How Lean Manufacturing Can Be Used in the Food & Beverage Industry
Going into 2023, Canadian food and beverage operators from all sectors continue to slowly recover from revenues lost during the pandemic and are looking to the new year with cautious optimism.
To address this topic, this blog was written in collaboration with Jamil Karim, Communications Director – Canadian Food Innovation Network (CFIN) to bring Canadian food businesses industry-leading market insights and address challenges facing the sector today.
FCC’s 2022 Food Industry Report shows that the food manufacturing sector has outperformed other sectors in terms of recovery and growth, with sales projected to jump 7.4% this year. But with lower margins, inflation, rising costs of energy and raw inputs, global uncertainty, and consumers who are still adjusting to economic realities, food businesses will continue to face numerous challenges in 2023. Three of the biggest roadblocks to success for Canadian food companies today are: ongoing labour shortages; supply chain disruptions; and responding to changing consumer demands on issues such as sustainability, traceability and transparency, and packaging and plastic waste.
The use of automation, robotics and data analytics have the potential to help Canada’s food and beverage industry face all three of these challenges. Companies that introduce digital solutions and automation technology can build resilience into their systems and find themselves better prepared to seize new market and growth opportunities across the globe.
Although the move to digitization has been slower in the food sector than in other industries, food companies which add automation, connected equipment, and frontier technologies like Artificial Intelligence and blockchain can build traceability, transparency, and strength into their supply chains. In addition, automation will help businesses respond to changing consumer demands with greater agility, while alleviating with labour and food safety challenges.
Robotics are increasingly addressing both labour and supply chain challenges in many manufacturing facilities. Robots and automatic systems are designed to do the tasks that are dangerous, dirty or repetitive, so employees can perform more skilled responsibilities. In fact, there are many collaborative robotic systems with added safeguards in-place so that they work side-by-side with their human counterparts. The costs of implementing automatic systems and robotics have fallen significantly in the past decade, while performance and consistency have increased dramatically, and this technology is now much easier to integrate into food operations.
Food companies should also consider investing in Supply Chain 4.0 solutions which improve operations and add greater traceability and transparency to their food supply chains. In coming years, expect to see additional technology that provides operators with real-time data analytics to help manage supply chain and inventory, allowing businesses to optimize the use of raw materials and energy, reduce waste, and achieve higher production capacities and margins. Data analytics can also be used to predict preventative maintenance in the system and prevent drops in throughput.
As well as demanding greater transparency, Canadians expect Canada’s food industry to become greener by reducing food waste, energy consumption, plastic usage, and carbon emissions, all while building more sustainable supply chains. Further investing in digitization and automation will help close this circular economy — from packaging and production through to waste disposal — while removing costs and inefficiencies throughout the process.
The Canadian Food Innovation Network (CFIN) is a not-for-profit organization helping to accelerate innovation in the food and beverage industry through connections, collaborations, and investments across Canada’s food ecosystem. CFIN has a unique opportunity to see innovation in the food sector through information shared by our Innovation Advisory Council and our 2700+ members. This insight results in funding programs and services that help food businesses and their partners bring innovative ideas to market, with an emphasis on smart product and process development and sustainable food supply chains. CFIN also offers YODL, an interactive online platform designed to help food and beverage professionals from all sectors of the industry connect, learn, and grow their businesses.
For more information visit CFIN or contact one of our Regional Innovation Directors.
How Can I Leverage Government Funding to Improve my Food & Beverage Business?
To manage many of the challenges facing the food & beverage sector, many Canadian organizations are continuously implementing Lean Six Sigma projects with great success. When performed in an intelligent, forward-thinking way, these types of projects will almost always lead to sustainable profitability increases.
The adaptable framework can apply to nearly any business challenge and provide a structured method for organizational improvement. This article is the third installment in a manufacturing series that looks at the challenges facing Canadian manufacturers as we look ahead to 2023 and how methods like Lean Manufacturing and implementing government funding can help resolve many of these hurdles.
The case study below features antiquated business processes that no longer met market standards. Through the application of Lean Six Sigma initiatives and hiring & training grants, they transformed their processes and saw immediate benefit to revenue and profitability.
