instrumentation to facilitate the delivery of a comprehensive and versatile set of web-based real-time reports—and with the rapid identification of process areas and systems for improvements—together provide the best payback in terms of plant efficiency. TrakSYS™ quickly and efficiently integrates into existing operations to offer a complete solution that not only includes real-time reports, but also includes visual management tools and customizable dashboards providing a cohesive overview of your operations that indicate points for production improvement and optimization. Reducing Process Variability The running of a complex food or beverage manufacturing operation involves many factors. At the heart of any improvement program must be an effort to reduce the process variability. On a daily basis, plant operations teams seek to optimize the key elements involved in the process, which include: ▪ Equipment. ▪ Raw Materials (ingredients, consumables, packaging, etc.). ▪ People (operators, maintenance technicians, managers, planners, contractors, etc.). Effectively Improve Operational Efficiency Page 4 All print and electronic rights are the property of Parsec Automation Corp. © 2014 ▪ Infrastructure (business systems, communication networks, utilities, etc.). Unfortunately, reducing process variability is a moving target given the large number of sources of that variability, hence the need for continuous monitoring and easy access to current efficiency and downtime data. This allows process problems to be addressed in real time rather than after the fact, when the daily production target has already been missed. This also provides the potential for predictive maintenance, where a system is observed to be performing outside of its specified operating parameters and maintenance is conducted proactively, rather than reactively, after a major system failure. Key Elements of a Solution The most critical elements involved in taking a plant that may be running at 50 or 60 percent efficiency and providing the tools that will allow it to get to 70 percent during a one year period are: ▪ Management involvement to set the objectives and provide the focus required to get all team members understanding and involved in the efficiency improvement process. • The management team must also provide periodic reviews and ensure that the improvement processes and systems that are put in place are being fully utilized. • The team will typically involve members from Operations, Maintenance, Engineering, and Quality. ▪ An out-of-the-box solution that may be rapidly implemented and at a cost that produces a return on investment in under 12 months, as opposed to custom implementations which require a significant amount of capital and custom programming to implement, support, maintain, and enhance. ▪ Real-time data collection directly from the process equipment—typically via PLCs (Programmable Logic Controllers), OITs (Operator Interface Terminals), HMI (Human Machine Interface) systems, and plant databases. • This data collection should utilize existing plant data networks and industry standard communication drivers like OPC (OLE for Process Control), however, it should NOT require changes in the existing PLC, OIT, or HMI code, which can produce support issues, and in regulated industries, the need for revalidation of the line. • A component that selectively involves operators in the process but does not make the operator the key collector and classifier of the data. It should also be able to integrate with any existing shop floor PC or SCADA (Supervisory Control and Data Acquisition) system, typically through a browser-based interface. ▪ Web-based reporting via a standard browser that allows all team members involved in the improvement efforts to easily share information, or to allow equipment vendors to monitor the machines they are servicing. ▪ A wide variety of summary level and detailed web-based reports that provide different users the ability to understand the source of losses and to take corrective actions. ▪ The solution must be user configurable without programming; therefore, the system owner may keep the system in step with any changes in plant configuration, and the system logic may be modified as the plant operations begin to improve. Effectively Improve Operational Efficiency Page 5 All print and electronic rights are the property of Parsec Automation Corp. © 2014 ▪ The web-based reports should be self-configuring, so that as the plant configuration is changed, no programming is required to generate updated reports. This significantly reduces the cost of maintaining and fine-tuning the system as more data is sought as part of a continual improvement process. ▪ The configuration capability should allow the user to exclude consequential downtimes that are a result of upstream and downstream failures. ▪ Supplementary data such as SKU, package size, work order number, line speed, shift, etc. that will aid report users in understanding process issues, should be captured as a system goes down or comes back up. ▪ The