Food Manufacturing Industry more Digital than Ever Before

by Maria Birger

2020 was one of the most business challenging years for many companies all around the world. Hardships instigated by the global pandemic, fuling many economic struggles for many companies and industries. Many businesses big and small suffered irreparable damages. 

However, a slim margin of industries seemingly did better than others. Another group of businesses felt the blow, but demonstrated great resilience, and came out of this year standing stronger than ever before.

Tizbi’s goal is to draw attention to these companies, and propose a potential reason for these successes. We believe in the role of advanced technology and a willingness to embrace technological solutions.

 

The Head of Business Development, VN  of the Bühler group, Paul McKeithan, sat down with Tizbi’s CIO, Alexander Birger. Bühler is a multi-billion dollar, equipment manufacturing company, with deep roots in food manufacturing. This company has embraced digital transformation, and condones the belief that technology can connect people and companies. 

The interview transcribed below covered topics including:

An introduction to the Bühler group

Alexander: So, Hey, I want to say thank you for your time today, and it's good to see you, Paul. It's been a while since we last connected. 

 I’ll try to be short here. We are making a podcast series. We’re interviewing digital heroes, digital leaders, and I'm trying to coin the term “digital comeback”. The concept I'm trying to bring through the interviews here is connectivity.

How digital is a company and how digitally minded was the leadership with the strength of the comeback after the crisis?

I'm thinking that it may be correlated and we're kind of studying this digital mindedness and digital direction of the company and how leadership is linked to that. 

First of all, how deep or shallow was a crisis for the company, how strong is the company doing now? And most importantly, what will be the future position of the company. 

We're thinking that digitally minded companies can take a better position in the marketplace after the crisis. I think the metric to measure is digital mindedness, digital detection. And I know Bühler and you and your colleagues are very digitally oriented.

Maybe you can lead the conversation with a little bit about you, and then a little bit about Bühler?

Paul: Short overview. Okay, sure. I'd be happy to. I think the first thing I like to say when I tell people about myself: I'm not, I'm not a digital native at all. 

I mean, I have a mechanical engineering degree. I worked as a thermal processing engineer and then I’ve spent a lot of my career in the sales area, focusing primarily in equipment space and manufacturing, in food feed, industrial type manufacturing space. 

So the idea of digital connectivity is new to me. So I've always thought that if somehow I can get it, anybody can get it. So I think that's one of the reasons I bring the perspective that digital is not about technology.

Digital is about the idea of: did a tool allow us to connect with people. 

It allows people to connect with technology. It allows a greater conversation around very interesting technology. I think that's the key for me is that we've moved on top of brilliant automation developments and things of that nature we've made that communicate with non-technical people.

Really that's what we talk about with digital transformation. We're dragging an entire society into a technical world, and we're not asking them to all be technical people. We're just asking them to engage.

And that leads me to introduce Bühler. I mean, that’s not a digital company. We are an equipment manufacturing company that has learned to behave digitally. So we're using digital connectivity to be better at what we're good at. 

And I think that's the key. We're not trying to be something we're not, we're bringing digital solutions and things to the mix, but primarily we're focused on playing in the areas that differentiate us playing in the areas that we are strong in. 

Buehler's a 170 year old company with deep roots in food manufacturing. We touched all types of food. Over 60% of the world's grain goes through our equipment. 70% of the world's rice goes through our equipment. Almost 70% of the world's chocolate goes through our equipment.

We sell machines for engine blocks and the automotive industry, we code glass for glass buildings and things of that nature. So, we touch a lot of products that people touch every day. From the lipstick someone may put on in the morning, to the coffee they drink.

And we didn't lose that when we started being digital. What we did was try to enhance our “digital comeback”. 

I've tried to bring more emphasis to “digital relationship”, because if I can have that intimacy with somebody or intimacy with another company, because of the tool of digital, then I create a more intimate relationship. And I think that's what we're trying to do with our customers.

 

 

Alexander: Wonderful, beautifully said Paul. I always appreciate your look at digital relationships as a key in the strategy and thank you for adding the Bühler perspective. 

So, a food manufacturing company, not quite digital by concept and pretty old company. And without being modest, you probably can say how big Bühler is?

Paul: Right. I think a way to sum that up, if you just want to get a feel for Bühler. We're a multi-billion dollar company, with offices in 140 countries in the world, and play with the largest manufacturers around the globe.

