3 Tips for Unlocking Cost Savings in Food Manufacturing Through Technology Integration
Changing consumer expectations are increasingly forcing food and beverage producers to evolve their operations strategy. Between inflationary pressures and rising prices at checkout, consumers are looking for value and aligning with brands that can deliver the quality they want at a price they are willing to pay.
This business reality marks a major shift for food and beverage leaders. Over the last several years, most were focused on expanding production capacity to manage and capitalize on the pent-up demand from the COVID era. But, with consumer demand dipping and price hikes no longer a viable strategy to drive revenue gains, manufacturers are instead prioritizing driving down cost per unit as the key to realizing revenue.
Despite this challenge, there are opportunities for manufacturers to realize cost savings in the near-term if they can address areas often prone to waste and inefficiencies. By adopting the right technology and building them into scalable, repeatable processes, manufacturers can see positive impacts on their bottom line — not just in the short-term but position themselves to be more agile and adaptable in the face of future market changes. We outline below three operational areas where food and beverage companies can drive near-term costs savings.
1. Optimize utility usage.
Businesses are increasingly getting smarter with their utility spend as they look to stay on track toward long-term sustainability targets. Yet for most manufacturers, evolving operations to reduce utility spend is often a significant and time-consuming undertaking. For even the most efficient and forward-thinking organizations, this process often ends up taking at least three to six months. The right technology solutions can cut down on this implementation time and uncover areas of waste in spending that can be immediately corrected.
Electricity and water are two of the largest utility expenses for food and beverage manufacturers, but they too often suffer from ineffective monitoring. This lack of monitoring results in an incomplete picture for businesses where they struggle to understand where their money is going or data inconsistencies do not accurately pinpoint problem areas.
In pairing software solutions with advanced analytics capabilities, manufacturers gain a better understanding of where, when and how their facilities use energy, establishes the necessary scope of their savings efforts, and defines key metrics. This baseline makes it easier to spot outliers and take swift corrective action to avoid racking up unnecessary costs. Many of these solutions, when paired with AI, also provide dashboards and advanced visualization that can give manufacturers the hard data justification they need for their business.
2. Reduce overfilling.
Fill variation is a persistent challenge for CPG manufacturers. For fear of underfilling, which brings with it regulatory risk, many choose to err on the side of overfilling. And while that protects the business from some downsides, it results in lost revenue, wasted product and unnecessary costs.
Achieving consistent and accurate fills requires greater visibility in manufacturing operations, particularly around variables that traditional filling methods struggle to control. Soft sensor technology, which is increasingly being used with AI, plays a key role in understanding what is being filled and smartly predicting the potential variables. These solutions provide continuous and real-time monitoring of production lines and can generate predictions about the weight of product being filled in each package.
With this predictive data, operations teams have more control in the filling process, giving them information they need to increase the fill setpoint when the weight is predicted to be low and decrease the fill setpoint when the weight is predicted to be high – all of which leads to precise and cost-effective fills.
3. Leverage the power of copilots.
As with many industries, food and beverage manufacturing is being transformed through AI. Manufacturers are increasingly investing in AI platforms and software that can acquire and synthesize large amounts of data. These tools are becoming vital to any effective manufacturer. Yet in the case of food and beverage manufacturing, the lack of domain knowledge serves as a roadblock, limiting their ability to make data-driven decisions and resulting in lower ROI.
Operational copilots can act as a necessary bridge, serving as a translational layer that large language models and generative AI need to understand and act on large datasets. For CPG manufacturers, this gives their data valuable industry context that will be used for smarter decision-making and actionable insights. These copilots can not only identify short-term cost savings opportunities, but they also offer long-term incentives.
By utilizing copilots, manufacturers can ensure standardized, repeatable processes that act on data all in the same way and can be scaled for business needs. This also leads to reduced troubleshooting time, with copilots automatically recognizing equipment alarms and quickly deploying resolution procedures. These serve as immediate cost-saving examples, but there are applications across the entire plant floor that can ensure manufacturers have the long-term business value necessary to recoup their AI investments.
The complexities of the last several years for food and beverage manufacturers shown no signs of stopping as consumer preferences continue to evolve. Fortunately, the growth of technology and automation applications are creating new opportunities, both to drive immediate savings and to help manufacturers stay adaptable in uncertain market circumstances. Manufacturers that can leverage this technology and address these three areas will position themselves for success now and for the future.
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