More small, medium feed manufacturers are investing in automation as a means to survive and thrive in today’s labor market
Finding and retaining reliable employees has challenged the animal feed industry pre-dating the “Great Resignation.” Rural operations have a limited pool to draw from, with unique challenges in attracting a stable workforce. As new technologies come online and others improve, feed manufacturers invest in automation to increase production and improve their efficiency and profitability. However, trends in the labor market have prompted increased interest in robotic solutions.
At the end of the line, manual palletizing positions are especially difficult for feed producers to fill. The work is difficult and repetitive — often in an uncomfortable environment — and can take a physical toll. Here, robotic palletizing systems have become a popular and efficient solution, one that alleviates stress of trying to fill the role.
Today, in the face of critical post-COVID labor shortages, more feed producers are investing in robotic palletizing systems to survive and strengthen their operation long term.
Feed Strategy sat down with Joe Natale, Premier Tech’s sales manager for the animal feed sector in the U.S. and Western Canada, to discuss how robotic palletizing systems are helping feed manufacturers cope with rural labor shortages and position their businesses for future growth.
Seventy percent of Premier Tech’s North American feed mill applications are used to handle finished feed, and 30% involve feed additives, premixes and ingredients.
Q&A with Premier Tech’s Joe Natale
Feed Strategy: Any notable trends or shifts in the demand for robotic palletizing systems since the COVID pandemic?
Joe Natale, Premier Tech sales manager: In rural areas, I see a huge emphasis on availability of labor. Feed is a demanding industry and a lot of times the work is challenging. The typical work environment is not air conditioned and dusty. Quite a few of our customers are competing for labor with big distribution warehouses or something similar that might offer better working conditions and even higher pay.
COVID has made [labor challenges] an even bigger issue because there seems to be less available labor. Even before [COVID], I would say, there was an emphasis on labor shortages. In rural environments, there is simply not a huge pool of labor to choose from. There are several factors at play that have reduced available, or readily available, labor.
When you talk about palletizing, specifically, you’re talking about people who must lift 40 or 50 pounds or more, so you’re further reducing the labor pool. First, you don’t have a whole group to choose from and then you’re further restricted because it’s not easy. I get a lot of customers saying, “We try out new staff, and by day two they’ve either called in sick or they just don’t come in anymore.” It makes production planning a real headache.
I’ve routinely heard that story. Feed mills just can’t staff, especially in a palletizing role. Unfortunately, it’s not an easy role to fill, and then it’s hard to keep that person there, keep them motivated. It’s a mundane task.
Feed Strategy: Are you seeing an uptick in new customers putting in robotic systems for the first time or more existing customers expanding or upgrading their equipment? What’s the breakout?
Natale: Our feed customers break into three groups: large multinational or national companies with multiple mills across the country, small regional producers [with multiple mills], and then single mill customers.
The large national customers have a plan in place, and the plan is to continue to automate and replenish the palletizing systems and bagging systems that they have. Automation is already there, they’re very keen to it, they’re very aware of it, they know it, they have it, and they’re just continuing the trend. It’s usually a replacement of equipment or adding automation to one of their new locations.
Then there’s the regional mill group, a feed customer with five to 10 plants. They might be somewhat down the road on automation. They might be replacing new systems, but they’re doing the same as the bigger groups.
Then there’s the single owner mills. Here, we’ve seen quite a few purchase and install fully automatic systems. They have a business opportunity and they’ve said, “You know what, if we stick to the current way we do business without automation, we’re not going to be successful.” I would say they have been more in the manual area, and they’re making the jump to automation. I think that’s because they just don’t see any other way. They’re tired of doing business the other way, which is manual labor that’s not available anymore. Towns are smaller, labor is hard to find, but there’s an opportunity there for them to do some new business, perhaps, or expand their business and the only way they can do it is by automation.
The smaller player may not have been interested five years ago, but now there are some opportunities out there. They’re business owners, a bit more entrepreneurial, and they know they’re not going to get there with manual labor. They recognize that, and then they factor the equipment into how they’re going to win that business.
Feed Strategy: Would you say that COVID has accelerated their willingness to make these investments or is this the direction things would have been going anyway?
Natale: Yeah, no doubt. Probably not giving you anything groundbreaking there. None of my customers has complained of having too many applicants. Even 10 years ago — it wasn’t like, we have so many people looking to do this job so you’re not going to help me with automation. It was more like, you know, what we can’t find people, and palletizing is one part of that.