Alexander: Yeah. Perfect. So, what brings me to you is my knowledge of your role in the digitization and digital transformation for Bühler and creating those digital relationships on multiple levels inside and outside of the company. 

And maybe you can do an overview of that project, and updates on that?

Paul: Absolutely. So, you know with every journey you have to start with her first step. And I think one of the things that if you come into a very traditional type company, we talk about digitalization in the manufacturing space and Bühler is kind of unique.

You talk about B2B and where we sit, we're a manufacturer ourselves, we manufacture machines. When we think about serving the manufacturing space in a digital capacity, we're actually thinking about our customers because our customers are manufacturers.

Many of those would almost fall into the term processors because you look at the large food companies around the world, they're either processing or manufacturing something.

So, we had to embrace a digital transformation from two directions, our own digital transformation as a manufacturer. And also how do we serve our customers who are manufacturers? And that's a very interesting thing. 

So, each journey starts with the first step. And our first step, we did what most people would do. We have machines that we manufactured and made them smart. Whatever that means. I don't know what it means, but let's make them smart. 

We realized very quickly that it wasn't about that. And what helped us realize it was that we have a very powerful mission and that's to reduce energy by 50%, reduce waste by 50%, and reduce water usage by 50%. 

Those are our goals that I would say are even bigger than ourselves. I think that was a key thing to create a mission that is bigger than what we can accomplish alone. And to me, that drives collaboration and it drives partnerships. And I believe digital is what makes partnerships and collaboration more than just lip service.

There's nothing quite like the communication frequency that a digital connectivity has that creates true communication.

I like to tell a simple story. I think I've used this example before you may have heard it. I link [digital connectivity] to a marriage. If you have two people, and they only talk once a month, their relationship can only be so deep.

 But if those two people move in with each other and talk about: when you want a cup of coffee, or what's for dinner, or who's going to go pick up the kids, and so on and so forth.

It allows for a frequency of communication that gives a deeper relationship in the business world or manufacturing space, you have to get the frequency of communication to an operational level. 

So, if we have digital connectivity, then as a partner, Bühler can actually see our customer’s manufacturing. We can see when they had a bad time at 10 o'clock in the morning, we know when they had this. And then we see their problems. They see our problems. There's truly transparency. 

We talk about open source data, you know but, how about open transparency? 

Let's talk about open transparency. And what I mean by open transparency is, is not transparency in the walls of your own company, but transparency to their partners. So, you're actually getting your data, your dirty laundry off premise, and that's when we can have partnerships.

So, to bring that back full circle. I think starting a mission requires partnership, and leveraging digital connectivity to make the partnership actually work. I think those are all really key things to how we've approached this.

We're a company of about 12,000 employees. So you get this one customer, two consumers that have a co-creation workshop with you, sit down, you figure out what their problems are. You find a way to bring value to them and you build on that relationship.

And then you also take the effort to communicate that success story throughout your entire company, internally, as well as externally. Because the key there is that it's going to change people's jobs. 

If our expertise still lies in the company, we still have that expertise. We still need the same people. We don't need different people, but the way those people work might look a little different than the way they worked last month or last year or 10 years ago, or 20 years ago. 

So that's something you had to take care of. The people are people, and they're going to be concerned about their job and things of that nature. But if you have the idea that you're still doing what you do, we still need our people. We just need them to do it differently. Absolutely.

How Bühler fared through the crisis?

Alexander: Okay. Thank you. That's very deep. Now, I guess I'm going to switch to the comeback part of it. 

So I'm going to ask you this question: probably all companies have sensed some kind of depression in the time of the pandemic.

How did Bühler do specifically during the pandemic year and how did it hit? What did you feel on the negative side?

Paul: Yeah, that's a good question and I can be open and transparent.

Because of the industries that we serve, the pandemic created a shift, if you will, more people at home, more people eating out of their own pantries and the grocery store. That drives people to eat the type of food that we process as opposed to eating in a restaurant. That's not being processed on our equipment. 

So, from that point of view, it drove a real increase in business towards us. So that's the positive part. 

The negative side is how do we manage that with people all of a sudden working in a completely different way. People are no longer in the office, our manufacturing teams had to work under unique conditions to say the least.

So how do we manage our lead times, our customers and take care of our customers who are having to shift their supply chain. The supply chain was going through a dramatic shift. 

