Traceability a growing trend for process manufacturing
Traceability is growing in importance. In the next few years, we will see a significant increase of its use in process manufacturing as companies collect transactional data and explore Internet of Things (IoT) to increase traceability.
The IoT is still relatively new to process manufacturing, so things aren’t going to happen overnight. This year (2016) will be another year for businesses to watch and learn. There are companies out there that are leading the charge, particularly in the pharmaceutical industry, which needs to prepare for the European Union Falsified Medicines Directive that is expected to go live in 2018. The technologies that will enable pharmaceutical companies to meet this directive are crucial, particularly around traceability, and 2016 will be the year that those companies study and acquire these technologies to ensure that they can be rolled out across the global supply chain in time.
The collection of data via sensors and scales is not new to the process industry-in fact, companies that run asset-intensive processes on a large scale have been doing so for decades. But, historically, this ability to collect data has come with a big price tag. The IoT heralds a new age for an increased level of traceability, one that is no longer the realm of larger companies but opens the door for smaller businesses. Now, everything has some sort of sensor and can be traced, from pallets to forklift trucks to storage locations. Roughly 25% of our customers are collecting transactional data today. I predict that this number will increase to around 80% in the next five years due to the increase in available technology and a decreased entry initial cost.
The robot revolution
Smart machines—or robots, as they’re more commonly known—are working their way into the process industry and expected to perform many routine tasks in manufacturing and warehousing. Gartner predicts that by 2018, 50% of the fastest-growing companies will have fewer employees than smart machines.
I’m not just talking about the machines that you see building cars in advertisements. I’m talking about smart machines that are highly autonomous and able to make their own decisions. For example, a robot that picks customer orders will decide on the most efficient route and make product-allocation priorities in case of a shortage. These decisions now are carried out by humans, often based on a recommendation from the warehouse management system or enterprise resource planning (ERP) system.
Companies are already starting to experiment with smart machines, and we will see wider adoption in 2016. This will lead to changes in ERP solutions as well: interfaces will change, and ERP systems will need to deal with more transactional data. Above all, the systems will provide the information necessary to make decisions, rather than making the decisions within the ERP. With adoption continuing to grow, 2016 will be a year where process manufacturers increase their investment in smart machines to achieve efficiencies. However, the complexity of supply chains and manufacturing processes mean that widespread adoption across the value chain will take longer than 12 months.
Customers also will demand high-level product traceability in a growing number of industries. I have a particular interest in the rise of adoption of platform-as-a-service cloud computing to manage the data produced by traceability. By this, I mean providing consumers with the ability to scan the barcode on their sirloin steak at the supermarket to track its journey from the farm to the supermarket shelf.
This is only possible through traceability in the supply chain-from the manufacturer who registers the goods that are then picked up by the transport company that can log weight, miles driven, and even the temperature of the vehicle, to the shop that registers arrival, and so on.
This level of traceability is becoming increasingly important for food manufacturers for who brand reliability is absolutely crucial. Ever since the well-known horsemeat scandal that impacted the food industry a few years ago, these companies will do everything to ensure that the product they sell is absolutely perfect. Widespread rollout of this level of traceability is still a little ways off, but companies still will need to spend 2016 putting a strategy in place to prepare for deployment of this technology.
Jakob Björklund is industry director for process manufacturing at IFS.