Palletizing is mundane, it’s repetitive, it’s unsafe — I think you want to have as little operator involvement as possible so having mechanization just makes sense. It’s more efficient and it’s just going to be better long term. Although application driven typically automation is a better solution than a manual approach.
Feed Strategy: When you talk to potential customers, what do you identify as the three key benefits of robotic palletizing systems?
Natale: First, I would say safety. There are obviously risks with manual palletizing. Companies are concerned about their operators, whether it’s their personal safety, which should be the case, or more from a financial perspective, you know, risk mitigation. Health insurance claims and premiums can be quite costly.
Then I would say, a dramatic improvement in packaging efficiency. There’s a certain physical component to palletizing by hand. You can only do so much, for so long, at a certain rate. The operator is limited in how many bags they can do a minute — not to mention the other human factors, like sick days, breaks or unmotivated employees. To improve or increase a facility’s bagging capacity, you have two choices, either have an automated palletizing solution or put more operators on the line.
And, third, consistency. As producers become less reliant on manual labor, they can achieve more consistent quality results. With automation, you know you can make your production quota that day when you can turn on the machine. So it’s a lot more consistent in that regard.
Feed Strategy: How many positions can robotic palletizing system eliminate?
Natale: There’s some direct replacement of the operator doing the actual palletizing task and it sort of depends on the application itself. Some applications, like finished feed, will run faster so it’s more of a volume play versus feed ingredients where you might want to be much more accurate and the emphasis is getting a high volume of product out the door.
If you’re running faster, there’s a direct replacement of an operator. If there’s one operator, if there are two operators, depending on how fast the bags are coming… I’ve seen some sites where there’s a group of operators sitting around and they take turns palletizing because they simply can’t keep up with production when it ramps up.
You can package more effectively, with greater speed and with higher quality results. The existing displaced operator(s) can be reassigned and given different tasks around the facility that bring more value to the operation.
I would say the other thing to think about or consider is that having an automated system, whether it’s bagging and/or palletizing, will it help potentially reduce employee turnover, which reduces the acquisition cost of new operators. Automation creates a better work environment so people don’t leave.
Feed Strategy: What’s the average return on investment (ROI) for one of these systems?
Natale: Pre-COVID, ROI was anywhere between a six-to-eight-month ROI, all the way up to maybe 36 months.
But I want to say that, honestly, with COVID, it’s almost been a situation of business continuity versus ROI. It’s kind of hard to stay in business if you can’t package your product and get it to market. ROI is important, but its emphasis sort of slides down the priority list a little bit because they’re not able to get the people in there anymore. I think that business continuity is really important right now.
It seems like many equipment manufacturers currently have long lead times. I think this is because there are so many customers who are realizing that to keep their business going, they need to move forward with automation.
The ROI, for sure, is an important thing, companies try to get there within a 24-to-36-month window, but honestly, some of our customers are just saying we need this, because otherwise we are not going to be in business.
Feed Strategy: Looking at future technologies, how do you think robotics — in handling or otherwise — may evolve? And what kinds of possibilities or opportunities are there for feed mill applications?
Natale: Robotics have been incorporated into more the front-end portion of the packaging process. In many of the baggers that we manufacture, we have a small robot that we have affectionately named “ANDY.” This robot moves the filled bag from the bagger spout to the sewing system. We completed that innovation 12 years ago because we were using robots on the palletizing side. We needed a repeatable, consistent, and maintenance friendly solution so we put robots in the bagger.
The next trend we see is using robotics in depalletizing applications, meaning having a robot take bags off a pallet and deliver them to a mixing system or another type of processing equipment in the feed mill. We have completed quite a few of these depalletizing systems in the last 5 years and more are coming every day.
A little more into the future, we see robotic systems that will automatically replenish the supply of empty bags in the bagging unit’s empty bag magazine. Right now, there’s still an operator monitoring the empty bag magazine, but we’re trying to remove tasks so they can focus on performing higher-level functions.
The idea of having robots throughout the packaging line is not uncommon, and potentially more upstream on the process side as well.
Feed Strategy: What’s the outlook for robotic systems in the next decade?
Natale: There’s a big demand for robotic integration and applications in feed mills. I don’t see it slowing down. Especially for those single mill type customers — either you automate or you’re going to be gone. Either you jump on board or you’re going to be selling your mill to another group and getting out of the feed business. We feel automation is here to stay.
To that end, we are improving our own automation by investing $33 million in a new production facility in Montgomery, AL, to support our U.S.-based customers.
For more information on Premier Tech and its products, visit Premier Tech’s Feed & Grain Buyers Guide profile.
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