So I think in this particular case, it was a manufacturing issue for us. How do we accomplish this and deliver? We were fortunate that we were in a particular segment where the business was good, and challenged to actually deliver what we promised.

Alexander: Very good. So, I’m assuming that you might be now in the recovery phase.

I should tell you that some people I’ve talked to said, ‘we did better during the pandemic year than before, and now we are doing even better.’ I mean, some people have had crazy success, but not in all industries and not in all sectors. So, I don't assume anything, but I just wanna ask if there is a recovery visible right now inside?

Paul: Yeah, absolutely. Well, I would like to take an external view because, from the Bühler view we're a very traditional company. 

We like to say we're digital, but just because we have this mindset of trying to serve our customers in a digital way. However, in our own house we maybe don't behave as digital as we probably preach that we do. 

I think [the pandemic] pushed us to do that. I think that we actually started to use that term again, to practice what we preach. You know, we say that our customers should be digital. Then we forget to be digital ourselves. Now we're having meetings online and video calls and things of that nature.

We've learned a new way to work and coordinate with each other. There's a challenge there. Of course we, like many companies, we're in the phase right now where we're trying to find the right balance of making sure the collaboration that you get when you're face-to-face with somebody still there. 

Also making sure that what we're doing is not only new, but it's also working. We're actually being efficient working from home. We're actually getting things done. But we also miss each other and we also miss some of that collaboration. So I think we're in a phase, we're trying to find the right balance as we enter back into the workplace in a more traditional open space. 

 

 

So I think what we'll never leave is that we are now behaving more digitally than we ever have, and I don't think that'll ever go backwards.

I talked about our conversation with the customers. I don't have data to support this, unfortunately, but my feeling is a larger percentage of them are now saying, yes, I want to connect. Yes. I'm willing to share data.

[Food manufacturing] is a very traditional space to be in. This industry has been around since the turn of time. 

So they're very traditional. They're also secretive. I mean, we all think about secret recipes, you know, they're all very secretive. 

That was one of our biggest hurdles was entering into the digital space with them. “Are we willing to share data with each other?” And after this pandemic, that conversation has changed drastically. Our customers are showing a greater deal of openness to share data.

The role of digitalization in food manufacturing

Alexander: Wonderful. So I remember from the stories told by [Bühler], visualizing a river of French fries going through one of your machines and if you overheat it just 2% then they become too dry. You lose a lot of the product. Then you under heat it, and it just has a chance of being too moist and creates the infections. 

So you have to be precise on these machines and the moment you are imprecise, you're losing half of the french fries, a few millions of tons of french fries, just on the adjustments and how fast you are responding to these changes was a critical part. 

It requires your customers to think digitally from the traditional industry. Because if you're non-digital, you're just losing weight. 

So, where I'm going with this right now. I remember that part of what you offered and your idea was to create the digital service, which you will sell together with a machine, then when somebody buys a machine, they also have a choice to buy a service. 

This digital service will provide them this variable on time, real time information on top of the product river, which can be benefited from in massive ways. And this all happened before the pandemic. You've invented this before it started.

I can only guess that those customers who bought this service and who benefit from it should have found themselves in the position of strength when the situation on the market started changing.

Paul: Absolutely, well remembered and well said. I mean, our customers are, you know, they're walking a fine line and balancing that between a very strict process control. 

Although our digital connectivity is not controlling the machines because you don't want to control from the cloud, you still want to control on premises. But what we're doing is providing a view around the entire operation and that view gives our customers the ability to make better decisions. 

We're not taking the people out of it. We're allowing those operators to make better and more consistent decisions.

Uh, I think if you look at our customers in the operation log, they've gotten the low hanging fruit. They know how to get better energy savings. They know how to have tight moisture, but maybe not every day, 24 hours a day, every minute, right.

It's trying to keep that level of operation consistently tight to the tolerances. Those customers who had connected before the pandemic also had the advantage of still being connected to our process. 

Other customers were struggling to fly process engineers to different countries, and technicians to different plants and facilities with COVID constrictions. 

Well, these customers who are connected, we were still fully engaged with them. They were still getting the benefits of some of the process knowledge. There's no doubt that there is an advantage to having that partnership, to allow that consistency to continue. 

I have several examples. One customer was even able to continue with commissioning remotes. But we were all connected and able to do it. We had never done that before, but it worked. So that was really cool.

