Using automation to overcome production roadblocks

More coffee and tea companies are turning to automation in warehouses to not only improve efficiencies but also as a solution to labour shortages, particularly as the cost of automation decreases while labour costs continue to skyrocket. By Tom Egan

Warehousing automation plays a critical role in the success of tea and coffee producers’ operations, according to the 2023 Packaging and Automation in the Warehouses of the Future report produced by PMMI, The Association for Packaging and Processing Technologies. Warehouse operations for many consumer-packaged goods (CPG) companies are still highly manual and often operate from outdated buildings with unsuitable layouts, causing bottlenecks in their operations, according to the report findings.

The main drivers of automating warehouse operations are labour and skills shortages, but this lack of skilled workers also can act as a roadblock since tea and coffee makers often are challenged to find the right people to operate new technology. According to the PMMI report, 90 percent of CPG firms reported labour shortages were impacting their performance, with 60 percent of companies saying they were extremely impactful in their operations. According to the research, for some companies interviewed, it is a choice between automating the line or stopping production. More companies are turning to automation as a solution, in part because the goalposts for return on investment (ROI) have moved, with the cost of automation decreasing while labour costs continue to skyrocket.

In the context of tea and coffee producers, the report suggests that automation can help improve supply chain efficiency and reduce time to market. Automation also can also help tea and coffee producers reduce the risk of errors in their operations, leading to significant cost savings.

CPG companies are beginning to realise that a piecemeal approach to automation can be effective. A commitment to full automation may not be necessary. End-of-line processes are ripe for automation due to the operational bottlenecks that can occur in this area. The research indicates that e-commerce is impacting the processes of nearly half of the CPG companies interviewed and there is a clear movement toward more responsive direct-to-consumer models disrupting highly manual warehousing formats.

Warehouse automation

Two of the most automated processes within the warehouse are associated with logistics – warehouse management and inventory control. This may be because both functions tend to have a lower cost of implementation and a more appealing ROI compared with investment in automation machinery. Palletising/depalletising and secondary packaging are the other processes with the highest levels of automation in the warehouse, while the remaining processes are dominated by manual labour (over 60 percent of CPG firms report these functions are either fully or mostly manual in their warehouses).

Currently, automation technology with the highest level of usage is conveyors (61 percent). This is quite possibly because of the wide range of applications conveyors serve and their relative simplicity compared to other technologies. Automated labelling and wrapping/sealing are also common, but over two in five (40 percent) of CPG manufacturers have yet to implement this equipment. Another area of opportunity for tea and coffee producers is in mobile robots, with just 16 percent of respondents using them in their warehouses.

Many CPG manufacturers (35 percent) still are reluctant to increase their spending on automation. Reasons behind this range from the physical suitability of their existing warehouse facilities for automation to concerns relating to long ROIs and high upfront costs. Some of the reasons differ between smaller and larger companies, and their approaches can vary depending on the levels of ROI they can achieve from automation. High levels of inflation pushing up consumer spending on food and drink and nondurable products, coupled with skills and labour shortages, appear to be driving investment in warehouse automation technology.

Another technology being considered by CPG companies is the use of cobots (robots designed to work with humans in a shared workspace), particularly for processes currently performed completely manually, such as repacking, loading, palletising, etc. Any increase in shipping singular units or shipping more mixed pallets is expected to make robots and cobots more appealing to CPG firms due to the time-consuming manual tasks generated by increased flexibility.

With so many advantages to be gained by implementing automation in warehousing operations, coffee and tea producers should examine all the options available.

  • Tom Egan serves as the vice president of Industry Services for PMMI, the Association for Packaging and Processing Technologies. He joined the PMMI staff in 2003 following more than 20 years in the packaging industry during which he was also an active PMMI member. His previous work experience includes tenures at Eaton Corp. and as VP, marketing & sales, for Hoppmann Corporation. He has an MBA from Baldwin-Wallace College, and a BEE in Electrical Engineering from Villanova University. For more information on PMMI’s PACK EXPO East 2024 (18-20 March, Philadelphia, Pennsylvania), visit: packexpoeast.com

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