The real issue of rising energy costs and what manufacturers can do

rising energy costs

Rising energy costs are a massive problem for Australian food & beverage manufacturers. Are they fighting a losing battle? Or will emerging technologies give new hope in 2018?

Food & beverage manufacturers are big users of electricity. According to the latest figures from the Australian Bureau of Statistics, the food-manufacturing industry pays a staggering $706 million a year on its electricity bills, which is 17% of the entire manufacturing industry’s energy expenditure. That puts food makers second only to the mining industry as the biggest spenders on energy.

And it’s not breaking news that we are in the grip of rising energy costs. The Australian Financial Review reported that average spot-power prices across the states in February 2017 were between 98% and 360% higher than a year earlier. And every price rise puts another dent into the manufacturer’s bottom line.

We’re not only talking about big businesses; a paper by the Australian Competition and Consumer Commission released in May 2017, showed that small businesses were paying a disproportionately higher share of electricity prices compared with larger businesses and households.

The challenge is that food & beverage processors cannot simply pass these rising energy costs onto the consumer — especially if they have overseas competitors unburdened by higher Australian power prices. So how can they continue to be competitive with overheads soaring?

Improving your supply chain efficiency is one way to be competitive in Australia’s extremely competitive beverage industry. This free whitepaper looks at opportunities through creating operational excellence, a cost-effective supply chain, recording and having access to quality data in real time and more. A must-read for beverage processors. Download Now

 

Industrial Internet of Things (IIoT): the silver bullet?

For some, the answer lies in the Industrial Internet of Things (IIoT). The IIoT refers to a digitised network of equipment and devices connected by communications technologies, which gives us access to information and data about our operations that we never before had. These insights can help manufacturers make smarter, faster business decisions around everything from equipment maintenance and staffing to energy control.

For instance, you can extract data from sensors on machinery along the line to monitor equipment performance and power usage. This data can be translated to identify areas where energy could be saved. In places of excessive power consumption, for example, there could be defective equipment or bottle necks that need to be addressed. Also, real-time energy use and machine-monitoring systems can be used to monitor temperatures throughout the plant, which can help save on energy costs.

(You can learn more about the IIoT in Australian food & beverage manufacturing and also its role in accelerating innovation in a bimodal supply chain.)

 

Preventative maintenance: the hidden solution

Don’t underestimate the potential of preventative maintenance on energy savings. Preventive maintenance is not about fixing problems as they happen; it’s about preventing those problems from happening in the first place. By performing regular tasks such as cleaning, lubrication, adjustments, repairs and parts replacement, the equipment is always at optimum performance. And when machines run more efficiently, they don’t use as much energy and resources (not to mention extending the overall life of your equipment – read more about the benefits of preventative maintenance here and preventative maintenance programs here. This blog looks at preventative maintenance’s role in lowering TCO.)

The IIoT puts manufacturers at an advantage here, too. Sensor-equipped machinery and smart technologies enable things such as maintenance alerts and remote diagnostics. Today’s labelling and coding machines, for example, have sensors that can check the output quality and warn of potential issues long before the machinery breaks down.

 

Investing in energy efficient equipment

Those manufacturers in the market for new equipment are shopping with energy efficiency in mind. Heat and Control Sales Manager Greg Pyne told us at Foodpro 2017 that power prices had become a major consideration for customers investing in new equipment: “It’s a real focus on basically not only the price of the equipment, but the running costs of the equipment in terms of power consumption.”

At the same time, many manufacturers are looking to technology solutions that enable more efficient processing across the line so they can reduce long-term running costs. Pyne said: “People are looking for things like — on their fryers for example — heat-recovery systems; they’re looking for anything where they can reclaim that energy back and utilise it in some other area in their plant.” (Speak to Matthews Australasia about how to automate your labelling, coding, inspection processes, and integrate your coding and inspection equipment within your packaging line.)

 

Summary

When it comes to battling rising energy costs, unfortunately there is no silver bullet. But machine connectivity and enhanced equipment efficiency is helping to put the power back into manufacturers’ hands. As Brett Wiskar, R&D and Innovation Director at Wiley, told us recently: “The 2018 priority list for every manufacturer is to find ways to drive efficiency in energy usage and to finally mount that long-overdue business case for energy generation and storage … there’s not a moment to lose.”

Just on enhancing efficiency, this whitepaper has 7 valuable lessons in labelling and coding, covering taking advantage of best practice labelling and coding. Download Now

 

Matthews has large resource library full off highly informative case studies, whitepapers, presentations we’ve done to industry bodies, infographics for manufacturing, articles from our thought leaders, vids showing solutions in action, lots of detailed of brochures and more! And its all free to download!

Image credit: iStock / Waldemarus

Matt Nichol

Matt Nichol

Key Account Manager at Matthews Australasia
Matt is a laser marking expert and has in-depth knowledge of product ID technologies. He is a regular at international trade shows like Pack Expo and is constantly looking at emerging trends and technologies.
Matt Nichol

by Matt Nichol

Matt is a laser marking expert and has in-depth knowledge of product ID technologies. He is a regular at international trade shows like Pack Expo and is constantly looking at emerging trends and technologies.

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