Is automation suitable for your business?

We’re excited to bring you our first-ever podcast series, Enabling Automation. This monthly podcast series will bring together industry leaders from across ATS Automation to discuss the latest industry trends, new innovations and more!

In part one of sixth episode, host Simon Drexler is joined by Jeremy Patten to discuss whether automation is suitable for your business.

What we discuss:

• Identifying which tasks to automate
• Primary drivers of ROIC
• Utilizing data to justify ROIC

Host: Simon Drexler, ATS Corporation (ATS Products Group)

Simon has been in the automation industry for approximately 15 years in a variety of roles, ranging from application engineering to business leadership, as well as serving several different industries and phases of the automation lifecycle.

Guest: Jeremy Patten, ATS Corporation (Products and Food Technology)

Jeremy Patten is the President of the Products and Food Technology business at ATS. His career has been focused on business leadership, lean manufacturing and process improvement and continuous improvement.

——Full Transcript of Enabling Automation: Episode 6——

 

SD: Welcome to episode 6 of the Enabling Automation podcast. Is automation suitable for your business? I’ll be your host, Simon Drexler. I’ve been fortunate to be part of the automation industry for about 15 years in progressive roles at a variety of different companies, both small and large. We’re very fortunate today to be joined by one of the executive members of the ATS group, Mr. Jeremy Patten. Jeremy, can you take a moment to introduce yourself to the listeners?

JP: Absolutely. Thanks, Simon. As mentioned, my name’s Jeremy Patten. I’m the president for ATS’ Products and Food Technology Group. So we’re focused on automation, enabling technologies in the products space, and then really bringing automation into the food and beverage market across a number of different verticals and industries. In my background, I’ve been with ATS a little more than five years. Prior to that, with IDEX Corporation, with Danaher Corporation really focused on business leadership and, and heavy emphasis on lean manufacturing and process improvement, continuous improvement.

SD: Thank you very much, Jeremy. And I think something that’s really interesting about the industries that you serve, especially in food and beverage, is when compared to some of the other industries in the market. They’re a little earlier in the automation journey. Is that a fair statement?

JP: I think without a doubt, as we’re talking and talking to customers and really understanding the challenges. Historically, it’s an industry that’s been able to leverage low cost labor. And so it’s it’s maybe been a little bit slower to adopt automation because the ROIC may be a little bit longer. But what we’re seeing more recently certainly over the COVID time period, is a shift where it’s about labor availability that’s really driving a significant push toward automation.

SD: That’s a great background for the topic of discussion today. And so why don’t we just jump right in? When you’re talking with those customers, you know, those types or others that you work with in your daily role, where do you start with them and helping them understand is automation suitable for their business?

JP: Yeah, it’s definitely a mix. I don’t think there’s an easy single answer on where to evaluate or how to look at automation. Clearly, we’re all still running for-profit businesses. There needs to be an ROIC. So where do you start looking, I think is where you have high labor concentricity because usually it’s the labor shortage issue is driving a lot of the conversations. So where do you end up using the most labor and then understanding those tasks, which of those tasks are repetitive in nature? You know, in general what we’ve really been able to leverage our expertise in automation as well as the PA Solutions group is to go in and look at where do you drive consistent processes because those are oftentimes the quickest path to ROIC and they can also be the quickest path to implementing automation, which then lowers the water level a little bit on the need for labor.

SD: Very key topic of conversation today, especially in today’s market around the world with the labor shortage. Coming back to the food space, we talked about repetitive and consistent operation. Is there differences in quality expectations in in handling food and something that’s going to be consumed by a human coming off of the production line?

JP: I think for sure there’s it’s a regulated environment, right? So I think already you’re in a different category of folks that can really provide those services at a technical level that’s going to meet the FDA

requirements and the cleanliness requirements, particularly when you’re touching food that’s going to be consumed. And so there is a technical aspect to it for sure. And then I’d say the other side that that maybe makes it challenging and maybe this is why it’s been a little less mature than other industries is you have a little bit higher variability, right? When you think of handling produce or handling, you know, goods that are grown and manufactured proteins or produce, you don’t get a consistent pork chop or pepper. And so you need to account for that variability, that natural variability in the products that you’re handling when you’re thinking about automating it.

 

SD: So Jeremy, coming back to the tasks then, repetitive and consistent, when you have natural variation with a lot of the products that that you deal with and the group of companies that you run deal with, how do you help to identify those repetitive and consistent tasks inside of an industry like that?

