Industrial Internet of Things (IIoT) for Food & Beverage & CPG Manufacturers

In the Industrial Internet of Things (IIoT) world, industrial analytics has been among the most widely adopted technologies, due in part to perceived ease of use and quick ROI. Broadly speaking, we’ve seen an adoption rate of nearly 60% across manufacturing industries. That's higher than manufacturing operations management/manufacturing execution system (MOM/MES) platforms (which has hovered at about 40% for several years) and even quality management applications, where adoption runs about 52%.

Food and beverage & consumer packaged goods industries are behind
 
There's a laggard in every group, and in this case, it's the world of food and beverage (F&B) manufacturing and consumer packaged goods (CPG) manufacturing.  Among these companies, adoption numbers for IIoT tech skews much lower—as do adoption rates for all other manufacturing software solutions, aside from planning and scheduling software, and quality management systems. The big question is: Why? Why are food and beverage makers and CPG companies so far behind when it comes to manufacturing software, especially IIoT?
 
Reasons vary from one sub-sector to another within these broad categories, and from one company to the next. However, we can make a few general observations based on what companies in these industries report as highest-level business priorities. Companies in the food and beverage/CPG industries spend a high percentage of resources on managing complex supply chains and improving flexibility to match varying consumer tastes—and legacy manufacturing software platforms have not been a match for these requirements. That is, coming up with recipes for the 60 varieties of baked beans we see on the shelf at the local grocer is very important to these companies; improving OEE is a lower priority. At the same time, companies in these industries often view manufacturing operations as a second-tier priority or they outsource operations altogether for cost reasons.
 
Additionally, companies in CPG/food and beverage lag their peers in empowering plant operators with data and decision-making authority.

Again according to our research, this signals a lack of maturity in how companies view and use IIoT technologies. Manufacturers that are more mature in their Industrial Transformation (IX) programs (3+ years) use the opposite approach, they specifically empower operators and their direct managers with the data and analytics―and the authority―needed to make decisions immediately, without waiting for senior management to weigh in. Moreover, our survey data shows that providing shop floor operators with visibility of data analytics has a marked impact on operational metrics including higher throughput and quality, and reduced costs.

What drives F&B/CPG is not the same as other industries

As we look at top use cases for IIoT analytics in the CPG and food and beverage industry, the results show a combination of business outcomes and manufacturing challenges. Forecasting comes in as the number 1 and the number 4 priority; in fact, food and beverage/CPG is the only industry we’ve surveyed that has this result. This posture matches well with the business and financial demands CPG and food and beverage manufacturers face, particularly given the emphasis on growth, profitability, and cost-cutting. Many of the other top use case responses align with other sectors we have surveyed, including continuous improvement programs, benchmarking performance, and improving quality.

Recommendations competitors want you to ignore
 
Should and can food and beverage / CPG companies even catch up? The strong correlation between the use of IIoT analytics and performance capabilities suggests that any company not planning to use IIoT analytics and related technologies is (or will) rapidly losing ground to competitors. For those with IIoT analytics already in play or on the way, the advantages will compound over time to create an even greater performance differential ahead of non-adopters.
 
LNS Research recommends that companies in the CPG/food and beverage industry that have not started down the path towards IIoT analytics start looking at use cases mentioned above to determine where analytics can best help them address current operational challenges. Across LNS, we've heard anecdotes about some very creative uses of IIoT analytics, and we're hearing stories about process and operational improvements from individual teams that had no idea that the data they needed for making decisions was even available. Even companies that have already taken a bite of IIoT analytics should revisit plans and programs on a quarterly or biannual basis―use cases and ROI calculations are constantly evolving, so that solution your company took a pass on last quarter might just be what it needs to catch up to competitors.
 
Learn how GE Vernova is helping industrial companies drive business results  plus gain insights on the impact of operational performance in the food and beverage and CPG industries. Our Proficy software solutions are increasing agility and delivering more sustainable manufacturing to FB/CPG companies around the world.