90% of CPG manufacturers yet to leverage digital at scale

Posted on 6 May 2020 by Jonny Williamson

Pioneering research into the digital capabilities of consumer packaged goods (CPG) companies has been launched, benchmarking key areas of strength and opportunity within the sector’s adoption of advanced technologies.

The Covid-19 outbreak has highlighted that many manufacturers have limited resilience, with fragile supply chains and often insufficient agility.

There is a clear need to help manufacturers and supply chain professionals to accelerate their digital transformations, adopt new technologies, drive automation and data exchange, and unlock greater value for stakeholders.

In doing so, organisations can drive throughput delivery, accelerate their recovery, level up their capabilities and performance, and become more resilient to unexpected disruptions.

The ‘Consumer Packaged Goods Industry:‘Factory of the Future Benchmarking Study’, published by SmarterChains and sponsored by EY, aims to help leaders prepare, define and execute their digital transformations.

Using an innovative new methodology drawing on 336,000 data point encompassing 50 plants , 327 production lines, 19,312 SKUs and 50 evolving technologies, the study spans digital, automation, organisation and leadership capabilities.

The 10 Factory of the Future dimensions:

The 10 Factory of the Future dimensions - SmarterChains

Image courtesy of SmarterChains

The headline finding was that 90% of participating companies – all of which are significant players with the CPG sector – are yet to leverage digital technologies at scale.

Other key insights:

  • Advanced plants distinguish themselves through their Factory of the Future leadership  and digital organisation. These enabling dimensions are key to fostering an environment in which Industry 4.0 can flourish. Early plants understand the importance of these dimensions but are still under-investing in them.
  • The automated material flow and tech-augmented workforce  offer significant opportunities for advanced and early plants alike. These dimensions showed the worst scores for both advanced and early plants.
  • 360˚ factory visibility systems and automated data flow are relatively mature areas for advanced and early plants. Both early and advanced plants have some of their highest average scores in these dimensions.
  • Production and quality are areas in which early plants use a combination of conventional technologies and manual labor, while advanced plants are adopting new technologies at a slower pace compared with other dimensions.
  • While for the maintenance dimension advanced plants have set the path and early plants are struggling to follow; for the infrastructure dimension there is a smaller, yet still significant, difference compared with other dimensions between advanced plants and early plants.

Fabian Wehren, EY EMEIA smart factory leader, commented: “The research conducted by SmarterChains finds that even though a fourth of the factories surveyed have digital-ready infrastructure in place, only 2% are effectively using tech-augmented workforce or automated material flow.

“The research provides clear and objective measurement of Industry 4.0 capabilities for the CPG sector, which will help companies navigate disruption in the months and years ahead.”

To discover more data-driven insights about Industry 4.0 in the CPG industry, check out the interactive website, where you can also download the full study.

*Header image courtesy of Depositphotos