Industry 4.0, the fourth industrial revolution, involves the use of smart technologies and data to improve manufacturing processes. It includes integrating advanced technologies such as the Internet of Things (IoT), artificial intelligence (AI), big data analytics, and automation to create more efficient, flexible, and responsive production systems. The goal of Industry 4.0 is to make factories and production lines smarter by connecting machines, systems, and humans in real time, leading to improved productivity, reduced costs, and better-quality products.
The consumer packaged goods (CPG) industry is in a position to leverage Industry 4.0 to drive growth, innovation, and competitiveness. Unfortunately, CPG plants are still lagging behind at a time, more than ever, it is paramount to modernize CPG plants.
A benchmarking study conducted by SmarterChains and sponsored by EY analyzed over 500 manufacturing professionals from 9 CPG sectors—food, beverage, fragrance, cosmetics, dairy, tobacco, confectionery, snacks, and personal care. Among them, only 10% of manufacturing plants are leveraging Industry 4.0 technologies at scale. The remaining 90% are still in pilot phases or struggling with investments that cannot be leveraged successfully.
Failing to adopt Industry 4.0 technologies can lead to significant competitive disadvantages. Companies that do not embrace these advancements may face higher operational costs, lower productivity, and slower response times to market changes. This reluctance to modernize CPG plants can result in decreased market share, as competitors who adopt these technologies can offer better-quality products at lower prices—with greater efficiency.
Why the Time to Invest Is Now
High Demand for Efficiency
The CPG industry faces intense competition and operates on thin margins. Industry 4.0 technologies can significantly enhance operational efficiency by optimizing production processes, improving resource utilization, reducing waste, and lowering costs. This efficiency gain is crucial for maintaining competitiveness and profitability in a highly competitive market.
With a diverse and often large workforce, the CPG industry can greatly benefit from technologies that enhance workforce productivity and safety. Industry 4.0 provides tools such as augmented reality (AR) for training, handheld devices for real-time data access, and digital work instructions, all of which improve skill sets, streamline workflows, and increase overall efficiency. Additionally, advanced scheduling systems and skills/qualification management tools ensure that the right employees are assigned to the right tasks, optimizing resource allocation and boosting productivity. Empowering the workforce with these technologies not only boosts productivity but also enhances job satisfaction and safety.
Complex Supply Chains & Demand Planning
CPG manufacturing deals with intricate, global supply chains that require precise coordination and flexibility. Technologies such as real-time tracking, advanced analytics, and automated supply chain management can improve visibility, responsiveness, and agility, helping to mitigate risks and adapt to disruptions swiftly. Additionally, labor demand planning solutions ensure that workforce levels align with production needs, optimizing resource allocation and minimizing costs at the point of scheduling.
Dynamic Consumer Preferences
The industry must continuously adapt to rapidly changing consumer preferences and trends. Industry 4.0 enables better data collection and analytics, allowing companies to understand consumer behavior more deeply and tailor products to meet evolving demands. This capability to quickly respond to market changes and innovate is vital for staying relevant and competitive.
Benchmark Study Highlights
Tech-Augmented Workforce
Technologies that enhance employees’ skills and optimize workflows significantly boost productivity and efficiency. It’s clear that “advanced plants”—those 10% that are leveraging Industry 4.0 capabilities across their operations at scale—are leading in this area. 60% of advanced plants use digitized work instructions across processes like production assembly and maintenance, while early plants are still in the exploration stage. Only 11% of early plants have adopted digitized work instructions.
Advanced plants widely use (80%) handheld devices such as smartphones and tablets for data visualization, reporting, and auditing. Early plants are putting more urgency on adopting this practice, with 31% reporting they manage data tasks on the go with handhelds.
Both AR and virtual reality (VR) are adopted at the same low level, even though these solutions improve workforce capabilities while minimizing training time. Just 20% of advanced plants leverage AR and VR technologies, while none (0%) of the early plants can even begin to integrate these technologies into their operations.
360˚ Factory Visibility
Combining data from various areas of the value chain—procurement, production, quality control, warehousing, logistics, sales and marketing, customer service, and all the employees that support each of these functions—improves decision-making and agility. Again, advanced plants lead in data visibility because they have the cutting-edge technology to provide real-time access.
Almost half (43%) of the advanced plants use remote and user-friendly interfaces for real-time information access, compared to 19% of early plants. Advanced plants also lead in cloud-based systems of record, such as enterprise resource planning (ERP) systems, with 50% adoption versus 20% in early plants. Although adoption is low for both types of plants, 20% of advanced plants have started using industrial IoT platforms to connect data from multiple systems to increase visibility, enhance decision-making, and modernize CPG plants—only 9% of early plants are.
Augment Your Workforce & Achieve Visibility With Indeavor
To drive and accelerate Industry 4.0 adoption, CPG manufacturers need to leverage advanced technologies to improve efficiency, flexibility, and responsiveness. While managing razor-thin margins, cost reduction is crucial to stay ahead of the competition. Embracing best-in-class tech not only enhances productivity but also ensures better resource utilization, driving significant cost savings.
Indeavor offers accurate labor scheduling automation alongside labor demand planning. This ensures that workforce levels align with production needs, optimize resource allocation, and minimize costs. Indeavor provides unparalleled visibility into all workforce- and supply chain-related data, ensuring that real-time information about your most valuable asset (your employees) is accessible for better decision-making. Always know who is working, when, and on what job… no matter how many times your on-site reality changes from your pre-planned schedule (e.g., call-outs, shift swaps, etc.).
With seamless integrations to connect to your ERP, HCM, and other enterprise architecture—including skill augmentation and continuous training solutions—Indeavor manages skills, certifications, and qualifications so that only qualified employees are assigned to each task. This not only boosts productivity but also enhances job satisfaction and safety, making the CPG industry more competitive and resilient.