solution should provide utilities that aid in the long-term support of the production monitoring system, such as the ability to archive a portion of the database, report on archived data, compress the database, output data as a .CSV file, and output the system configuration in XML format. As previously indicated, a key element of the solution for reducing process variability is to rapidly integrate an out-of-the-box solution that produces a return on investment in under 12 months. TrakSYS™ offers real-time visibility into production processes for production area managers and operators through web- based interactive dashboards that are easily arranged and quickly deployed, producing a positive and immediate impact on operations that can easily scale with your operations. To make the value proposition even more attractive—because of its versatile technology and small footprint—the cost of ownership is incredibly low. TrakSYS™ accomplishes this by leveraging the existing infrastructure of the factory, without disrupting ongoing production or requiring significant additional investment of resources and capital. Data Collection and Operational Intelligence Accurate measurement of equipment stoppages and their causes is possible today, typically by using existing instrumentation and plant networks. Many food and beverage plant managers, however, are unaware of either the advances in techniques for both acquiring and presenting the data in a meaningful format to enable production efficiency to be raised, or the potential return on investment implementing such systems can bring. Consequently, the prevailing method today of recording downtime is still the operator using a clipboard and paper, or whiteboard, and later transferring the information to a spreadsheet. This method is at best delayed; by the time the data is analyzed a day or week later, it no longer has significant value because the plant is now dealing with its current set of problems. Forthcoming examples will illustrate how TrakSYS™ can seamlessly synthesize operational intelligence into customizable dashboards, paperless reports, and alerts that automatically provide plant managers and operators with the critical information that they need, when they need it, and in a format that can easily be understood. The principle of Operational Intelligence is to maximize the operation of a line or plant by better understanding the causes of losses and by delivering efficiency data as expediently as possible to the right people. The optimization process must shed light on equipment issues, operational issues, maintenance Effectively Improve Operational Efficiency Page 6 All print and electronic rights are the property of Parsec Automation Corp. © 2014 problems, and vendor problems (i.e., equipment not performing to specification or defects in consumables and supplied raw materials). Many food and beverage factories, by virtue of having instrumentation attached to their equipment, already have a sufficient infrastructure in place that can be utilized to provide the basic framework of a production monitoring system. Utilizing knowledge of production progress, bottlenecks and constraints, asset performance, and workflow patterns, TrakSYS™ dynamically maps process capabilities. Specific intelligence concerning actual capabilities for each product (SKU) by asset, resource, and date ranges is used to significantly improve the accuracy and effectiveness of production planning and scheduling and to reduce work in process (WIP). Consider for example, a vitamin packaging line consisting of a tablet filler, followed by a capper/sealer system, labeler, case packer, shrink wrapper, palletizer, and stretch wrapper. Under automatic control of the PLC program, tablet bottles are passed under the filler heads and then filled, plastic seals and caps are then put on in the capper/sealer, labels are applied to the bottles, and then they are processed through the rest of the packaging line. At any given moment in time, the PLC software is responsible for evaluating the conditions of this sub- process and deciding what to do next. Let us imagine that during a normal running shift, the capper runs out of caps. A beacon is activated, an alarm sounds, and an operator is alerted to refill the cap bin and restart the process. This operation takes one or two minutes at the most. Does the equipment operator record a downtime incident on his clipboard? Probably not. Even if the operator considered the downtime significant (unlikely because of the short duration), he probably sees nothing significant in the event—it is a part of the job he does several times a day. In any case, documenting that the capper had run out of caps and stopped the line—is something the operator may not be too keen on admitting! Because the instrumentation understands the bottling process, it is possible for this information to be communicated to another automated system and recorded without interfering in the process itself. Indeed, there are many other signals available to report additional downtime