Addressing Labour Force Challenges
For food & beverage manufacturers, it can be difficult to find enough staff to operate facility machines. Not only are companies competing for talent, often making offers to applicants with multiple interviewing opportunities, but they are also dealing with significant resignations as a result of the COVID-19 pandemic and retiring of baby-boomer generation employees.
A 2022 report commissioned by Food and Beverage Ontario has identified significant challenges specific to the food & beverage sector. Namely, frontline production positions seem to be difficult for companies to fill and maintain.
“When it comes to the F&B manufacturing sector, these shortages are particularly acute in frontline production and apprenticeship roles (i.e., quality control technicians, millwrights, electricians, and other skilled trades). While worker shortages in the sector predated the pandemic, these issues were magnified with the onset of COVID-19. Employers expressed concerns about pandemic-related absences and labour shortages, putting additional pressure on existing employees to fulfill production targets.”
The study found that employers are considering new approaches to the hiring and retention strategies to fill these gaps including:
- Increased vacation policies;
- Pay increases; and
- Other workplace benefits.
Although a changing workplace may become a new standard for the food & beverage sector, there may be other approaches that businesses can take to address their productivity and labour force challenges.
A Canadian Food & Beverage Manufacturing Case Study
One Canadian food & Beverage manufacturer has found great success in leveraging government funding programs to address the labour and technology challenges facing the sector today.
Canadian Food Innovation Network
The Canadian Food Innovation Network provides some of the top funding programs in Canada for the food & beverage industry. CFIN receives a portion of the funding from the Strategic Innovation Fund of the Government of Canada and frequently opens new intake periods.
Significant programs to be aware of include:
These CFIN programs vary in project themes, eligibility criteria, and have continuous deadlines making them ideal opportunities for manufacturing organizations operating in the food and beverage industry.
We highly recommend that you join the YODL platform to ensure you stay up to date on all the top opportunities available through CFIN, as well as industry-leading thought-leadership.
Updating Equipment with SWODF
Manufacturers in the food & beverage industry often need to improve their machinery as well. As the world becomes more technologically advanced, there are new and innovative ways for manufacturers to do more with less. One of these approaches is to implement a Lean Manufacturing approach. For a general overviews of this methodology, please read article #1 in this series, Lean Manufacturing a General Guide.
Business expansion funding through the Southwestern Ontario Development Fund (SWODF) enables companies to invest in new equipment and facilities, as well as economic development organizations, municipalities, and consortiums to invest in infrastructure or implement strategies to advance regional interests.
The Canadian company in our case study was struggling with machinery that had low output volume, outdated systems, and was producing too many discarded products for waste. To solve this problem, the business knew they needed to purchase new equipment and implement a new system to improve their facility.
To achieve these goals, the business worked with Canada’s government funding experts to successfully write and submit a winning application via the SWODF program. To their success, the company was able to significantly improve their investment with a just under $1 million in funding support. This Canadian company implemented a Lean Manufacturing approach which increase productivity significantly, as well as reduced discards, a true funding success story.
How Government Grants Like COJG Help Hire and Train Employees
When planning on expanding or developing a workforce, there are government initiatives for recruitment activities to secure qualified workers and ensure they have the skills and capabilities they need for your business to thrive.
Leveraging these programs helps companies hire staff, improve their effectiveness, and train their employees in new areas such as advanced technologies/machines or operational systems.
COJG offers employers grants to purchase third-party business training programs, including training for in-demand skillsets. By improving the employability and value employees provide this company was able to maximize its’ funding potential and increase their productivity.
This Canadian company was able to secure a Canada-Ontario Job Grant (COJG) to supplement over $250,000 in costs for training employees. By offsetting the costs of training employees, this company was able to significantly improve their operations and employees skills while drastically reducing the associated costs and risks.
Get Started with Government Funding
Canadian manufacturers can take advantage of a variety of programs and opportunities listed throughout this article. However, the process of identifying government funding programs is only the first step. Once your business has this information, it must align relevant projects and strategic spends, then develop and submit a detailed application.
You’re not alone in this process. For more information about your options or to get started on applying, download our free slide deck or contact our team today.
To address this topic, this blog was written in collaboration with Jamil Karim, Communications Director – Canadian Food Innovation Network (CFIN) to bring Canadian food businesses industry-leading market insights and address challenges facing the sector today.