Are Food Manufacturers Too Slow in Adopting New Technology?
In the past few years, companies have developed many technologies that greatly increase efficiency and productivity in the manufacturing industry. The advent of automation, robotics, artificial intelligence and IoT are changing the way that manufacturers are producing their goods.
For the food manufacturing industry, reaping the benefits that new technologies provide may not be as simple. Obviously, the image of long lines of factory workers performing tasks manually is quickly becoming a thing of the past. However, many food manufacturers are still quite a long way from maximizing the new technology and equipment available to them. According to a report done by Microsoft and the Harvard Business Review, “manufacturing companies are the least likely to have taken steps towards digital transformation.” Naturally, this includes the food manufacturing companies.
One would think that with the benefits these new technologies bring, a food manufacturing company would quickly jump onboard. This especially goes for companies that want to be competitive and push for growth in the long term. However, this isn’t the case and here are just a few reasons why:
Companies Wait for Standards
One of the biggest drivers of change, especially in regulated industries, is standardization. Some companies are wary of shifting their processes and equipment without knowing whether it will follow any future regulations. These regulations may or may not be a problem, but the uncertainty of it all makes it difficult to commit. Companies don’t want to risk having to roll-back to older technologies because newer ones are not compliant with specific regulations. Once standards are put in place for new equipment and technology, companies are more willing to shift their business processes.
Not to mention, shifting to new technologies often involves significant initial investments. New technologies are costly, even though they will promise a better rate of return in the future. Some companies are not ready to adopt new technologies with such a significant initial investment. This is particularly true for smaller businesses. New equipment and systems may be affordable for mid-to-large-sized companies but are huge investments for the smaller ones. Some may even be too expensive for the smallest food manufacturers, which easily can cut them out of the competition. Even for the bigger businesses, adopting new technology can be costly. Aside from the initial investment, it may have huge effects on their production which may significantly affect their bottom line.
Companies Avoid Digital Disruption
Shifting to new technologies means changes in workflow and processes. This transition can take up time and there is often a slight dip in efficiency. Efficiency especially takes a hit if the new technology and equipment require training the employees to use it correctly. If a company is not willing to take on the disruption in efficiency and productivity, then the company’s management would usually delay the use of new technology. This is particularly true for bigger companies where any change may have a domino effect on the whole production process. Adopting new technology is not a decision made lightly, as it affects a significant number of employees.
Companies Do Not Fully Understand the Benefits That a New Technology May Bring
Unfortunately, some manufacturers have low technological awareness. This is usually the case with small businesses that do not have a separate department dedicated to staying up-to-date with new technology in the industry. Some business owners are not aware of new equipment and technology, especially if the technology uses purely digital marketing to promote itself. Also, other business owners may be aware of the technology but do not understand how it benefits their business. The effect is the same – there is a significant delay in adopting new technology. Most of the time, these companies only get to enjoy the benefits of new technology once other companies in the industry have shifted to using it.
Companies Wait for Others to Try Out the New Technology
Not surprisingly, many business owners and company decision-makers do not want their business to be guinea pigs for new technology and equipment. They prefer to wait for others’ experience in using and shifting to the new technology. Then, they subject their business processes to the transition, allowing for minimal workflow disruption. This strategy will often seem reasonable especially if the new technology turns out to be more hype, ultimately failing to live up to its proposed benefits.
If the new technology turns out to be worthless, letting other companies try it out first prevents any damage. This strategy saves companies from the unnecessary costs and disruption that shifting to a new technology brings. On the other hand, if the new technology turns out to be a success and fulfills its promised benefits, letting other companies try it out first is equally beneficial. It allows the late-adopters to learn from others’ experience in shifting to the new technology, making the transition easier.
Author Bio: Rana Tarakji is a contributor at PDF Electric & Supply, an automation supplier with corporate office located in Cary, North Carolina.
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