At the time of writing, pandemic-induced safety measures have been a part of our daily lives for over eight months now. Businesses are seeing purchase patterns disrupted as a result: e-commerce orders have skyrocketed, stockpiling of frozen or canned foods has increased by at least 17%, while significantly more consumers look to a company’s crisis response as their trustworthiness.
Among the industries that were affected, no one saw more impact than the food industry. From fields to restaurants, the entire food supply chain searches for ways to maintain production while facilitating safe physical distance among their workers. However, the future can be hopeful, according to a survey done by McKinsey & Company. The study shows that companies of all sectors that embrace a proactive technology strategy report more than 50% revenue growth when compared to companies whose corporate strategy was not technology-driven. Similarly, Canadian food and beverage manufacturers also witness the extent of technology’s differentiating role in this crisis:
“The companies that survive and thrive now and, in the future, will understand the importance of agility, flexibility, and adapting to changing times, including expanding digital platforms and investing in technological advancements to meet changing consumer preferences (source).”
Industry Supply Chain Upended
The food industry’s supply chain has been upended by changing buying patterns and large-scale business closures since early 2020. Many producers of multi-serving foods for restaurants and hotels face order cancellations as much as 27%, resulting in excessive perishable inventory. On the other hand, packaged food companies saw a 29.3% jump in sales revenue as they faced unprecedented challenges to keep up with the surging demand from consumers who stopped dining out. Both channels face the dilemma of their equipment not being flexible enough to adapt to the market change quickly.
Even before 2020, food manufacturers faced challenges to fill their workforce due to various socioeconomic factors. Additionally, the North American labour market is seeing Baby Boomers heading to retirement en masse, denting the overall supply for skilled labour. These Baby Boomers are also knowledgeable and experienced employees whose qualifications are hard to replace in the short term. Fewer millennials and Generation Z’s also opt for a manufacturing career, further exacerbating the shortage.
Stricter Workplace Safety Measures
As the lockdown measures unfold, the demand for food security amplified the problem for food manufacturers who were already struggling with fewer workers. In June, with employees working in close proximity and plants functioning at peak capacity, 18 processing plants in the US were temporarily shut down due to outbreaks. The closure brought disruptions to the country’s meat supply chain. Other plants are struggling to implement physical-distancing precautions compliant with the new safety rules. Not only does an upsurge of cases cause consumers to lose trust in a brand, but the lives it potentially can affect is also beyond anyone’s understanding, even at this point. There is an urgent need to establish safer workplace standards that will simultaneously meet the uncertainty in food demand.
Why Now is the Time to Move Forward with Industry 4.0
Industry 4.0 is the latest industrial revolution, where manufacturers are optimizing automation with enhanced data and machine learning. A network of Industrial Internet of Things (IIoT) with real-time monitoring is the digital transformation (DX) strategy in achieving a sustainable future. Before the pandemic, manufacturing companies each moved at a different pace with their DX objectives. Food processing plants across North America projected only a 7% increase in capital expenditure for 2020.
However, as quarantine restrictions continue to hinder plant operations, they also removed companies’ barriers to implementing technological improvements. One of the most significant digital transformations was the increased use of advanced technologies in operations, forcing companies to shorten the execution period from 21 months to 25 days. Though manufacturers are adopting these technological changes based on necessity now, they will remain in place in the long run. Those who respond rather than react to the crisis with technology upgrades will help them navigate through the storm.
Labour Shortage and Better Throughput
Based on the Industry 4.0 paradigm, a manufacturing plant can delegate ergonomically difficult and harmful tasks to machines or robots equipped with advanced 3D vision systems. Transferring valuable human resources out of repetitive and menial labour work, such as loading/unloading (palletizing), dimension monitoring, or packaging products, can free up more than 30% of the workers’ overall time. Vision-enabled automation processes make precise and timely decisions based on networked, digitized data, unattainable with manual labour. With consumers’ rising demand for food quality, automation with machine vision can help food manufacturers increase production throughput.
Being an early adopter of technological strategies is a competitive advantage, especially in times of crisis. One of the most prominent American meat processors pioneered by deploying vision-enabled sawing systems well before physical distancing was required by OSHA. By limiting human contact with food, the risk of human contamination is minimized. The automation system also dramatically reduced workplace injuries. Furthermore, these plants can easily keep their employees six feet away from each other. Not to be overlooked is that food-processing machines with the highest IP ratings can be sanitized thoroughly, ensuring consumers’ and employees’ well-being and the company’s reputation.
As seen previously, one of the critical strategies in moving forward with automation is the integration of machine vision technologies. Plants that utilize machine vision can reduce floor-wide face-to-face interactions as their engineers work remotely to monitor the processes using real-time, digital data. Mechanics can also provide timely service instructions using the plant or equipment’s digital twins, minimizing the production downtime.
Bonus Benefit: Agility
According to a study performed by McKinsey & Company, before 2020, 40% of the companies surveyed acknowledged that the primary reason for revenue loss was due to lagged digital adoption. As the year draws to an end, it is evident that having a future-proof digital strategy in place sets companies apart from their competitors during a crisis. Industry 4.0 proves to provide manufacturers with technological agility. It builds on digital factory data that allows quick responses to shifting customer demands or even new safety compliances such as physical distancing. The time to leverage IIoT and incorporate an Industry 4.0 strategy is now.
What can your organization do to formulate a future-ready DX strategy? This article offers a framework on where to start: reflecting on what the organization has done right and what can be improved. It then asks five thought-provoking questions, guiding readers to assess their organizations’ digital readiness.If your organization is thinking about automating but unsure where to start, give us a call or contact us. If you are curious about how machine vision can be the key to unlocking automation, you can read more about it here.