The combination of increasing costs in raw materials, changing customer requirements and the need to satisfy an ever more demanding consumer is creating a perfect storm in the UK food and drink industry, putting pressure on manufacturers to deliver shorter innovation cycles and customisation at speed.
Meanwhile, the industry itself is also evolving rapidly as robotics and automation fill gaps in the labour force or help to free up workers from routine jobs to focus on other areas of a business.
So how can manufacturers balance all of these challenges, yet continue to remain competitive and retain healthy margins, as well as meet the different sustainability and eco-friendly targets placed upon them by government or through consumer pressure?
Siemens UK & Ireland (UK&I) argues that manufacturers do not need major capital investment to keep ahead of the game. Instead, it says, the way forward for many companies is to seek outcome-based solutions to boost productivity, as digital technology can equip the supply chain with all the detail and information it needs to improve.
Rather than manufacturers having to invest major sums in new machinery, Siemens advises a focus on ‘continuous improvement’ in a manufacturing facility, identifying where any productivity problems are occurring, then working to resolve them.
The company can offer a full production audit, with analytics, enabling a manufacturer to identify how it can optimise its original equipment and existing infrastructure and take small steps to arrive at an overall goal.
“One of the issues is measuring performance correctly,” says Keith Thornhill, head of food and beverages at Siemens UK&I. “If manufacturers can measure better, they can focus on the improvements needed to achieve greater capacity and make the process flow better, thus gaining greater productivity.
Improving is not all about buying new machinery, he explains. Instead, it’s important for businesses to think culturally about how they are working. Once a better culture is established, they start to make strides.
“Manufacturers need to have a vision, then make small steps to get to that vision, not big expansive gestures. If you are only thinking about next week, you will never get there. It’s about pre-planning and small solutions; those who have that will succeed.”
Siemens says manufacturers need to create flexible, smart factories, but acknowledges that this is more difficult to achieve in a traditional facility that has been working with the same methodology and culture for a long time. Also, smaller and medium-sized businesses simply do not have the capital to make sweeping changes. Yet, in both of these scenarios, the digital specialist can help a manufacturer, by partnering with them to establish how to work the ‘smart’ technology into an existing infrastructure.
Using digitalisation, Siemens is able to highlight sticking points in the production process and help manufacturers maximise operational efficiency, meet their environmental targets and compliance and developing IT solutions to take them forwards.
“Digitalisation is potentially a game-changer,” says Thornhill. “It helps companies to release more, rather than buy more and it’s an operation cost rather than a capital cost.”
So, where’s the catch? Well, the good news is, there isn’t one. Siemens believes in working in partnership with manufacturers and says its service allows them to see relatively rapid return on investment (ROI). It is so confident in the benefits of this digital approach, that it offers ‘Servitisation’, a process where Siemens also collaborates with the manufacturer financially to make that ROI a reality in the fastest time possible and to pre-agreed targets.
“We’ve already proven in the virtual world that our process works,” says Thornhill. However, he admits that there is often some apprehension about new technology in a traditional manufacturing environment.
“Manufacturers should not get too hung up on the terminology, such as the Internet of Things,” he says. These are just buzzwords. What we offer is a process of continuous improvement, using different tools to do your job better.”
Ultimately, in the current and evolving environment, food and drink manufacturers – whatever size they may be – cannot afford to sit still. Given the way and the speed at which retail and consumer demands are changing, it’s a case of having to be nimble and move with the market.
“There’s an element of short-termism in the food and drink manufacturing sector,” says Thornhill. “The retail strength in the UK market has fostered an under-investment culture, due to the brevity of contracts, for example. Also, the retail environment has changed, with huge variations in sizes of outlets from the big out-of-town hypermarkets to the smaller express stores around the corner. That, in itself has required a demand for a huge variation in pack sizes for example, and all those variations have to be managed.”
On top of that, the need for a major increase in flexibility as more customised diets come to the fore and the growing competition of direct, online shopping are forcing food and drink manufacturers to respond and react with rapid formulation changes.
“If you want to be the best, just do it!” says Thornhill. “Don’t be in survival mode, be ahead of the game – and get a good partner to help you through the process.”
To find out more about how Siemens’ digital technology can help transform your manufacturing process, click here.