Creating the best recipe for success
Robotics and automation have been growing considerably across many industries, including the food and drink sector. Furthermore, the risks and losses occurring from this move to technology driven production, are also starting to be seen.
Ocado have been hit with a second fire in the space of three years originating from their robotic selection vehicles.1 The impact on Ocado of this recent loss, in the first few weeks after the fire, does not seem to be as severe as their original and larger fire in 2019. It is believed that the reason for the lower impact of this latest loss is that this premises was designed and equipped specifically with their technology in mind.
Food and drink manufacturers differ widely in terms of scale of operation and types of processes undertaken. The range of automation and robotics adopted is often dictated by efficiency and cost, balanced with product requirements. Although lagging behind other traditional robot-using industries, the food and drink industry had 11,000 industrial robot units installed in 2019.2
In common with other industries, the food and drink sector has suffered an increasing frequency of ransomware attacks. A recent attack on meat giant JBS resulted in them paying $11m in ransom payments, after attacks led to disruption within their plants. A leading food expert warns that Britain’s food supply is highly vulnerable to cyber-attacks from organised crime groups, increasing the pressure on an already stretched food supply chain. There are calls for the Government to take more seriously these food security issues, in order to enhance resilience within the UK food supply chain.3 This risk continues to move up the risk registers of businesses across the sector.
The process of using technology to automate production in the food and drink sector has gathered pace. There is a wide range of available technology, including 5G, Internet of Things (IoT) and Artificial Intelligence (AI), but for many smaller food and drink manufacturers, this technology is currently out of their reach, due to its costs, development lead in and hesitancy to use it in certain environments. However, it must still be recognised that technology can support strategic and operational objectives.
Currently these could be:
It is vital to identify where you are on your automation journey, where you can and would like to get to. This journey will affect a number of stakeholders; employees, suppliers, customers and can be quick or complex. It can create risk simplicity and resilience or create complexity and additional risk. Below, we consider three stages and how they could impact your business operations.
For an artisan hand-made producer of food, automation will never be at the forefront of production, but it can still provide benefits in other areas, such as:
As automation technology continues to develop, businesses are automating selected processes which provide benefits, whilst needing to maintain additional risk controls. Examples include:
An on-site physical presence is still required to undertake non-automated processes, including follow up and to monitor risks such as the interaction between employees and robotics.
These are generally installed in new, purpose-built facilities incorporating automation by design. For instance, Ocado have automated grocery pickers that would not have been able to work in their previous warehouses. Examples include:
The journey towards full automation will have many risk management implications, which need to be fully understood and addressed. These include: the complexities of movement towards automation while still engaging with legacy systems; previous manual processes and losing the human knowledge behind these before a new system is reliable.
Technology brings both opportunity and risk, examples of which are listed below:
For those dealing with risk within the food and drink manufacturing sector, understanding and influencing the automation journey will be invaluable, as some of the risks are temporary and the value of automation in other areas of risk such as governance is a long term positive.
A single point of failure is still that. An acceleration of reliance on technology without an updating of business continuity plans, or alternative manual key processes, could bring about serious issues. This will be especially true, as automation technology becomes more advanced and complex, including robotics and IoT.
Without people you will not have knowledge of the pre-tech processes, you will not have a level of engagement to make the technology change work and you will not receive feedback to identify potential risks or pitfalls. Always build technology around your people, as they will continue to be your most reliable back up and your most valuable asset.
For further information or guidance please contact your Willis Towers Watson representative or contact our Food and Drink Practice Leader, Sue Newton.
1 https://www.bbc.co.uk/news/business-57883332
2 https://www.statista.com/statistics/257080/new-installations-of-industrial-robots-worldwide-by-industry/
3 https://www.computing.co.uk/news/4034283/uk-government-boost-cyber-security-food-supply-chains