JP: So usually and where we’ve had the most success is starting with an automation maturity evaluation. So this is an area that we offer some folks that are really skilled in automation. But I say more importantly, they’re skilled in lean manufacturing. So that they can really walk in and evaluate the process itself to understand the true variation in the process. And the goal is really where can you find those tasks that are repetitive enough and that have a small enough variation window where it’s an obvious fit for automation? You can automate just about any process. It’s really more of can you get the return on that and can you get enough flexibility in that process that you can meet whatever your customer demand is? Because while I say you really want tasks that are repetitive, lower variation, we also know that the market dynamic requires high mix, a lot of different variables and variety of products that you have to deliver at the end.

SD: If we come to the industries that I’m more familiar with, the challenge is often high mix, low volume, and the race to do simulation or customization in the consumer market. And it seems like it’s a similar problem, similar but not the same in in the food space. And so when I’m working with customers and we’re talking about high mix, low volume opportunities, we’re trying to encourage flexible foundational technologies. We’re trying to standardize automation processes where you have quick change tooling or quick change programs for the inspection stations along the pathway of automation. Is that similar in the spaces that you serve or is it different?

JP: Oh, I think it’s absolutely similar. It’s looking at how- so if variability can be in the product or the process. And so you can have a lot of different product variability, but it’s a consistent process and just taking a food example, ready-made meals or ready-made salads, a lot of different varieties, but essentially same container size. You are adding components and different variables or different ingredients to your salad mixture. And the variability that you need to deal with is the quick change of what you’re putting in. But the process itself is consistent enough. It lends itself very well to automation. And so I think it’s a difference between looking at product variation versus process variation.

SD: I really liked what you said right from the very beginning, Jeremy, where, you know, we run for-profit businesses. It comes back to ROIC. To help our listeners connect ROIC to that variability of product or process when we apply automation to those types of applications, what are the primary drivers to drive the ROIC? Is it a consistency increase? Is it a throughput increase? Is it both? Is it something different?

JP: Yeah, I think at this point, the number one driver certainly around labor shortage. So the ability to produce more product, using less labor as an input both from not just inflation, you think of inflationary costs of labor costing more, but the actual availability of that labor was with a customer just a couple of months ago. They had over 62 job openings in a plant that has 180 positions. They advertised for those 62 job openings about three weeks to hold a job fair, two people showed up. And so when they’re coming to us, it’s it is clearly still about ROIC, but they don’t even have a business if we don’t find a way to help them automate more of their process because they don’t have folks to run the equipment to meet their customer needs and demands. And so I think labor reduction, without a doubt is the first. But now as we’re getting more and more into the digital space, really leveraging our PA Solutions, our Inimco capabilities, our Illuminate. We’re also seeing an incredible amount of savings around waste reduction and giveaway reduction in the food space. And when you think of it as a finite commodity, the food that you produce, maximizing the yield of that is incredibly important to turn profit. And through that digital journey that we’re on, we are really helping a lot of customers reduce their waste in giveaway, increasing the efficiency and throughput on the line in addition to using less labor. So I think that there’s a lot of different variables that are coming into play all around automation in the space that we’re able to see and really deliver to customers today.

SD: I’m so happy that you touched on that example because in the automation space, especially over the last five years, you’ve heard so much about Industry 4.0 and the race to 4.0 and the data that’s required. And you tied it back to a very tangible example where the data actually helps justify the ROIC of equipment upon implementation. It can be part of the business case in a very tangible and meaningful way, and that’s a nice translation of a very abstract concept in Industry 4.0 to something tangible that that you’ve actually seen happen.

JP: Yea, and I think, you know, MARCO, which is a small scale based company, check weighing company that we have within ATS products and food, they’re really a great example of that, of driving productivity into the process. So by leveraging their skill set around what to do with the data, how to analyze the data, and really how to maximize throughput on a, on a packaging, fresh produce or convenience food packaging line. They’re really driving productivity savings that are tangible and that we can go back and show and share with the customers both upfront and helping them make their buying decision. But even more importantly, throughout the lifecycle of that project, that program, we can really show them tangible savings and how quick the payback is on the equipment itself.

SD: And so to build that latter part out for the listeners a little bit more, it’s not only the data at the beginning and access to data to help you drive your ROIC, it’s the data that comes off of the machine once it’s in place that helps drive more effective process. Is that correct?

