Food safety is a major concern for Australasian F&B manufacturers. It often comes in ahead of concerns about labour, automation, plant security, logistics, consolidation, and energy costs. David Rubie, Industry and Distribution Manager, Dematic , puts the spotlight on food safety concerns and other drivers in the F&B industry.
Food safety needs to be in the spotlight for both ethical and financial reasons. Within Australasia, there has been a growing call for tighter legislative requirements regarding the visibility, control and response to tampering and product recalls. More recently, some local food and beverage companies have spent tens of millions of dollars recovering from product safety and security disasters.
Overseas, legislation such as the European Community Regulation 178 on Food Safety, US Bio-Terrorism Act and a host of initiatives in other countries have put an increased focus on accurate and accessible record keeping. In these countries, businesses in the F&B supply chain must be able to identify, down the batch level, from whom they have received products, and to whom their products have been supplied. This "one back, one forward" traceability must be made available to authorities on demand.
Automation, with its integrated logistics, material handling, and warehousing systems can both proactively and reactively address the critical issues of product safety and security. Proactively, automated systems reduce the number of people with direct access to F&B products.
This alone can significantly improve product reliability while reducing the risk of in-process tampering. In order to react with requisite speed and accuracy, integrated supply chains can provide almost instant track the location of suspect products. This key feature of automation can help to facilitate any recalls that may be required right down to the end customer.
But beyond enhancing food safety and security, a fully integrated automation system can provide many compelling business benefits. Today's advanced automation systems increase visibility into F&B manufacturing operations. This improved transparency and traceability of vital business information helps operation managers lower labour costs, improve service levels, reduce scrap and waste, and meet rapidly evolving regulatory requirements.
Six factors driving automation:-
In addition to food safety and security concerns, the food and beverage industry faces at least six additional emerging drivers that further accentuate the importance of implementing automation as soon as possible. Integrated automation can help food and beverage manufacturers address these six emerging trends while providing important safety benefits.
Consumer demands:
Aside from the peace of mind that comes with knowing that their food and beverage products are wholesome and safe, the end consumer continues to demand a broad variety of products and packaging. Demographic trends show an increase in the use of single-serve items and smaller packaging yet paradoxically, trends also indicate a rapid rise in the popularity of warehouse club stores and an increase in demand for larger sizes of packages and multipacks.
Even though market segmentation and product/package proliferation has been a factor for years now, it is still an emerging trend with no end in sight. The impact has become so significant that increased inventory control measures have become a necessity.
In the fiercely competitive F&B industry, manufacturers need to address ever-changing and often conflicting interests in consumer demand as swiftly as possible. Automation provides food and beverage managers a competitive edge that can let them automatically move products and capture data thus reducing the complexity of inventory control and warehouse operations, as well as increase order accuracy in the go-to-market side of the business.
Customer demands:
In an ongoing effort to cut costs and improve agile operations, larger customers (predominantly retailers) are minimising inventory and requesting more frequent and smaller deliveries. Trends overseas indicate that some major retailers are also calling further information automation in the F&B industry through the use of RFID.
This will significantly transform inventory management systems and practices; improving the quality and quantity of information while increasing the speed and accuracy of its delivery. In combination with integrated logistics and handling, RFID technology gives retailers major cost-cutting benefits, as well as real time track-and-trace functionality.
Labour availability:
Warehouse labour and manufacturing workers are not only becoming less available and more expensive, they're also less reliable than automated processes. As Australia’s workforce continues to age and becomes more highly educated, the availability of labour will continue to decline.
Australia is following the trend set in markets such as Japan where labour scarcity is a chronic problem. Traditional decision-making criteria for supply chain networks and solutions are increasingly being challenged by this change.
Land availability:
The price of land especially in major cities continues to increase, with Sydney experiencing an increase of 91% over the last five years and Melbourne 70% over the same period. At the same time, land availability is decreasing.
These trends have increased the importance of warehouse automation technologies that minimise land requirements and can be integrated within existing manufacturing campuses, such as high bay warehouses. These automated solutions will improve supply chain processes, cost and efficiency.
Supply chain management:
Because growth is limited and competition is high, the winners in the food and beverage industry will have a tightly integrated supply chain that lets them know where they can increase efficiencies and cut costs without negatively impacting service, quality or safety.
The data-driven supply chain is becoming completely integrated: horizontally from the raw material source to the end consumer and vertically from the boardroom to the shop floor. To ensure profitability, data must move in concert with materials, at every step in the supply chain and at every operation event.
An integrated, automated system provides F&B manufacturers with complete and constant visibility of product, package, procurement, and process. Unless food and beverage managers make fully-integrated supply chain operations a priority, their companies will undoubtedly fail to thrive in this fast-paced, data-driven environment.
Regulatory requirements:
Along with tightening recall and tampering requirements, a significant driver impacting local businesses is OH&S legislation. Australia’s state OH&S laws have seen considerable toughening up over the last ten years. Local workplaces are now operating under some of the most stringent work safety requirements in the world, with an extensive ‘duty of care’ responsibility carried by the business and employees alike.
Operations with repetitive or heavy lifting and significant human and wheeled equipment interaction have considerable risk exposure to these new requirements. Many businesses are considering adopting automated processes, such as robotics and ergonomic workstations, to improve the working environment and reduce the potential of incurring workers compensation claims.
Market response:-
Within Australasia, the following are the four primary responses to the trends highlighted within the food & beverage industry:
- Supply chains are being consolidated, enabling ‘efficiency leveraging’ through increased volume. The synergising of supply chain operations is a key element in current F&B operational strategy. Consolidation of facilities, supply chain processes and the incorporation of complimentary businesses, providing the volume to drive efficiency, velocity and competitive advantage within the supply chain.
- Visibility across the entire supply chains is being dramatically improved through real time information and data capture. Raw material and batch tracking through to point of delivery information, is being captured and channelled into integrated information systems. This capability enables significant improvements in supply chain responsiveness and overall decision making. Those with this visibility are using it to facilitate customer service level differentiation.
- Increased uptake of automated systems in manufacturing & logistics, particularly those with multiple shift operations. Automated processes and technology is being used to provide consistent cost and service level outcomes, minimising reliance on labour intensive requirements.
- Significant rethink of traditional labour and wheeled equipment solutions, due to tighter OH & S legislation and regulatory commitments. The take up of more ergonomic practices, segmentation of human and machine interaction and elimination of unhealthy processes altogether, all serve to minimise the potential impact of our tougher safety and working regulations.
Conclusion:-
Food safety will always be a major priority: automation is clearly a means of mitigating this concern. The increased focus on product safety and security indicates that the time is right for F&B managers to more fully integrate logistics, material handling, and warehousing automation. And aside from improving safety and global security, automation can help F&B manufacturers to better meet fast-paced and constantly evolving consumer and customer demands, as well as decrease liability issues and workers compensation claims. The integrated automation is a better way to secure success in terms of growth and profitability in the early 21st century.