Automation and Robotics: Workforce Driving Adoption, Restraint
According to a Packaging World Survey, CPGs are paradoxically either adding or not adding automation and robotics for very similar predictable reasons.
The results of our Packaging World reader survey of CPGs on automation and robotics could be combined with our workforce survey in that staffing issues are a running theme throughout the collected data.
First things first, however, according to those surveyed, companies are very interested in adding automation and robotics. Almost two-thirds of respondents (65%) indicated they would add automation equipment, cobots, or robotics to their packaging operations in the coming year. Two of the strongest reasons cited for adding the new technology center around labor issues.
In fact, the number one reason in favor of adding automation equipment by far, with 61% of respondents, was reducing the cost of labor/good ROI case. Automation and robotics have evolved to the point where operations can justify to the C-suite that it is more cost-effective over the long term to add automation vs. the high cost of labor or, as 33% indicated, the difficulty in finding labor to start with. In a workforce crisis that has reached epidemic levels, automation is being highlighted by CPGs as a leading solution.
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Rick Rice, controls engineer/project manager for Crest Foods, evaluated the survey data and was not shocked by the correlation between adding automation and robotics and workforce issues.
“I’m not at all surprised by the results,” Rice says. “The workforce simply did not come back after the pandemic. The diminished labor pool seems to be the justification needed to make [adding automation and robotics] happen.”
Jackson Hume of Territorial Seed Company echoes Rice’s sentiments when Hume completed the survey, adding that the increase in innovation in automation and robotics, coupled with labor shortages, makes their addition all but inevitable.
Making it Better/Safer for the Workforce
We would be remiss if we didn’t add that speed/throughput and volume was the second strongest reason for adding automation, coming in at 34%. Still, we feel that, and we may be editorializing too much here, that is more of a typical response, as we have found through decades of covering the packaging industry, that most capital equipment purchases are made with an aim towards improving output.
“Reducing cost and adding speed to a production line has always been a good thing,” Rice says.
The next two most common survey responses, each with 27% of respondents in favor, provide more insight into the workforce tie-in. The first indicates a desire to add automation equipment to improve safety, highlighting ergonomics and risk assessment, and the second concerns improving repeatability/accuracy and precision.
“When we had a large labor pool, it was easy to throw people at [end-of-line palletizing, for example], but a smaller workforce means we have to keep the skilled folks on the primary packaging end of the line,” says Rice.
Survey respondent Miquel Mendez of Coca-Cola also highlighted palletizing in particular as an area where planned automation will increase worker safety by eliminating the need for them to do those repetitive tasks. Fellow survey respondent Jeff Kes from Whisker also saw potential in added automation by expanding how it could reallocate current labor by taking it off end-of-line operations.
These responses align with the three Ds often associated as critical factors in implementing robotics and automation: Dull, Dirty, and Dangerous. Operators in a packaging facility are human. They get fatigued and bored and experience wear and tear from physical activities. This can put them in danger and create a situation where their accuracy can wane from hours of repeating the same uninteresting task. By automating these tasks, the worker is physically and mentally preserved while allowing companies to move the labor to more inviting jobs that stimulate the mind. It’s not a giant leap to determine that a more engaged worker is likelier to like his job and less likely to leave, improving retention rates.
As a senior engineer at Procter & Gamble, Ervin Hardee has seen automation enter the packaging sphere and improve exponentially over the past two decades. In his opinion, these improvements are major contributors to the survey results.
“Robotics has come a long way in just the last 5 to 10 years,” he says. “Safety, ease of operation/programming, skills needed, cost, and flexibility, to name a few of the reasons [how they have improved.]”
Based on the survey respondents’ comments, it is no coincidence that when it came to adding robotics, 39% specified end-of-line (palletizing, etc.), followed by secondary packaging at 33% and primary packaging at 25%.
Randy Quick, director of global engineering and maintenance for Spectrum Brands, agreed with the results, citing many of the listed options and reasons for adding automation.
“Most of [our] planned automation is in direct packaging, inspection, specific manual operations, and palletizing that is not currently automated,” Quick said. He further specified an example involved replacing a taxing manual operation with robotics to alleviate the need for temp employees.
“One example is a gallon bottle that has a trigger attached to the handle for the consumer to use if needed in the bottle,” he says. “Currently, these are attached manually by temp employees, but in the future, this will be a custom-built robotic application for this specific task.”
Other applications include inserting a loose hose end in the case of three bottles for Amazon sales. This is currently accomplished with temp labor as well. Soon, these will be handled by custom-designed robotics for this application.
When it came specifically to automation, respondents named secondary and end-of-line tasks like cartoning (28%), case/tray packing (25%), case erecting/sealing (25%), labeling (25%), and palletizing/depalletizing (19%) as the leading areas where they plan automation and robotics. It’s often the case that primary packaging is where automation happens first, since it tends to require the most speed and precision. Afterward, the bottleneck of slower and less repeatable human labor travels downstream on the line. So, results indicate some level of packaging automation sophistication already in place among respondents’ organizations—bound to be the case with likes Coca-Cola and P&G. But as Rice mentioned, it seems that downstream tasks are being automated as well, to pinch hit for a dwindling workforce.
Internal Allies and Hurdles to Implementing Automation
Survey respondents noted nearly the same lead answer regarding both the biggest internal ally in procuring automation and roboticsandthe most significant internal hurdle to adding the technologies: plant operations. Hardee summed it up succinctly, “Operations would be the biggest customer, so it has to benefit them, or it’s a hard sell.”
