The Consumer Packaged Goods Industry Sets its Sights on Digital Manufacturing

Across industries, organizations are moving towards digital fluency and putting innovative technologies at the heart of their business models. The growing impact of the Intelligent Industry signifies that while we have entered the aftermath of the pandemic, the acceleration and changes that occurred as a result will leave a lasting mark.  

This is especially true in the CPG industry, which has experienced significant disruption in recent years. In fact, research shows that 90% of organizations say that growth in the volume of online purchases will impact them, and CPG enterprises are putting efficiency and cost optimization at the top of their list in order to support these new business models. 

The need for CPG companies to accelerate their time-to-market and deliver products to their customers at an even faster rate has triggered the growth of digital manufacturing. This is because digital manufacturing accelerates time-to-market, provides increased visibility into operations, reduces overall costs and labor turnover, and pushes sustainability goals.  

CPG enterprises building roadmaps for digital engineering should be aware of the potential benefits and map out a good starting place for their journey.  

Build Your Digital Manufacturing Strategy  

Before an organization can integrate digital engineering into their business model, there are several factors that must be considered, including:  

• Number of sites: How many sites must be integrated with new technology, and where are they located? This is an essential consideration, because it may be easier to execute initiatives in one location versus another.  
• Digital maturity of each site: What is the starting point today, and where do each of these sites need to go? Understanding the existing level of digital fluency – and what advancements are necessary – will be crucial to inform the digital manufacturing strategy.  
• Industry use cases: What are these sites trying to accomplish? For example, in Southeast Asia, the ability to speed up time-to-market may be more prominent than in other geographies, and so the digital manufacturing strategy may be more geared towards streamlining manufacturing processes.  
• Program initiative: Once the goals are determined, what is the overall business appetite, how will it be constructed, and what is the needed capital investment? Enterprises need to obtain meaningful insights into how they can establish digital maturity in a feasible and scalable way. Strong business planning and evaluation of financials is key.  

Beyond these factors, the most important aspect to consider is the technical capability of your organization. These digital manufacturing sites will be built on innovative technology – IoT, edge/machine learning (ML), digital twins, and beyond. Once CPG organizations deploy these solutions, they will begin to see immediate business benefits, because these systems provide process control capabilities beyond what’s possible with typical industrial control systems. All businesses should start their transformation by assessing the digital readiness of the OT/NT/IT capabilities at their production sites and identifying business, technology, and engineering capability gaps to build an overall IT/OT convergence program. 

From there, these companies can build towards digital twins from an operations perspective – linking the model to product development and portfolios. With digital twins, real-world data will flow back into the model, which developers and experts can interact with to determine the most effective ways to scale up product development, improve testing, quality control and design, and beyond.  

Prior to digital engineering, many businesses had visibility at site level. Once undergoing digital transformation, this visibility extends to enterprise-wide – and it is all enabled by IoT and edge.  

Benefits of Digital Manufacturing on the CPG Industry 

From a CPG perspective, product quality is the most significant benefit associated with digital engineering. The ability to deploy newer technologies results in much better control over the production process – and enables better, faster, and more efficient control systems. By investing in digital manufacturing, enterprises will access new techniques and adhere to tighter specifications in their research and development (R&D) process, leading to more autonomous operations and tighter IT/OT processes.  

Reliability is another key benefit. Once organizations obtain visibility into their production operations, they can better plan for maintenance and execute higher order use cases such as predictive quality and cost reduction. This increased visibility allows leaders to understand exactly where their revenue is being spent and pushes them to optimize their overall spend.  

Additionally, digital manufacturing is a great way for businesses to put their sustainability goals in focus. CPG organizations tend to undergo continuous manufacturing for their products, which results in a significant amount of waste. As a result, once a newer model or product line comes on the market, these companies must often spend a fortune recycling waste, selling it on a secondary market, or trashing it completely – causing significant emissions. With digital manufacturing, downtime, production waste, and scrap are all reduced, benefiting both the organization and the environment.  

Visibility into production applications can also drive sustainability goals, as it provides a more holistic view of raw materials and shipments. With digital manufacturing, additional insights may show how raw materials pushed into scrap can be processed differently so that they may still be used and will not impact the end product and are still in line with the necessary product specifications. These insights can help CPG organizations learn more from their production data to accept a shipment that may be slightly out of specifications without impacting their final product quality.  

For many organizations, the convergence of physical and digital can be a daunting thought. As workforces, processes, and industries become increasingly digital-first, remaining in the dark ages of technology is no longer an option.  

Digital engineering is a major investment, but if enterprises develop a comprehensive, airtight strategy, they can reap the benefits and become more resilient.  

—Amar Phadke, Chief Technology Officer, Consumer Products, Retail, Services and Public Sector, Capgemini Engineering