The Smart Food Revolution That’s (Nearly) Here

In the ever-competitive world of food processing, the challenges of changing conditions, be it shifting consumer trends, supply chain constraints or international relationships, are omnipresent. The battle to maintain a competitive edge dictates that the operations and facilities we build today must be prepared to compete in tomorrow’s landscape.

The hype of Industry 4.0 (I4.0) and its relevance to the food processing sector has been increasing since 2013 when the concept was conceived by the German government and for a concept which has existed for only six years, I4.0 is fairly mature. While the concept of I4.0 might be mature, it is not the tidal wave of technological upheaval it is frequently made out to be, nor is it knocking down the door of business. As we shall see, industry is now just starting to transition to something which could be referred to as I4.0, and there’s a long road ahead.

Wiley’s Chief Future Officer, Brett Wiskar, elaborates on what I4.0 is and how it can deliver value to the food industry.

To get a handle on the value proposition I4.0 offers to the food industry we first need a clear understanding of what it means beyond the buzzword. While it’s clear to most people that I4.0 is something involving technology, computers and integration in the supply chain or within a facility, industry consensus frequently ends there.

For clarity, I4.0 can be defined as: “The implementation of ubiquitous sensors and big data analytics connecting cyber-physical systems.”

In practice, this is the collection and analysis of data generated in every aspect of an operation providing previously impossible-to-access insights. These insights lead to enhanced strategic and operational decision-making. This applies to every aspect of food processing — from batch sizes to machine maintenance, to training and performance, logistics inventory, energy and water consumption, waste management and interoperability between process units. I4.0 affects every aspect of the food processing industry and its operations and hard assets.

This is distinctly different to Industry 3.0, which is characterised by the implementation of microprocessors for the automation of production. For example, consider the transition between Henry Ford’s factories and those of Toyota in the ’80s and ’90s. Toyota implemented microprocessors to automate their machines but did not implement prolific sensors and data analysis tasked with enhancing operations through real-time insights. It is these characteristics that are the hallmarks of I4.0.

With those two ends of the spectrum understood, it’s possible to appreciate industry’s progression from Industry 3.0 towards 4.0. Currently, a disappointing 16% of industry members use hard data to underpin process flow improvement. In what could be characterised as Industry 3.0 behaviour, the vast majority of process flow improvements come from human observations. Only 29% of manufacturers have access to instant, real-time information on every product they are producing. In a Deloitte survey, 94% of executives stated digital transformation was among their top priorities but only 37% of Australian executives said they feel ready for I4.0, with many fewer successfully implementing the technology.

These statistics point to an industry taking the first steps in transitioning to I4.0 as opposed to the “here and now” message we often hear in the press.

While it is very likely I4.0 will empower businesses like never before, there are steps processors must take before we can say we’ve reached the aspired position of being a business empowered by I4.0.

The implementation of ubiquitous sensors as a first step is already underway and will continue until we find ourselves discussing what’s beyond 4.0. The next half-dozen years in the food I4.0 space will be characterised by the question “what data should be collected?” As answers become more advanced, there will be a gradual increase in focus on analysing the data to ever greater precision and insight. Finding a balance between what we can track and what we will act on if we track it is the difference between overinvesting or not investing enough to empower outcomes.

Finally, as with any business management challenge, the change will come down to people and implementation. A culture of implementing I4.0, finding the insights and having the team and the resources who are willing to act on them is going to be as large as the technical challenge.

Once the food industry reaches I4.0 what awaits?
Interconnectedness and abundant information will be used to empower enhanced decision-making. I4.0 will empower industry to monitor, synchronise and correlate different elements of business highlighting how separate process units impact one another and the overall operation. Increased data flow will empower accelerated decision-making and response times. This is much more than cutting down on unplanned maintenance time, it’s an industry-wide shift in mindset. A shift away from “you can have any colour you want as long as it’s black” towards mass customisation, shorter supply chains and more effective and efficient activity on the factory floor. The core outcome will not only be an increase in efficiency but an increase in agility.

As a concept conceived in 2013, I4.0 has a level of maturity commensurate with the time it’s been evolving. As sensors and business practices develop, the full value proposition of I4.0 will continually crystallise.

For the food executives of Australia, there are two key takeaways: I4.0 is not here yet but it is coming, and perhaps more importantly, there are very real benefits to adopting this technology. Faster adoption means greater actionable insights and paired with a culture of striving to do better will lead to a true competitive advantage over the laggard in industry.

“While the transition to I4.0 will not be easy, the companies with clear leadership and strong implementation will be the ones to come out on top of the 4th Industrial Revolution,” Wiskar concluded.