Sure enough, 57% of survey respondents listed operations as their biggest ally, followed by engineering at 50%, plant maintenance at 24%, and the C-suite at 20%. No other perceived ally broke 20%, with third-party integrators (18%), robotics manufacturers (17%), packaging machinery OEMs (15%), supply chain leadership (12%), and procurement (11%) all breaking double digits. Rice felt these aligned perfectly with how his company has found automation and robotics implementation.
“Getting operations, engineering, and maintenance on board was the first step, but now that we are well down the road on this, we have some solid vendors who are equally invested in the process, and we have developed some great relationships to make it happen,” says Rice “It is important to note that we didn't put all our eggs in one [vendor] basket and that is helping to encourage innovation.”
As for the biggest internal obstacles in adding automation or robots, procurement barely nosed out plant operations, 38% to 34%. Plant maintenance was also the third biggest hurdle—just as it was the third largest ally—registering 28% of the vote, followed by the C-suite at 27% and supply chain leaders at 20%. Engineering (13%), third-party integrators (12%), robotics manufacturers (11%), and packaging machinery OEMs (11%) were the only other hurdles that broke into double digits.
Procurement's ninth place ranking as an implementation ally, and first place finish as a hurdle, jibes with its lead position as a hurdle, with those in charge of the purse strings perceived to give the most resistance to added expenditures.
Not Adding Automation or Robotics
Obviously, no data is complete without revealing the other side of the coin. While nearly 65% of respondents indicated they would be adding robotics in 2025, that left a not insignificant 35% who have chosen not to automate in the coming year. Let’s find out their reasons.
Respondents’ number one reason for not adding automation and robotics, with half citing cost, was the cost of automation and a bad ROI case.
Survey respondent Jimmy Nguyen of QuocViet stated plainly that his company was not planning to add automation because “it costs too much.”
This wasn’t too surprising as cost is typically the biggest hurdle to capital equipment purchases.
“We haven't seen much in the way of hurdles, but cost is always a determining factor,” Rice says. “We recognize the advantage of automating our lines but want to be fiscally responsible about how far/how fast we go about this.”
The next highest reasoning makes perfect sense and doesn’t require much analysis. Thirty-five percent of respondents who aren’t purchasing equipment simply do not have the floor space or a big enough footprint to add automation or robotics.
Conversely, survey respondent Tom Hooyman, packaging engineer for the Bel Group, actually cited the improved ability of robotics to fit into smaller footprints as one reason he believes automation will continue to increase in usage.
Rice feels that robotics, and particularly cobots, have come so far that even footprint issues will soon be rendered moot.
“Cobots are a huge part of the automation of a line,” he says. “We can literally replace a human and have the robot work right beside another human, confident that the human will be safe.”
Two of the next three most common responses bring in facets of the workforce crisis. The third largest hurdle to adding robotics and automation is finding skilled technicians and maintenance staff at 31%. CPGs are simply having too hard of a time finding the labor to properly run and maintain their current equipment, so how can they justify adding what they perceive as even more complex new automation and robotics? While the fourth-highest response at 27% was the inflexibility of equipment and frequently changing packaging designs and materials, right behind that at number five, 24% cite the biggest hurdle towards incorporating automation and robotics as the complexity of programming controls or an inability for unskilled workers to operate the equipment.
All told, our data represents quite a unique situation. For both sides—those who are embracing automation, and those who aren’t—a running theme of workforce issues is listed is their reasoning, and these are some of the most significant criteria for their responses and potential decision-making. Those who are adding automation believe it can help offset the rising cost of labor, perhaps lead to worker retention by eliminating repetitive tasks, and offset the inability to find labor in general. Those who won’t be incorporating automation cite the inability to find labor as well. But they also fear the technology is too complex for the workers they are able to find. Or it requires too skilled (read: expensive) of workers to maintain overtime. Quite the quandary.
And briefly back to that hurdle regarding equipment inflexibility—we’ve already seen SKU proliferation force OEMs to build machines that are capable of fast changeovers, to accommodate more product variety than ever. Exacerbating the existing trend is the advent of new materials—like the paperization movement or compostable films—that didn’t exist when equipment was built. Packaging materials once designed or converted with machinability in mind, now serves a different master in sustainability. Brands need machines that can keep with these two existing trends and be ready for whatever’s next. PW
Methodology
In the inaugural Annual Outlook Report, PMMI Media Group editors reveal, analyze, interpret, and discuss with experts results of the first-ever Packaging World Annual Outlook Report. The undertaking represents a wide-ranging, big-picture view of the most impactful topics and issues faced by brand owners, consumer- packaged goods (CPG) companies, fast-moving consumer goods (FMCG) companies, and food and beverage manufacturers and packagers.
Over the course of July, August, and September 2024, editors developed, pressure-tested with CPG experts, and deployed five distinct email surveys. Containing only eight to 10 questions each, these surveys aimed to bring into sharp relief the nuanced features of what to expect from in packaging over the coming year. The surveys were sent to equally portioned segments of PW’s CPG readership, on these five pillar topics:
Sustainability—88 respondents
Automation & Robotics—118 respondents
Workforce—79 respondents
E-comm & D2C—118 respondents
Digitalization—96 respondents
A sixth topic and pillar of the Annual Outlook Report, on the topic of contract packaging, piggybacked off survey results gathered and analyzed by PMMI’s Business Intelligence, released in October 2024’s “Contract Packaging & Manufacturing: Drivers of Machinery Investments.” From the wider results of that report, we narrowed our focus to the specific voices of brand owners, and their sustained interest in contract packaging services.
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