SEPTEMBER 2023
Digitalization
Driving Successful Digital Transformation
in the Food and Beverage Industry
Engage a full-service business partner with OT expertise to improve supply chain traceability, navigate the cyberthreat landscape, and optimize operational and business workflows.
In today’s complex manufacturing landscape, successfully running a food and beverage (F&B) facility is no small feat. On top of day-to-day operational challenges—including an aging workforce and rising wages and material costs—processors are expected to maximize production and continue increasing bottom line profits, while protecting against recalls and adapting operations in accordance with corporate sustainability initiatives.
Relying on the methods of yesteryear, meeting these expectations is unrealistic, so processors must invest in modern digitalization tools just to have a fighting chance—and this is only the beginning. It is not enough to merely purchase advanced software and hardware, but these components must be strategically planned and implemented to align with business workflows and organizational procedures.
BY John Parrott and Carlos Ortiz
With integrated hardware and software ecosystems, modern integrated traceability solutions help suppliers track the movement of ingredients and products throughout their facilities and around the world. Image courtesy of Siemens Industry
John Parrott is the vice president of digital industries at Siemens and leads the food and beverage/CPG vertical market in the U.S. He has been with Siemens for more than 20 years, serving in various leadership roles. In his current position, he supports key clients in achieving their sustainability goals and accelerating their digital transformation journey.
Digital transformation is a holistic field that combines strategic planning, data generation, analysis and insight creation, safe and secure information access, informed decision making, operational optimization, and the business mindsight to continually improve. For most F&B operations, there are three key areas where processors should review their procedures and consider making policy changes to align with current industry best practices: enterprise-wide ingredient and product tracking and tracing, cyber-preparedness, and techno-economic integration.
Effective Tracking and Tracing
Supply chain challenges are not subsiding anytime soon, so the urgency to adapt and deploy enterprise-wide traceability solutions will continue. The production floor, especially, requires transparency to quickly address and mitigate concerns in the event that quality issues or recalls arise, and agile operation is critical to business continuity and production uptime.
Carlos Ortiz is a senior manager of advanced analytics and associate partner at Siemens with more than 16 years of data analytics, management consulting, internal audit and operations experience. He has helped strategy, sales, IT, materials management, productivity and internal audit organizations across a broad range of industries define and implement sustainable data and digital transformation programs.
Modern enhancements for internal traceability include radio frequency identification (RFID) and barcode systems, vision inspection and labeling systems, and software for managing associated records. These tools bolster internal operations, and also make it possible to provide suppliers, distributors and regulators with one-step-forward and one-step-backward traceability when required.
Traceability is more complex than merely installing central software, such as an enterprise resource planning (ERP) or manufacturing execution system (MES), to track and maintain records. Hardware must also be strategically selected and configured to work together with software. For many F&B processors, it is difficult to forecast implementation return on investment, creating a barrier to beginning a project.
However, the financial and reputational risks of compromised products and possible recalls are too great to continue using pen-and-paper tracking methods. Digital solutions are necessary to automate a great deal of formerly manual procedures, reducing the propensity for error that can lead to these types of catastrophic situations.
As F&B processors plan the transition to digital track-and-trace solutions, they must strategically determine what to track in these systems. Arrangements require the buy-in of suppliers, processors and distributors because track-and-trace works best when all stakeholders can openly share data from their respective operations. Leading solutions are implementing blockchain technology to verify transactions and events when scaling with multi-stakeholder environments.
Cyber-preparedness begins with taking stock of all connected components within the walls of a facility, including information about what is running where, at which address and for what purpose.
Assess the Cyberthreat Landscape
Technological innovation, especially related to data analysis and cloud transformation, can provide new capabilities while also addressing certain workforce-related issues, making jobs easier for personnel at all levels. In particular, artificial intelligence (AI) tools integrated across worldwide facilities are providing optimization insights for manufacturing productivity. While this enhanced connectivity is essential to support corporate imperatives for remaining competitive, it comes with shadow-side cybersecurity dangers companies must work diligently to mitigate.
While highly connected systems are now essential for operating in the modern world, they also introduce openings for cyber breaches if not locked down effectively. Further complicating matters, cybercriminals are now aware of the daily conditions business operate in, often with an acute understanding of the cost of downtime specific to a company. This knowledge enables more effective ransomware attacks, including financial demands for unencrypting data assets seized from an organization.