reasons, currently reported to the operator via message displays, stack lights, and other indicators. However, this data is typically not preserved once the line restarts. TrakSYS™ can be configured to allow production personnel to manage production events and tasks, be alerted to area-specific and relevant events, catalog root causes of problems, record observations, and view real-time and historical reports. TrakSYS™ does this by directly interfacing in real time to the various manufacturing operations, systems, and applications, and also engages the human resources that are part of the overall execution workflow. By managing the multi- source data acquisition, analytics, and business rules, TrakSYS™ delivers a well-focused wealth of personalized, relevant, and timely manufacturing intelligence (MI) that is critical for effective decision making. MI is delivered via the TrakSYS™ web-based knowledge portal—for real-time use—to the office, remote, and mobile clients. Effectively Improve Operational Efficiency Page 7 All print and electronic rights are the property of Parsec Automation Corp. © 2014 Web-Based Visualization Today, the preferred delivery mechanism for information is invariably by means of an organization’s Intranet or the Internet. Requiring no special client software to be installed, the browser is an ideal visualization tool for reporting this information. As seen in the following illustrations, TrakSYS™ offers graphical and tabular information can easily be delivered and accessed by those requiring it. The report in Figure 1 details a live web page in TrakSYS™ showing the calculated real-time KPIs and runtime information of a production line; this is an ideal method for supervisors and managers to get the big picture at a glance, related to how well the line is running. In this scenario, the dashboard shows a productivity snapshot: The table represents the current OEE, Cycle Time, and other KPIs for the current shift; the pie chart breaks down the overall time for the shift by runtime and downtime codes used by the factory; the Pareto chart displays the top five downtimes by fault code experienced during the shift. The machine graphics at the bottom of the dashboard provide quick links to more detailed reporting for the Figure 1- TrakSYS™ Produces Real-Time OEE Trends Enabling Managers to Effect Change When it Matters: Now Effectively Improve Operational Efficiency Page 8 All print and electronic rights are the property of Parsec Automation Corp. © 2014 shift or other user-defined production period. This information can help you determine if you are going to meet your production targets for the current production run, shift, or day. Overall Equipment Effectiveness (OEE) has emerged as the premier metric for measuring factory productivity, and as with all critical production data, flexibility in the overall reporting system is important. The previous dashboard report illustrated a single shift within a complete week of production. It is necessary for analysis purposes to be able to rapidly generate reports for other time periods—by production run, by day of the week, and other group data, such as by SKU—so that important trends and conditions may be observed by the process improvement team. The report in Figure 2 identifies different downtime causes for a line on a system-by-system basis, showing both the number of downtime events and the total number of lost production minutes. This report will typically be monitored for the current shift so that emerging problems can be addressed before significant productive capacity is lost. Different reports are needed for different audiences. The TrakSYS™-produced report in Figure 3 shows over 76 downtimes, and each averaging approximately three minutes. Over a week, this would average Figure 2- Historical Information via TrakSYS™ Helps Managers to Quantify Lost Time by System Effectively Improve Operational Efficiency Page 9 All print and electronic rights are the property of Parsec Automation Corp. © 2014 out to over 500 downtimes and 1,800 minutes—or 30 hours of production time lost on this line. At any cost, this would be an unacceptable level of downtime were it perceived as such by a plant manager. Typically, however, this production loss is merely factored into a plant efficiency calculation, reducing the overall efficiency by some unknown fraction. How can more detailed information be used to best target areas for improvement? Again, flexibility in the overall reporting system is important. Figure 3- Detailed Information Provided by TrakSYS™ Helps Managers Perform Root-Cause Analysis Effectively Improve Operational Efficiency Page 10 All print and electronic rights are the property of Parsec Automation Corp. © 2014 Figure 4- Downtime Reason Selection This report also gives an indication that there are times when it is important to involve the operators in the data collection process. When there is not enough detail available from the automated systems relating to the cause of a downtime, it is useful for the operator to be able to rapidly classify (from a predefined list of reasons) and annotate particular incidents for later analysis. In Figure 4, the equipment operator has been prompted by TrakSYS™ to acknowledge a downtime event (Label Jam) by selecting an associated reason code from a pre-configured list. There is also a Notes field designated for the operator to enter additional comments or an explanation for the specific incident. The key issue to bear in mind is that operators are not downtime trackers, and they should be interrupted as infrequently and for as short a time as possible. Whenever possible, equipment operators should not be required to interact with a production monitoring system at all. When interaction is absolutely required, a simple acknowledgement of a downtime event should be made from a predefined list of reasons as to why the downtime event occurred. Effectively Improve Operational Efficiency Page 11 All print and electronic rights are the property of Parsec Automation Corp. © 2014 Consider a bottle filling line. We can identify from the instrumentation when the labeler is out of labels, and the line has therefore paused. The operator should simply reload a new roll and restart. We would always want to record both the fact that this event happened and its total duration, but there is no need to ask the operator for any information since we understand the downtime issue. What if the labeler was out of labels for 10 minutes, and the line was paused for that entire length of time? In this case, we would want to ask the operator for an explanation since the normal procedure of loading a new roll should be completed in a shorter amount of time. But how can we be sure which downtimes are real and which are simply consequential upstream or downstream events resulting from material starvation or product jams? Usually, this comes down to the thoughtful implementation of the tracking system and the presentation of the resulting acquired data in a well laid out report. Figure 5 shows all downtime events for a labeling system within a user-defined time frame. Presented in a Gantt-like format via TrakSYS™, this report clearly illustrates the cause-and-effect relationships between cascading faults on the labeling system, and their effect on other equipment centers both upstream and downstream in the production line. The data acquisition and reporting tools within TrakSYS™ allow all downtime conditions to be identified, tracked, and resolved to the root cause. Once accurate downtime data is captured, it is necessary that engineering and management personnel are able to utilize this information in real time to monitor key production indicators so that timely action can be taken to ensure optimum line efficiency. Figure 5- Downtime Gantt Chart Compiled by TrakSYS™ Effectively Improve Operational Efficiency Page 12 All print and electronic rights are the property of Parsec Automation Corp. © 2014 Figure 6 details a live web page produced by TrakSYS™ showing the calculated efficiency of a production line; this is an ideal method for supervisors and managers to get the big picture at a glance, in relation to how well the line is running. In this scenario, you can see the OEE, each of its components, and the production summaries. Figure 6- TrakSYS™ Web Reporting Portal Allows Managers to Quickly Review Production Statistics Effectively Improve Operational Efficiency Page 13 All print and electronic rights are the property of Parsec Automation Corp. © 2014 A TrakSYS™-generated Mean Time Between Failures (MTBF) report is shown in Figure 7; this is a critical report used to gauge the effectiveness of preventative maintenance programs as well as operator training, related to solving problems on the line. Figure 7- TrakSYS™ MTBF by Machine Effectively Improve Operational Efficiency Page 14 All print and electronic rights are the property of Parsec Automation Corp. © 2014 Figure 8 shows the trend of actual line speed versus target speed, and compares this with the operating time for the line. TrakSYS™ can quickly present this comparison in a single report or dashboard, which is invaluable in terms of reducing rate loss and optimizing line speeds. As demonstrated, timely and non-disruptive involvement of the operators is a critical factor in the successful execution of continuous improvement programs and Lean initiatives. TrakSYS™ accomplishes this offering configurable visualization and interactive dashboards for key production area operators and alerts them to recent and ongoing production events such as stoppages, quality problems, and slowdowns. These events can be selectively viewed, categorized, annotated, and acknowledged by operators. TrakSYS™ also informs operators of KPIs and other relevant production information in real time, which may also be used to manage quality tasks, SPC measurements, and maintenance activities. Summary Real-time data collection tools, coupled with web-based distribution of critical food and beverage manufacturing information related to downtimes and efficiencies, are allowing users of these tools to