Engineering and consulting firm Beca spoke with Food and Beverage Industry News about what the new Food and Beverage National Manufacturing Priority road map means for the industry and how it can benefit from the opportunities available.
In October 2020, the Federal Government released their Modern Manufacturing Strategy. Entitled “Make it Happen” the strategy focuses on Food and Beverage as one of 6 priority roadmaps. Their goal? To double the value of Australia’s Food and Beverage manufacturing by 2030 through a focus on smart food and beverage manufacturing; innovative foods and beverages; and food safety, origin, and traceability systems.
It’s an ambitious target, but with a focus on technology to unlock new productivity and business models, the opportunity for industry to transform has arrived.
The Federal Government is backing its plan by offering new rounds of funding for food and beverage manufacturing projects that meet eligibility under its Priority Roadmap.
Beca’s Stephen Witherden and Stewart Coleman spoke about the impacts, challenges and opportunities which will be created by the funding.
Current state – why are we going slowly?
“There is a direct line of funding with three aspects, one is around translating, what they call R&D costs and that’s the non-financial R&D, and the other one is for integrating global supply chains,” said Coleman.
“The other one is getting cost competitive products out there. So by removing things like labour and energy costs by doing things better, people aren’t motivated to spend on these things.
“The mentality of industry is to buy a piece of capital. If we are to change that mentality and get more efficient to get our costs down and compete on the global scale, we need to think more efficiently about how we do that.”
“There are two big impacts I see that this funding is allowing you to do. The first one is to make projects viable that may not have a payback by themselves,” said Coleman.
“As happens on all projects you’ve got a budget, you go out and look at the best of everything, that has all of the analytics and data attached to it and maybe some AI and dashboard.
“But when you come to pay for it you realise your budget is a bit tight, so you take the bells and whistles off, in this case those are things that are going to drive value for you.”
The second impact Coleman sees is the funding allows companies to invest in infrastructure that doesn’t have a direct pay back.
“It takes a fairly mature business to understand the value of investing in infrastructure for future benefits,” said Coleman.
Witherden said the rate at which technology is integrating with long held methods of production meant it was beginning to overtake old ways of looking at the manufacturing process.
One example of how introducing new technologies to a facility can increase its efficiency lies is in the adoption of Wi-Fi systems.
Coleman emphasises the importance of connectivity in the production process and highlighted the lack of integration in the local supply chain, using Wi-Fi capability as a clear example.
“A lot of food and beverage sites don’t have Wi-Fi through their plants so they can’t enable mobile devices out in the field that give people information at the point where they need it to make better decisions.
“Rolling out Wi-Fi might cost you X dollars for a single plant. But once you have that in place, you’re opening up the potential for huge improvements in efficiency and operations.”
And this is where the new rounds of government funding can benefit companies the most.
The new government initiative is also perfectly suited for small and middle-sized companies who are in an ideal position to adapt.
“Mostly because those companies are agile, they’re on the way up and thinking big and about how can they get ahead. They know they have competition ahead of them and it’s easier for them to adapt to new things and this means they can jump across technology gaps,” said Coleman.
“So those that have a true agile mind set have a real opportunity to switch technology easily at relatively low cost, especially with a bit of funding. It can really propel them into the market.”
Micro-brewers are a prime example of one such small enterprise, gaining contracts with larger providers, like Dan Murphy’s, to produce more product than their systems are currently capable of.
“The consumer taste is changing so people don’t want to buy traditional beer brands anymore, they want to buy micro brews and the story that goes with them. So how can you be flexible to produce different kinds of products in a new environment,” said Witherden.
“You need technology for that, you need to embrace a lot of these digital technologies, and data I believe is the life blood of that decision making.”
Coleman said the new approaches have changed what it meant to be an efficient producer.
“It used to be that part of your competitive advantage as a manufacturer was that you knew how to manufacture better than somebody else,” said Coleman.
But now a company can outsource its IP – in this case its brewing techniques and recipes, to another producer who will help with output.
“The IP of the process is gone in a lot of cases to vendors, such as technology vendors who buy processing and packaging equipment,” said Coleman.
“They build that IP into products and sell it back to companies so their competitive advantage is about how well they can run their plants; can they clean, maintain and operate it better than their competitors?”
However, the funding will also have a distinct advantage for smaller and newer companies.
“It will benefit the small enterprises, however, for larger enterprises they probably have a bigger engine to take advantage of government funding,” said Witherden.
“So, the challenge for the small enterprises is juggling all the other things they’re doing while at the same time chasing these sorts of grants.
“It’s not easy but I agree if they can get it right it could be a great leg up.”
An important aspect to the wider adoption of technology in the production process is employing more tech experts.
“There’s a real theme within the Roadmap around trying to get technical people into industry and it’s good. I think there is a piece there about people who understand how to drive commercial outcomes, so there are a whole number of people that have a role to play in getting industry to move forward,” said Coleman.
A key to the initiative is bringing the industry forward but also allowing companies to adapt to new technologies easier.
“They need to come up to speed and understand what digital does, how it impacts their plants and how it’s applied to their industry to create values,” said Coleman.
“That way they can articulate it and convince their own business to spend the money before they can go out and procure the things that will best drive value for them.”
Witherden put extra emphasis on the importance of data and what can be achieved when it is utilised correctly, such as a ‘lights out’ operation.
“A lot of our manufacturing clients have their data but don’t know what to do with it. Historically they’ve collected a vast amount of data, a lot of sensors, but they have no ability to put that information in the hands of people that can actually use it,” said Witherden.
“Because they don’t necessarily know how to understand that they can’t go fully lights out, so therefore you need to present the data first. I believe a lot of these initiatives will encourage our clients to invest in some of this analytical work.
“Beca is on the client’s side to make sure they are future proofing their business.”