JP: Yeah, without a doubt. I think, you know, when you look at OEE tracking and really understand uptime and efficiency of a line and that line could be single pieces of equipment, it could be an integrated line of machines and equipment. At the end, what does that customer care about? What is the true throughput that they’re getting? And is it better or worse than it was before? You know, and that data tracking also allows us to get better over time. And so it’s the enablement of that continuous improvement journey on the equipment, the asset that we don’t stop when we sell it. That’s not the best it will ever be. We can continue to improve it over time to really maximize that asset for the customer. And we’re seeing the need to do that because of the, you know, some of the more I’ll say macro drivers, climate change being one of them, we’re actually seeing the consistency of produce change. Tomatoes is ia great example and because of the global droughts, CFT is a leader in the tomato processing and packaging space globally. They’re actually seeing that the process flow a little bit differently, right? The brix level or viscosity level of the tomatoes coming in is significantly different and changing over time. And with our high-tech vision company, they can actually show that data and share that back to the process of how are the tomatoes changing and how do we need to tweak and adjust the process then to really maximize the output for the customer. And so it’s not a matter of selling a one time line, but it’s helping the customer maximize yield throughout the lifecycle of this major capital equipment purchase for them.

SD: That’s such an interesting problem that I never would have thought of working in the industries that I do. You’re dealing with more variation just even based on weather patterns and that would cause challenges for automation and technology implementation. So one of the things that’s so interesting about doing this podcast and being able to talk to different experts from different industries is it’s just such a neat thing to learn.

JP: Yeah, well, and I think within the produce space, you got to really consider the seasonality of the product that you’re dealing with. The tomato season is 90 days. And so how critical is uptime when your entire production of primary processing of tomatoes is a 90 day period? One day of downtime would be the equivalent of weeks in other industries, and so you start to think about serviceability, uptime, throughput, absolutely critical when you only have 90 days and that’s, you know, you have different growing seasons, timing of all different sorts of produce. But this is where our food comes from and how critical it is to be right there, right now because that fruit isn’t going to wait, and it needs to be processed at the right time in order for you to get your products out at the end of the day.

SD: I’m going to take us in a slightly different direction. Coming back to the overall question and theme of today, is automation suitable for your business? So you deal with a lot of different types of customers and companies. What do you say to someone who knows that they have an ROIC for automation? They’re likely challenged with labor shortage. They know they need to implement technology, but they have a hesitation. They say, you know, they’re concerned about supporting the equipment or being able to run and maintain it once it’s inside of their facility. What advice would you give them?

JP: I think we’ve covered some of the first piece and that’s try to understand the best places to focus your automation efforts, things that are going to maximize ROIC or defining what problem you need to solve, whether that’s labor reduction, waste reduction. There should be a problem statement of something you’re trying to solve for the business. To me that the next step is as you’re starting to look for a partner, really take the time to look for someone that isn’t building complexity into the process. And so we see certainly a lot of different automation partners in the market that can create, and again, I mentioned earlier, we can automate anything, but they can automate to a point of complexity that you need to essentially hire an entire automation team to run it, to modify it, to maintain it. And it really defeats the purpose of what you were trying to do for your business in the first place. And so how do you drive automation, leverage all this great technology we have, but do it in a way that’s simple enough to maintain and operate at your facility with the skill sets and folks that you have inside of the business. And I think a big part of that is really understanding who you’re partnering with and what their philosophy is around automation.

SD: I think that’s a great way to finish off for today, Jeremy. That’s great advice to the listener base for how you both understand is automation suitable for you and how to get started, where to focus? So I’ll start by saying thank you very much for participating in this conversation today. It’s been very nice to have you. And then secondly, is there any closing thoughts that you’d like to leave our listeners with?

JP: First off, thanks, Simon. Appreciate the opportunity to talk about, you know, automation and just maybe a little bit specific around my industries on the podcast. So really helpful and have enjoyed the podcast so far. In terms of closing thoughts, I really think it’s around, you know, focusing on the problem that you’re trying to solve and really leverage some of those experts. And certainly a last minute pitch would be I think we offer a lot of that capability inside of the ATS family, where it’s everything from automation, maturity assessments to really helping you find and solve the right problems through automation in a way that’s going to be able to be maintained and more importantly, to improve over time to really maximize the ROIC that you get from your project. So appreciate really everybody that’s been so open, you know, in discussing their problems, their challenges, their opportunities with us as a business because that’s really helped us refine what we offer and how we structure our businesses and our go to market to make sure that we’re adding the most value to customers.

SD: Thank you very much, Jeremy. To the listeners today, thank you for joining us. I sincerely hope that this discussion helped you in your automation journey and better understanding how you can evaluate. Is automation suitable for your business? If today was helpful for you, I would highly encourage you to join us next time for our seventh episode, which is what resources are required for automation. And so that discussion is really around once you have the automation in your site, what do you actually need to support it? We talk about that with Adam Pringle. Thank you very much for joining us today and I look forward to connecting with you next time.