The future of the food manufacturing industry

Alexander: So these are the stories that give me adrenaline. I almost want to encourage you to ask your customers this question: what would happen if you didn’t buy this service from us? How would you survive without it?

Paul: Well, you know,  it's not that they couldn't run without it. You know, they've been making these foods for many, many years without the digital. They did it before digital was there. 

But we're in a different marketplace. For example, I know of customers who have earned contracts with other customers based on their carbon footprint, right. 

20 years ago that would've been a contract deal breaker. But now, the carbon footprint is in this contract, their carbon footprint. How do they prove a carbon footprint? Data transparency, digital connectivity. 

So, yeah. They have to have that connectivity to prove the contract. So even the digital piece becomes part of the proof, becomes part of the contract, is part of the thing. Another example is in the nut industry. 

Nut industry's very stringent on salmonella. And, you know, we have to protect people. And one of our digital solutions is a log up to reduction of salmonella in peanuts.

Well, the digital part: it's shared in the cloud in a way that's transparent. It's also recordable by the FDA. That's how they operate now. So during a pandemic that just becomes more difficult and you start losing the ability to behave the way we are now. It's like rewinding the clock.

Someone says, I'm going to produce like we produced in the nineties, and someone else says they’re going to produce like they produce in 2021. And well, guess who's going to get more customers? Who's going to sell the product better? Who's going to get the contract?

Alexander: Thanks for specifying that clearly. So now do you have any digital technologies or any digital ideas about technology which will help build or deliver customers to outperform the average market in the future? 

Paul: That's a great question. You always put me in a tough spot because I've already professed and I'm not a digital native.

No, I haven't. I'll speak in my space with the food space. What's coming is traceability. And I'll tell you that right now, we're at the point where we all know what's coming and the consumer market's not pushing yet. 

It's not very long before you and I, as a consumer will walk into a grocery store and say, I'm going to make the decision to buy this organic lettuce versus this organic lettuce based on the fact that this one has a lower carbon footprint.

There will be a point where you and I will not just trust the grocery stores that all of this is organic. There'll be a point where we will be able to, maybe on our phone or whatever, scan the label and say, yes, that was produced at Bob's farm on April 30th. Here's how it's certified: this, this, this, and this.

When that point gets there, then the consumers will start speaking with their dollars about what's important to them with how the food's processed and the manufacturers, what they're going to have to do one or two things. 

They're going to need to make sure their food is all traceable too, or else the consumers won't be in the game.

I think there's also an opportunity that comes with that.

Not just risk, there's opportunity as when we start plugging in the consumers feedback, then our food producers can know: let's make the blueberry muffins in New Jersey because that community likes blueberries.

You know, it starts to give all this data back and forth on how to target the market a much more sliced out way. So you'll see a lot of shifts.

And the only way to achieve that at the energy efficiency levels and the sustainability levels that we do today is to have a very tight, digital control over everything.

Blockchain is just another tool that we could have to potentially help with traceability.

I don't know if it's the answer or not. We start working with tracking food. One of the things that was doing well in the coffee bean world, using an example, we've been spraying some of the coffee beans with DNA, to be able to track them.

So there's a lot of open space there to create more accountability and more traceability and more structured targeting of different foods. And that's something that we're going to need.

In 2050 there will be 10 billion people and we're going to have a food shortage. So there's a real push and mission behind that right now. If we look at our food supply chain to global humanity, we're 30% short, but yet we waste 30% of the food during manufacturing. 

So if we could just decrease their waste and find different ways, one of the other areas we're playing very big in is the alternative protein. So creating space and the alternative protein piece and, and all this is going to require a more robust food traceability system behind it. 

The Bühler Group approach to digital comeback is through Digital Connectivity.

This multi-billion dollar company is a proponent of communication and transparency, using their company to work towards a goal that is bigger than themselves like sustainability. Then they help their clients succeed in similar efforts.

The agricultural industry is not one that is automatically inclined towards all things digital. However, even with this industry’s old roots and traditional background, a hard truth is becoming apparent. Businesses reluctant to embrace technology run the risk of getting left behind.

As the economic climate shifts, more and more companies are behaving digitally, and more and more Bühler customers are expressing a willingness to share data and be transparent in their business transactions, paving the way to deeper digital connectivity.

Learn more about the Bühler Group here

Read more about Tizbi here

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