focus the manufacturing team on improving overall efficiency. Providing accurate data which will cost-justify targeted improvements in the existing lines without burdening the operator will be key to: ▪ Minimizing process variability. ▪ Maximizing asset utilization and productive capacity. ▪ Verifying maintenance intervals (tie into CMMS- Computerized Maintenance Management Systems). ▪ Justifying equipment upgrades with hard data. Figure 8- TrakSYS™ Real-Time vs. Operating Time 12/20/2013 12/20/2013 Effectively Improve Operational Efficiency Page 15 All print and electronic rights are the property of Parsec Automation Corp. © 2014 ▪ Establishing your plant as a least cost producer. ▪ Tapping your plant’s hidden extra capacity. Taking steps to automate the tracking of line efficiencies and downtime data will represent the next major step in the evolution of food and beverage plant floor automation. By implementing TrakSYS™, this approach provides the technology for innovative partnering approaches with equipment and consumables vendors that can result in higher line output rates. TrakSYS™ also provides the accurate, real-time data that can be used on a continuous basis as part of a TPM program to make and maintain, major advances in overall equipment effectiveness. Effectively Improve Operational Efficiency Page 16 All print and electronic rights are the property of Parsec Automation Corp. © 2014 ABOUT PARSEC Parsec Automation Corp. (Parsec) is the developer of TrakSYS™, the leading real-time operations and performance management software. Manufacturing companies worldwide rely on Parsec for flexible and configurable tools to execute manufacturing operations across the value stream more effectively. Without production disruption, TrakSYS™ helps manufacturers to significantly improve asset utilization and efficiency, increase capacity with no new capital equipment, reduce production costs, decrease lead time, and improve profitability. With measurable ROI, TrakSYS™ delivers the bottom-line results that manufacturing companies are looking for. For more information about Parsec, please visit the corporate web site at www.parsec-corp.com. TrakSYS™ is a flexible, scalable, and powerful software application that is specifically designed to improve the management and execution of manufacturing operations. TrakSYS™ is designed to measure, control, and improve process capability and performance throughout the value stream regardless of infrastructure. TrakSYS™ makes it possible to define KPIs specific to each area of operations for meaningful insight into constraints and their root causes. This makes performance an enterprise initiative instead of an isolated endeavor. By prioritizing bottlenecks by impact, TrakSYS™ helps to streamline continuous improvement efforts to get the best ROI in the shortest time possible, and TrakSYS™ makes it possible to reduce the lead time throughout the value stream. TrakSYS™ is Designed to Effectively Help Manage Manufacturing Operations and Their Performance in Real Time Effectively Improve Operational Efficiency Page 17 All print and electronic rights are the property of Parsec Automation Corp. © 2014 TERMS AND CONDITIONS OF USE Upon receipt of this electronic publication, it is understood that the user will and must fully comply with the terms and conditions of use as stipulated herein. This publication is protected by United States copyright laws and international treaties. Unless otherwise noted, the entire contents of this publication are copyrighted by Parsec Automation Corp., and may not be reproduced, stored in another retrieval system, posted on any website, or transmitted in any form or by any means without prior written consent of Parsec Automation Corp. Unauthorized reproduction or distribution of this publication, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent necessary to protect the rights of Parsec Automation Corp. The trademarks and registered trademarks of the corporations mentioned in this publication are the property of their respective holders. All information contained in this report is current as of publication date. Information contained in this publication has been obtained from sources Parsec Automation Corp. believes to be reliable, but is not warranted by the publisher. Opinions in this publication reflect judgment at the time of publication and are subject to change without notice. THIS DOCUMENT IS FOR ELECTRONIC DELIVERY ONLY The following are prohibited:  Transmittal via the Internet  Reproduction for sale  Posting on any web site © 2014 Parsec Automation Corp. All rights reserved. TrakSYS™, LOGICTrak™, MODELTrak™, INTELLITrak™, GLOBALTrak™, EVENTTrak™, ALERTTrak™, SENSORTrak™, LEANTrak™, PRODUCTTrak™, WEBTrak™, HISTORITrak™, AUDITTrak™, IMPROVETrak™, SPCTrak™, BATCHTrak™, and any other Parsec products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Parsec Automation Corp. All other products and service names mentioned are the trademarks of their respective companies. Data contained in this document serve informational purposes only.