With its high proportion of small and medium-sized enterprises, short production runs, variable raw materials and tight margins, the food and beverage sector is hardly the ideal candidate for Industry 4.0’s ultimate aspiration of ‘lights out’ factories humming along without human intervention.
However, driven by intense competition and regulations that demand ever-greater compliance, food companies have their own reasons for embracing the emerging transformation.
“To thrive, businesses need to be offering competitive prices, quality and delivery performance,” says Mathew Simpson, UK sales manager for software supplier CSB.
“This doesn’t come without really efficient data flow to reduce double work and errors, improve planning and stock control and aid decision-making. In the best systems, all business, factory and logistics processes are linked.”
The basket of innovations underpinning Industry 4.0 may seem disparate, but they all have one thing in common – supporting the ability of companies to make better business decisions.
That could mean anything from enabling predictive maintenance, better production scheduling and tighter quality control to smoothing out kinks in the supply chain. And, whatever the priority of individual organisations, the overall impact will be transformative.
So much more than automation
Automation and smart control isn’t new, but what’s happening with Industry 4.0 is so much more, argues David Parkinson, senior engineering leader with consulting firm, Royal Haskoning.
“Twenty years ago we were collecting data, but it was always about generating retrospective insights,” he says. “Now, we’re talking about how did we do in the last hour and what does that mean for the next hour? We were dreaming of this 10 years ago, but the tools were not there to do it cost-effectively.”
The ability to manage demand is a great example, says Simpson. “Demand planning is critical for all our customers, but meat manufacturers in particular have real challenges because their planning imperative can flip from a ‘push’ to a ‘pull’ overnight,” he says.
In a push situation, they have contracted deliveries of live animals arriving for slaughter and must plan how to use them to fulfil orders – and how to deal with the excess, Simpson explains. In a pull situation, demand exceeds the scheduled input deliveries – so the planners must consider who gets what and also calculate what to buy in, he adds.
Improving delivery performance
“Many CSB customers use the advanced planning module, which automatically suggests a set of production orders, but then allows planners to make manual amendments,” Simpson says. “This reduces the time spent in planning and improves delivery performance.”
Traceability is another key issue for food businesses. “In the food and beverage industry, it’s all about connecting the dots,” says Duncan Moir, senior principal product manager at Epicor Software.
“Traceability is high on the agenda as it is vital for operational efficiency and consumer safety. Also, food and beverage firms face the ongoing pressures of cost control, regulatory compliance, and an increasing consumerisation of how demand is met. Industry 4.0 is presenting new solutions to these pressures.”
For example, UK savoury snacks manufacturer Calbee uses Epicor’s Tropos enterprise resource planning (ERP) system to provide traceability, stock control, purchasing and finance.
“Tropos enables recipe-based production, provides a great degree of materials traceability and helps ensure regulatory compliance,” says Moir. “It has been designed to be flexible to cater for the variability in raw material supply and ambient conditions, and takes account of allowable tolerances while tracking production yields.”
More than ‘big boys’ toys’
Crucially, Industry 4.0 is not just about ‘big boys’ toys’. Even small firms should already be thinking about which of the pick ‘n’ mix of recent and emerging technologies could help them, advises Simpson.
“There are a bewildering array of technologies for the creation of smart food factories – ERP systems, control room systems, predictive planning, web apps, industrial image processing and automation solutions,” he says.
“At CSB, we recommend learning to master the new complexity step by step while concentrating on best practice. Start with something simple like paperless picking. Start now, or the start-ups will overtake you!”
Industry 4.0 extends beyond individual organisations and into supply chains. So, it demands systems that can integrate effectively between different players along the way.
“There is mounting pressure for organisations, big and small, to respond to Industry 4.0 and work towards digitising their supply chains,” says Sebastien Sliski, general manager for supply chain solutions at Zetes.
“However, to be successful, they must create an integrated information layer that is fed by core systems, enabling collaboration between internal and external departments, ensuring that all stakeholders can access the right information, at the right time, from anywhere in the supply chain.”
Enabling greater collaboration
Marks & Spencer (M&S) chose Zetes’ supply chain visibility platform, ZetesOlympus, to enable greater collaboration between itself and suppliers. It is part of a wider project with Zetes to transform visibility and fulfilment across the retailer’s fresh food supply chain.
“ZetesOlympus provides real-time operational visibility of supply chain events and inventory flows, which will help M&S take immediate action to secure the continuity of supply across its food operations,” says Sliski. “The supply chain intelligence is accessible on any device (PC, tablet, smartphone), keeping all relevant parties connected at all times.”
Parkinson at Royal Haskoning says visibility is key to eliminating many of the inefficiencies in traditional supply chains, where everyone – suppliers, manufacturers and retailers – is constantly trying to predict how much they need to hold in stock to meet demand from the next link in the chain.
“In a discontinuous supply chain, you have different levels of aggregation, so you get waves of demand appearing,” he says. “That’s quite disruptive, because when you start making something to meet expected demand, you often have to stop making something else.
“With Industry 4.0 increasing visibility in the supply chain, you can base your predictions on what’s happening in stores. After all, you’re aiming to keep stock on the retail shelf, not in the distribution centre.”
The impact of autonomous tools
Looking further ahead, the use of increasingly autonomous tools, such as artificial intelligence, will have a big impact on jobs and society, as well as businesses. Finding answers to these challenges will be well above the pay grade of individual firms, but fans of Industry 4.0 note the benefits will also extend far beyond generating profits for industry.
“With food, Industry 4.0 is about making the right decision at the right time, so it doesn’t get produced without getting delivered and it doesn’t spoil,” says Kris Kosmala, Asia-Pacific general manager for software firm Quintiq.
“On one hand, it’s all about making money, but there is a much bigger obligation, because misaligning end-to-end supply chains wastes a lot of food. In India, for example, misalignment of capacity between producers and processors results in 30% of food being wasted.”
Above all, the driving force behind Industry 4.0 is to use all the technologies possible to fulfil the demands of the market, Kosmala argues. Achieving this can help reduce food waste – critical in benefiting not just producers, but the population at large.