The food and beverage industry has been facing unprecedented change over the past several years due to shifting consumer demands driven by increased pressure from large-scale competitors and direct-to-consumer trends. In fact, 88% of meals and snacks are being consumed in the home – up from 75% before the pandemic.
This change is having a lasting impact on food processors and CPG companies, driving increased investment in capital equipment to meet this rising demand. The industry expects to reach $62 billion in the global packaging machinery market by 2030, a 32.7% increase from the estimated market in 2022. The industry is at a pivotal point where data is key to unlocking growth and reinforcing competitive advantage. Additionally, integrating digital solutions is crucial to up-level manufacturing technology to connect all areas of the supply chain to ensure compliance and optimize resources and productivity to meet new and existing challenges.
The Changing Landscape of Food & Beverage Manufacturing
In addition to shifting consumer demands and supply chain volatility, workforce shortages and skills gaps are forcing manufacturers to do more with less. Changing consumer demands and preferences are causing manufacturers to work with more SKUs and manage more production information than ever. Along with this, new and evolving regulations, such as the Food Safety Modernization Act, demand companies collect, organize and report more detailed, granular information at each step of the process than ever before.
To make matters more complicated, disparate systems can create significant challenges such as poor forecasting and lack of supplier visibility. This lack of visibility and fragmented systems can also exacerbate the shifting consumer demands and workforce challenges impacting the changing landscape, which ultimately can cause customer delays, wasted resources, poor quality, increased costs, non-compliance of food safety guidelines and inability to scale the business.
Adopting smart manufacturing is important for the future of the food and beverage manufacturing industry, as well as for consumer packaged goods (CPG) manufacturers more broadly to ensure products will be available and delivered as ordered, on time and meet quality standards. Additionally, companies that deploy smart manufacturing technology, like manufacturing execution system (MES) solutions and quality management systems (QMS), need to ensure these tools integrate with shop floor devices (automation) and with back-end systems (inventory, order and master data).
Four Key Steps to Freshening Up Your Food & Beverage Manufacturing Technologies
There are four critical steps to consider when overhauling stale food and beverage manufacturing technologies:
1. Assess the current manufacturing process and build a case for change: Identify and quantify the value
Organizations should first take stock of their current IT and OT solutions. It’s important to identify the key opportunities for improvement and quantify the value and positive outcomes upgraded systems and processes can deliver. Establish metrics and specific KPIs that will be used to define success and measure the return on investment. Underscore the benefit to the business on those metrics such as inventory accuracy and inventory turns, quality, yield, labor efficiency, overall equipment effectiveness (OEE) and performance to schedule. Involve stakeholders from multiple impacted departments in the organization to increase buy-in.
2. Identify the best solution for your business
Interconnectivity across enterprise systems and assets, enabled by cloud and IIoT technologies, makes it possible to deploy MES, QMS and automation capabilities to provide a holistic view of shop floor performance, efficiency and quality. However, these systems are not commodities and each has its own unique strengths and weaknesses. It is crucial to drive product evaluation and demonstrations toward the highest value opportunities identified in the previous step, to address the priority pain points and unique needs for your business. Make sure that the system has the capability to provide automated KPI reporting and dashboards for your specific metrics. Aside from product features and key capabilities, it is essential to evaluate the technology stack, security and scalability of each solution, as well as the experience of the implementation support resources in your industry. It is also critical for food and beverage companies to assess any integration needs and capabilities to the back-end ERP system and to shop floor automation and third-party point solutions as needed.
3. Strategize and deploy a successful adoption
After securing internal buy-in and approval, the next step is adoption and deployment of the new smart manufacturing technology. This starts by building out the right deployment team, including customers, stakeholders, executive sponsors, customer project champions, project managers and solution project leadership. Develop a thoughtful deployment strategy to ensure adoption is seamless and efficient. The strategy should include planning for training, designing system configurations and process definitions, data conversion, piloting and testing, preparing for adoption readiness and actually rolling out the technology. It is critical to have ownership at the top of the organization and key champions in each area of the business to drive towards success. You can and should have outside consulting support, but there is no substitute for the folks who run the business day in and day out and know the business the best to make it happen.
4. Performance Monitoring and Continuous Improvement Process
Once the solution is live, it is time to track the effectiveness of the investment and drive a continuous improvement process. The KPIs that were identified in step one (which should be available on dashboards) can be the basis for understanding where the expected benefits have been realized, where there are patterns and trends that point to opportunities, and in general, to drive a process of year over year maximization of the potential and profitability of your business.
The Future of CPG is Smart Manufacturing
Leveraging smart technologies and adopting data-driven approaches to manufacturing is critical for manufacturers in the food and beverage industry. They provide a competitive edge by assuring that products will be available and delivered as ordered and on time, while meeting the highest quality standards, and at a lower cost. Manufacturers that adopt these technologies will find themselves more agile, competitive, resilient and flexible in the face of ongoing market changes.
Anthony is Vice President and head of Product Management for the Application group and is responsible for Plex‘s core customer facing products such as ERP, MES, and QMS. Prior to Plex, Anthony worked in manufacturing, holding a variety of roles across functions such as IT and software development, Logistics, Operations, and General Management. He has a deep passion for manufacturing and Plex’s customers and engaging with them to solve key problems and deliver competitive advantages.
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