It is no news that when it comes to the food and beverage industry, automation leads to higher hygiene, cleanliness and safer food. In fact, now robots have also come to the rescue to improve the production, packaging and processing of raw foods like fruits and vegetables, which is often repetitious and labour intensive, especially when it comes to packing them.
However, automation comes with a cost, but simultaneously reduces labour costs. Hence, it is done based on cost benefit analysis. As today’s market demands safer, better foods and with labour costs increasing exponentially, the need for automation in the food and beverage industry is also rising.
Changing demands and staying competitive
Frequently fluctuating demand scenarios affect the consumption pattern of different products in different ways. Accurately forecasting the demand for a larger horizon is a continual challenge that is faced with most products, specifically the ones with smaller shelf-life. Shirish Yadav, Vice President – Manufacturing & Technology, ITC – Foods Division, asserts, “The changes in forecasting due to changing market demand also affect the downstream production and dispatch planning driving up inventory at various stages of the supply chain, affecting manpower productivity at the factory.”
Likewise, there are multiple brands coming into the food & beverage industry, which has made Chitale Group competitive from its price-perspective. Plus, when it comes to general trade business, it is purely about the economy of scale. “One needs to be sure that one’s retailers are happy and they take ownership in selling the brand,” Indraneel Chitale, Partner at Chitale Group, expounds and adds, “Hence, a company has to create a good campaign where people are ‘pulled’ because of the brand to the retailer. Thus, to create a good market pull, one has to have a good set of values or spend good money on marketing to draw customers towards the brand.” Chitale further added that with digitalisation, the company is getting excellent visibility, and using digital media to reach out to its consumers is helping them encourage customers to buy their products.
Automation & digitalisation strategy
Indeed, the automation and digitalisation landscape is one that is rapidly changing, with the advent of new technologies and disruptive ideas that are shaping it. Therefore, while implementing a strategy for automation and digitalisation, one has to make sure that the technology can be compatible with the foreseeable changes in the future and does not become outdated soon.
Yadav explains, “Automation processes tend to be too rigid and hence – especially in a consumer goods industry such as ours, that is fast paced and dynamic – it should be ensured that the technology selection allows for flexibility of products and processes. Above all, the strategy should create a viable long-term business case by increasing the productivity of the manufacturing operations and profitability for the business.”
Automation means that there will be a lot of capital expenses – so, there needs to be a clear strategy about what one expects from that capital expense. One needs to know how to develop and scale the business and whether the market actually exists for a product to be automated and scaled up. If these factors are thought out well, then automation can be implemented very easily.
However, Lele clarifies that the food and beverage industry, first and foremost, should understand the benefits of automation, implying that there is always a cost pressure from the buyers of finished goods. “Hence, smaller players are reluctant to move towards automation,” he divulges and goes on, “Automation becomes feasible beyond a certain critical production capacity, but more than 70 per cent players are below the threshold. What’s more, the smaller players will have to become bigger and deploy automation, or else they will perish.”
Automation trends in the F&B industry
The major automation that is happening in the food & beverage industry today is happening in the supply chain and logistics part of the business because the scale of businesses is growing very fast. Maybe about a decade ago, a lot of investment would take place in automation that went into processing of food. Now, companies want to package this food at a very high scale, carton it & distribute it and manage the whole warehousing concept automatically.
“Concepts like Automated Storage and Retrieval System (ASRS) help automate the warehousing very efficiently,” elucidates Chitale, whose company has been investing in automation for the past 10 years. “For example, one can manage a 100,000 sq ft warehouse in 10-12 people, which would normally require 60-70 people. So, now more brands want to
play in the general trade business, which is a multi-brand environment,” he explains.
The latest automation trends are also moving towards centralisation, like setting up central control rooms for monitoring & controlling the operations. The food and beverage industry deals with large volume of products, and hence, there are different fronts available for automation initiatives. Packaging processes can also be automated to improve the speed of packing and reducing the need of employing a large number of people.
“Other few important areas of automation in the food and beverage industry are process automation and quality testing/inspection,” conveys Yadav and continues, “The integration of all machines into a SCADA or PLC based controllers that can be remotely controlled and monitored will improve manpower productivity and reduce process deviations. This, coupled with the latest trends in Industry 4.0 and IoT, can develop manufacturing systems that have the necessary analytics to self-correct and troubleshoot deviations using Machine Learning (ML) and Artificial Intelligence (AI).”
Digitalisation in the food & beverage industry
When it comes to digitalisation, Chitale Group is putting in a traceability system, where right from the point where the milk is procured to the point the product is sold is mapped on their system. This way, they have the responsibility of ensuring the quality standard across the supply chain and due to digitalisation, they can actually pin-point every breakage point that happens inside the supply chain. The company is even able to monitor its operators’ efficiency with the help of digitalisation and IoT.