Data is at the core of modern manufacturing because it is used to make decisions, and losing access to data limits operational efficiency. This loss is at the core of a cyber breach, and intrusion in OT environments carries the additional weight of potential equipment-imposed damage or personnel safety risks.
Cyber-preparedness begins with taking stock of all connected components within the walls of a facility, including information about what is running where, at which address and for what purpose. It is only possible to protect what is tracked and understood.
Next, companies must develop and implement standard security protocols for individual devices, overall networks and personnel procedures—all part of a defense-in-depth strategy. As organizations expand, it is critical to align with the standards while adapting as necessary. And within each company, cybersecurity must be established as a sustainable service, a policy applicable not only to devices and assets but also to personnel and procedures.
These tools particularize both machine and process automation procedures, drilling down to foundational facility details to forecast operational throughput, project utility consumption, identify potential plant bottlenecks and more.
Combining Technology and Business
There was once a time when buying the right equipment was enough. But today, the business landscape is too competitive, and the risks are too great to simply make purchases and set up components without outside support. For this and other reasons, engaging the right experts to help align and deploy hardware, software and business strategies is critical to effective digital transformation.
For maximum impact, F&B processors should partner with consultants that understand the specific demands and nuances of operations technology (OT) environments because they can provide informed and targeted guidance. Among the firms in the market, many prepare businesses for digital transformation, but only a select few also implement their own suggested methods internally on a daily basis. This more exclusive group of consultants assess and prepare their own manufacturing facilities using the same methodologies employed with their clients, truly practicing what they preach. By partnering with one of these full-service industrial consulting firms, processors can rest assured they are following current best practices and creating sustainable digital standards embraced by industry leaders.
When obtaining these sorts of services, processors gain access to tools like digital plant simulators to help them optimize production. The models are built on the results of techno-economic studies—simultaneous investigation of technical operational practices and economic business procedures—using engineering details, such as equipment and processes, to validate the plan. These tools particularize both machine and process automation procedures, drilling down to foundational facility details to forecast operational throughput, project utility consumption, identify potential plant bottlenecks and more.
Engage a Full-service Consulting Partner
An F&B giant seeking to undertake digital transformation partnered with Siemens Advanta to assess its current practices and prepare a roadmap for business and operational improvements. However, before the assessment was even complete, the end user company saw so much value in the full-service OT consultant’s integrated expertise that it expanded the scope of work to include product specification, configuration, and workforce training and development. By placing the contract under one roof, the company received a holistic solution complete with a centralized software ecosystem, compatible hardware and procedural workflows aligned with overarching business objectives.
The team began work with a techno-economic study, and insights were immediate. The company realized 60%-70% of its revenue was at risk if it experienced a cyber incident or other disaster because it ran one major manufacturing and packaging facility for its products. Armed with this information, the company prioritized investing in additional smaller facilities to spread out manufacturing as well as to creating a cybersecurity master plan. The goal for the latter was identifying gaps, reviewing cyber and physical security posture, developing standards, and building a five-year roadmap for both technical deployments and personnel training.
The consultant’s expertise proved particularly useful for relating the technical details with business cost analysis, and it helped the company justify a multimillion-dollar cybersecurity roadmap. Additional results of the work included establishing a project management office to oversee the transformation and improvements over multiple years, standardizing cybersecurity practices and policies, deploying cyber detection and defense mechanisms, and introducing a cybersecurity training program.
In today’s connected world, it is no longer enough to bring in siloed experts from individual fields to equip a facility because they are likely to overlook critical integration details, or suffer from gaps and overlaps. Instead, teams must work together to create the best holistic solution, addressing the overall set of challenges. The easiest way to ensure this is by engaging a full-service OT consultant as an advocate for personnel, the plant and its processes—both business and operational.
To remain competitive, F&B processors must establish efficient and sustainable workflows aided with the right technology to meet ambitious operational goals. By modernizing traceability and cybersecurity practices, and partnering with an integrated solutions provider to plan and deploy holistic solutions, companies can proactively pursue successful digital transformation, and in doing so maximize profitability. FE
SEPTEMBER 2023
