Relationships Paramount in the Age of Automation

Over 90% of packaged goods companies want OEMs to offer deeper relationships and enhanced training opportunities on automation technologies.

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An increasingly automated world seems lonely at first glance, conjuring up visions of robots coldly operating in sterile factories. But, as it turns out, the future of automation may hinge more on warm relationships than technology.

As automation technology advances, consumer packaged goods companies, or CPGs, are recognizing the benefits of domestic equipment manufacturers and the value of ongoing training and maintenance relationships, according to PMMI Business Intelligence’s 2022 report “The Future of Automation in Packaging and Processing.”

Shop Global, Buy Local

The pandemic appears to have shifted the thinking of CPGs about globalization, with companies starting to look for domestic suppliers offering a more secure service.

“Whenever we can, we buy equipment that’s made in the US or has a huge presence in the US so that we know that parts are available here in the United States,” a manager at a food processing company said in the report.

Another CPG food manufacturer said saving 30% on capital outlay by purchasing custom machinery from China was highly attractive in the past. But the disruption to supply lines caused by the pandemic, notably the shutting down of Shanghai, a key global trade hub and the world’s largest container port, and the Sino-US trade tensions have made CPGs ask if these savings are worth it.

Lead times that stretch as long as 12 to 18 months have caused CPGs to consider suppliers for parts and machines who previously wouldn’t have been considered, especially those closer to home.

“Anything we’re adding, we try to make sure that there’s availability in the US; there’s a lot of equipment in this plant that comes from overseas,” one CPG food manufacturer said.

Furthermore, whereas CPGs might have previously relied on one supplier, it’s now considered essential for manufacturers to ensure they have multiple suppliers for machine parts owing to the unpredictable lead times.

Partnerships No Longer Just Transactional

The disruption to markets caused by the pandemic and the ensuing supply chain problems and labor shortages have pushed CPGs to recalibrate their relationship with original equipment manufacturers, or OEMs, and reset priorities when investing in new machinery.

“We don’t need somebody to come and sell us their latest piece of technology and then walk away and go on to the next customer. We want to buy from somebody who will train us,” a manager at a global personal care products company said.

OEMs are increasingly taking these factors into consideration when formulating their offers to companies.

“Labor shortages are putting a greater burden on us as OEMs to not only simplify the equipment to make it more user friendly and more maintenance friendly,” a mid-sized OEM representative said. “But we’re also forced now to do much more hands-on work to support our customers so that they can run their lines.”

Price and return on investment would have previously been a top consideration when companies were choosing a supplier or a machine. But the age of the transactional relationship between the CPG and the OEM is giving way to one of collaboration, support and ongoing cooperation.

Both CPGs and OEMs see significant advantages in establishing binding links through longer term service contracts, machinery as a service (MaaS), longer warranties and enhanced training services, for example.

CPGs are also calling on OEMs to take a holistic view of processing and packaging operations, rather than focus on their product’s specific spot in the process. With reduced availability of high level skills, CPGs are increasingly turning to OEMs for leadership in terms of planning and operation of plants.

Automation and Operator Training to Close the Skills Gap

TrainingPMMI Business Intelligence, 2022 The Future of Automation in Packaging and ProcessingThe operation of automated equipment on a production line requires skill, making the shortage of high-skill workers a long term challenge. Over 90% of CPGs would like to see enhanced training offerings from OEMs.

One trend among OEMs has been to offer training through continuous preventative maintenance agreements, as well as service agreements, where their engineers visit production lines on a regular basis to make sure that machines are operating at optimum performance levels.

When the engineers are in attendance, they provide on-the-job training to the production line staff, enhancing their skill levels so they become experts on their machines.

Some OEMs are also starting to offer remote solutions. Training innovations and technologies that were largely forced on companies during the pandemic remain in use, such as remote learning, wearable technologies and augmented reality.

Although the pandemic is no longer a driver, skills shortages mean that OEM support teams are continuing to use these solutions to save on their use of human resources and reduce their own travel times and costs.

One representative from an OEM remarked that these new technologies have helped their company with training and support by enabling augmented reality training, remote diagnostics and remote connection.

“If we can (be immediately responsive) from 10,000 miles away rather than sending somebody there, it’s going to save time and money, and make a better partnership,” the OEM said.

Overcoming the Limitations of Remote Training

Live training from 10,000 miles away sounds enticing, but remote training does come with limitations. It often takes engineers longer to learn things than they would with face-to-face training, the report says.

However, OEMs are aware that without remote learning and support services they will not be able to support all the CPGs they need to, due to their reduced number of skilled technicians. A possible solution is a support package that offers a mix of remote and face-to-face training.

This eliminates some of the perceived drawbacks of a uniquely remote package, such as the impersonal nature of remote training, potential barriers to communication, and the additional training that instructors and trainers may need to undergo.

Source: PMMI Business Intelligence, 2022 The Future of Automation in Packaging and Processing

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