Shaping The Future Of CPG Manufacturing | Rockwell Automation

Asian consumers are set to double their spending on food by 2030, creating a US$8tn market and delivering the world’s largest Food & Beverage (F&B) market, according to a joint report by PwC, Temasek and Rabobank. This presents an enormous opportunity for food processors and Consumer-Packaged Goods (CPG) companies, which will in turn drive increased investment in capital equipment. Food manufacturers are of course faced with the challenge of doing more with less, compounded by workforce shortages and skills gaps. To thrive in this promising environment, embracing technology innovation becomes a necessity.

Adopting smart manufacturing is important for the future of the F&B industry, as well as for CPG manufacturers more broadly, to ensure products will be available and delivered as ordered, on time and meet quality standards.

Heavy automation robot arm machine in smart factory industrial, Industry 4.0 concept image.

THE CURRENT LANDSCAPE OF CPG MANUFACTURING

The CPG sector in South East Asia is undergoing significant changes, with the consumer goods market expected to be poised to contribute about $322.70bn in sales in 2024.

CPG manufacturers, however, often grapple with persistent challenges in aligning with the expanding market. Adapting to the dynamic environment remains a hurdle, requiring strategic adjustments to meet evolving consumer demands and market trends.

A significant issue is the reliance on manual inventory tracking using different software and spreadsheets. This outdated method is time-consuming and prone to errors, reducing operational efficiency. The unpredictable nature of customer demand adds to the challenge. Having too much stock can lead to unsellable, outdated inventory, while having too little can prevent companies from fulfilling customer orders, damaging their reputation and trust.

Additionally, many companies have limited insight into customer demand and how well it is being met, a problem in a competitive market. A related challenge is the lack of awareness about new competitive products, making it hard to position products strategically.

To overcome these challenges, adopting smart manufacturing is essential for the future of F&B manufacturing and the CPG sector. Smart manufacturing ensures products are available, delivered on time, and meet quality standards.

Furthermore, companies using new manufacturing technologies, like Manufacturing Execution System (MES) solutions and Quality Management Systems (QMS), must make sure these tools work well with shop floor devices (automation) and back-end systems (like inventory, order, and master data environment). This integration is key to creating an efficient manufacturing environment that can adapt to the changing demands of the consumer market. By tackling these challenges and using advanced technologies, CPG manufacturers can position themselves for continued growth and success in a competitive and consumer-focused market.

Moreover, embracing data analytics and artificial intelligence can enhance predictive capabilities, allowing CPG manufacturers to anticipate consumer trends and optimize inventory levels. Implementing a robust demand forecasting system enables companies to align production with market demands, reducing overstock or stockouts.

Cakes on automated round conveyor machine in bakery food factory, production line. Generative Ai

FOUR KEY STEPS TO MODERNIZE F&B MANUFACTURING TECHNOLOGIES

There are four key steps for the F&B manufacturing sector to embrace smart technology. These include assessing processes, choosing the right solutions, successful adoption, and continuous improvement. Embracing data-driven innovation is essential for industry competitiveness, agility, and resilience.

1. Assess the current manufacturing process and build a case for changes: Identify and quantify the value.

Companies should start by evaluating existing Information Technology (IT) and Operational Technology (OT) solutions, identifying improvement opportunities, and quantifying potential benefits. Create measurable KPIs to gauge success, emphasizing key metrics like inventory accuracy, quality, efficiency, Overall Equipment Effectiveness (OEE), and on-time performance. Engage stakeholders from various departments to enhance buy-in.

2. Identify the best solution for your business.

Interconnectivity via cloud and IIoT facilitates MES, QMS, and automation deployment is crucial for a comprehensive shop floor view. These systems differ in strengths and weaknesses, and so prioritize evaluations based on identified opportunities. Ensure they offer automated KPI reporting and dashboards. Evaluate technology stack, security, scalability, and implementation support. Assess integration needs with ERP systems, shop floor automation, and third-party solutions.

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.

This 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 crucial to have ownership at the top of the organization and key champions in each area of the business to drive towards success. One can and should have outside consulting support, but there is no substitute for the people who run the business day in and day out and know the business 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 F&B 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.

In summary, the evolving CPG sector in South East Asia, driven by the projected doubling of food spending by Asian consumers, underscores the imperative for innovation. CPG companies, particularly in the F&B manufacturing industry, must adopt smart manufacturing technologies to address workforce shortages and outdated inventory tracking. The future of CPG lies in leveraging data-driven innovation for enhanced competitiveness, agility, and resilience in the ever-changing consumer landscape of South East Asia.

Originally published in Food & Beverage Asia

Published February 20, 2024

Marcelo Tarkieltaub

Regional Director, Southeast Asia, Rockwell Automation

Based in Singapore, Tarkieltaub is responsible for sales and business operations across Singapore, Malaysia, Indonesia, Philippines, Thailand, Pakistan and Vietnam. Prior to Southeast Asia, Marcelo was Regional Director, Southern Cone, a portfolio within the Latin America region covering the markets of Argentina, Chile, Peru, Paraguay, Uruguay and Bolivia. He has over 20 years of experience at Rockwell Automation and possesses deep knowledge of driving high performance teamwork in multicultural environments. Marcelo holds an MBA from Fundação Getulio Vargas and Bachelor of Science, Electrical Engineering from Universidade de São Paulo. Marcelo is fluent in English, Spanish, Portuguese.