Automated technology can offer a major boost to manufacturing efficiency, but it leaves CPGs pinched on where to put it.
That’s according to PMMI Business Intelligence’s 2023 report “Packaging and Automation in the Warehouses of the Future.” Among CPGs surveyed for the report, the biggest roadblocks from investing in new automation were difficulties relating to available space and layout, impacting over half (55%) of respondents’ automation investment decision-making.
Many CPGs, particularly those based in the Northeast, still use warehouse facilities built decades ago that weren’t designed with large-scale automation in mind.
“Some plants are close to 100 years old; they weren’t designed with modern-day warehouse flow in mind,” explains one CPG representative interviewee.
For many, the problem is the small size of warehouses. But there are other issues, including uneven flooring, which rule out the use of mobile robots.
Once these warehouses are at capacity, CPGs must look at either investing in new warehouse space (which can have high costs if the company is based near an urban area) or by leveraging the use of third-party logistics (3PL) companies and using their available warehousing space.
“We are in our own plant sites […] some of them have been there for 60 years, so floor systems, floor structures, transitions between levels add to the complexity,” a CPG executive says about their company’s hesitancy on automation. “And even how we currently make use of the space we have and where we have packaging laid out versus what it ought to be. In other words, we may need to reinvent how we use warehousing and how we flow product through warehousing.”
Pandemic-Era Decisions Hinder Warehouse Automation Efforts
Additionally, some CPGs used their warehouse space during the COVID pandemic for their packaging operation to keep up with their expansion, which has now created floor space problems.
“The easiest short-term model was to steal a warehouse space and put processing and packaging systems in the warehouse,” explains an interviewee from a mid-size CPG. “Now that’s created bottlenecks from an internal warehouse storage perspective, which has created the demand to build new warehouses downstream, which everybody seems to be doing right now.”
Source: PMMI Business Intelligence, 2023 Packaging and Automation in the Warehouses of the Future
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