Smart manufacturing, sustainability, workforce challenges — these topics are top-of-mind across the food and beverage industry. Here, Richard Tester, CEO and co-founder of connected workforce solution Redzone, discusses how all of these issues are interrelated and what food and beverage manufacturers can do to prepare for the future.
Richard has nearly 20 years in the industry, and his experience with thousands of manufacturing facilities across a wide range of industries, mainly CPG with customers such as Nestle Purina and Tyson, gives him a deep understanding of the manufacturing realm as well as the technological trends that generate success within small and large companies.
Where do you see the biggest opportunities for food and beverage companies to increase the sustainability of their manufacturing operations?
RT: To increase sustainability and ESG efforts in manufacturing operations, the biggest solution comes in the form of technological advancements and modern manufacturing processes. Through smart manufacturing tools, processes and supplies are streamlined, increasing efficiency while decreasing overall environmental impact.
Why do you think only 24% of manufacturing companies have implemented smart manufacturing tech? Where do you predict this number will be 5 years from now?
RT: It’s hard to deny that manufacturing is often stuck in the past and can be perceived as a dated industry. Technological integration has been slow to reach its full potential, limiting manufacturing’s reach towards Gen-Z. Combined with the effects of the pandemic, manufacturing has seen a major increase in retirement rates of baby boomers, with 3.2 million more retiring in Q3 2020 compared to 2019.
As an industry, we are working to train our employees on modern manufacturing tools that will further productivity rates and create an environment where generational diversity is welcomed, encouraged, and attracts the young workforce.
In five years, the vast majority will implement smart manufacturing if they have a desire to remain competitive. The events of the last few years — the pandemic, the changing labor markets, the changing economy with soaring inflation — have been a wakeup call to many. Food manufactures have to really start re-thinking how they run their operations and arm their people, especially those on the frontlines, if they are going to be competitive in the future. Food manufacturers have to create a better employee experience, especially for their frontline teams, if they are to attract and retain the people they need on the plant floor to make their products, and they have to become more productive to maintain margins in an environment where input costs are increasing fast.
Labor productivity has largely remained flat the last 10 years. There is an enormous opportunity to change that by arming those on the frontline with smart technologies to improve their decision making and improve their daily lives to tap into that opportunity. Finally, agility has to become a core competence so they can adapt and react to the changing environment. Smart manufacturing is an essential building block for that and the winners in the new economy will be those that are already investing in this area.
How can implementing smart manufacturing contribute to F&B companies’ sustainability efforts?
RT: We have seen firsthand from our customers’ smart manufacturing efforts that their factory has seen an increase in overall productivity and efficiency. With this, plants are able to manufacture five days of product in only four days, reducing their carbon footprint by 20%. Smart manufacturing also limits the amount of paper products in factories, saving 5-15 trees a year per factory, and, due to increased efficiency, product yield loss is reduced, thus eliminating excess manufacturing waste in landfills.
What are the other ESG benefits of smart manufacturing?
RT: Smart manufacturing is designed to bring dignity back to frontline workers; the success of a plant starts with empowered employees. Modern technology allows shop floor workers to be the first line of defense, giving them access to real-time manufacturing data and the power to come up with solutions as needed. Ultimately, this creates company pride among employees, offers career development, builds loyalty, and strengthens these small, local communities where manufacturing plants are often the biggest employers.
What’s your top piece of advice for F&B companies that want to implement smart manufacturing? What should be their first step?
RT: In order to implement smart manufacturing, it is crucial to have employees on board who will be able to utilize the technology and augment the technology around the plant, rather than hiring frontline workers to support technology. As previously mentioned, the success comes from our employees.
As a first step, it is important to change the way manufacturers onboard new employees to onboard in a respectful manner, sharing company values, giving them a mentor, the ability to communicate, and access to higher management. In the long run, this will increase retention rates past the 90-day probation period and build a strong foundation for success.
With a broad array of smart manufacturing technologies, where should food manufacturers start?
RT: There is a very good reason to focus on technologies that arm the many on the frontline vs. the few in management or specialist functions. The greatest leverage point in any food manufacturing plant are those on the frontline, who have the ability to change the performance of the plant (and therefore the operating margins) on any given day. Millions have been invested in technologies to support management decision making, from ERP to IoT to big data, but relatively little has been invested for the deskless workers who are on the frontlines each and every day.
Walk around any food factory and it’s common that the primary technology for the frontlines teams is still pen and paper. From paper-based work instructions to recording quality checks and maintenance requests on paper, in 2022 it feels very backwards that plants are still operating like this, it also feels that way to the frontline workers. In their home lives they are digital natives, having a recognized digital identity on their social networks of choice, but they come to work and have no individual digital identity to communicate and share their ideas. That plays into how they feel about their work, the dignity and meaning they have in their work and whether they are likely to give the job their full efforts or even stick around. It’s an enormous opportunity for true transformation and a great place to start.