“Dairy has always been at the forefront of automation and digitalisation,” Nilesh Lele, President, Association of Food Scientists & Technologists (India) Mumbai Chapter says and continues, “There are many dairies where the milk is untouched by humans; the feed and other things are also automated. In fact, many big players in the industry are using digitalisation for their backward integration and also to monitor their forward linkages. Plus, analytics is playing a major role in predicting buying preferences and patterns of the consumer.”
Role of AI and ML
Machine Learning (ML) and Artificial Intelligence (AI) technologies are also becoming of importance in many ways in the food & beverage industry. Machine data is analysed to predict the health status, component failure in future & similarly, raw material & process characteristics are analysed to predict the final product characteristics. Besides, cloud computing helps in real time analysing & responding back for quick decision making & auto controls and digital twin gives the virtual operations controls for performing hygiene & closed room operations, without human touch.
Indian F&B industry – at par with global automation levels?
As the price of labour continues to be significantly low in India, as compared to much of the developed world, the automation projects and initiatives typically do not make for a viable business case unless it replaces a large number of people involved. Hence, most off-the-shelf solutions that are prominent in the global markets might not be a solution for the Indian food and beverage industry. So, the inevitable question rises – is the Indian food and beverage industry at par with global standards in terms of automation?
“The level of automation in India is still less compared to global standards,” Lele responds and adds, “The overall capacity is also low, because we have a number of smaller units, especially for dairy, bakery, snacks and beverages; more human intervention is seen for cleaning, sorting or even secondary packaging.”
Chitale goes on to inform that there are a few good players in India who are doing an excellent job of automating things and are already at par with global standards, because they have the scale with which they can justify the cost of automation. However, there are many businesses that are very local and not willing to look beyond their boundaries and so, cannot justify their cost. So, while automation becomes an enabler, not all businesses want to take that risk; this understanding of technology and how it affects the bottomline over a longer period of time does not exist within all businesses. This is why automation is not widely adopted in India, especially in the food business.
Will automation replace skill sets?
There is also quite a bit of speculation whether increasing automation will replace people, leading to most to view that it won’t replace people, but the skill sets in them, as people are required to supervise, look after things or just be general observers of what is happening at every location. Lele opines that automation may lead to reduction in labour force, which has to keep getting upgraded and updated to the needs of the businesses around it.
Yadav further informed, “Increasing automation will help in manpower rationalisation by identifying non-productive activities, thereby making informed decisions through means of data and digital interventions and allowing people to upgrade their skill sets for more productive roles.”
But as automation will replace skill sets, we can’t turn a blind eye on skill upgradation itself being a significant issue in the industry. For this, the Food Safety Training and Certification (FOSTAC) has been made mandatory by the FDA for all food & beverage manufacturers in India to have people trained based on the number of people they have in the plant. This is leading to a general increase in skill sets of people, which is naturally translating into better food safety and quality systems. “This has also resulted in a reduction in overall health hazards,” Chitale affirms and adds, “Apart from that, there are measures taken internally by all companies on their own; for instance, we organise weekly sessions, seminars, lectures by food safety experts with our staff, so as to improve overall quality.”
The AFST(I) Mumbai Chapter, too, organises many seminars, exhibitions and trainings for the industry, Lele apprises. “We have jointly organised expos with relevant companies and associations for automation in the food & beverage industry in the past,” he informs.
Understanding the design factor – a challenge
Automation, as it happens, brings countless opportunities for the food & beverage industry, along with its own set of challenges which food manufacturers face today. One of the significant challenges is the compliance with the food safety laws, because quite often, there can be devices that do the job of automating the food process very well, but are not designed from the food safety perspective. These design factors are not something that all automation partners understand very well from the food safety standpoint, because the awareness on food safety is not present in all automating companies, who do multiple avenues.
According to Chitale, it’s simply about investing more time into designing and understanding the laws very well; it’s important to understand what can be a problem with life, biology and chemistry when one is dealing with food, comprehending the side-effects and making sure that one inculcates those factors in the design when trying to automate anything, in turn making sure that those factors won’t fail. So, one has to look into the wash down mechanisms these machines need to have, quality of drainage systems, the kind of systems being utilised and so on.
Automation and robotics in the food and beverage industry in India is not being widely applied yet, but is heading in that direction, especially as the sector transforms in terms of demand and becoming a multi-brand market. Companies in the industry need to make a defined approach suitable for them in order to implement the right automation and digitalisation strategy. At the same time, it’s pivotal for them to be well aware of the challenges that stand in the way, so as to overcome them and rise to the global standards.
Moreover, while it has become quite clear that automation will certainly not replace humans, it also remains true that initiatives are being taken within the industry to enhance skill sets of the people, in turn, leading to building up the sector and bettering it furthermore.