Reluctance to adopt technologies, like automation is in part driven by ‘endless squeezing’ of supplier margins by the major multiple retailers, says the PPMA Group (Processing & Packaging Machinery Association).
The announcement comes following a Government Automating Manufacturing Programme survey involving 367 UK manufacturers last year.
Barrier to further investment
Grant Collier, head of marketing, PPMA Group told FoodProductionDaily it discovered many food manufacturers are reluctant to go public with the fact they want to automate.
“The research looked at 367 companies who were interested in automating their businesses," he said.
"Of those firms, 37% came from the food manufacturing industry, which is interestingly one of the slowest industries to pick up on automation because they’re all too aware that some of the multiple retailers they’re supplying will squeeze them even further once they know they’re automating production.
“They complain the biggest multiple retailers use the fact that they have automated to squeeze their margins further.
“This has the potential to create a blockage in the supply chain and a barrier to further investment in automation.”
The PPMA Show 2014, a processing and packaging machinery exhibition, has invited Christine Tacon, the Government's first appointed supermarket ombudsman, as a guest speaker at the event at Birmingham’s NEC from September 30-October 2.
As Groceries Code Adjudicator’ Tacon has to make sure supermarkets treat their suppliers fairly and lawfully. With her responsibilities backed up by law, she can launch investigations into suspected breaches of the Groceries Supply Code of Practice (GSCOP), name and shame and fine guilty parties for misconduct.
Her seminar, on the first day of the show, will focus on Tacon’s work with the UK’s largest supermarkets and to encourage feedback from suppliers, whether it’s personal, anonymous or through a trade association.
Collier added with Tacon onboard, he hopes it can resolve issues surrounding investment in robotics and automation equipment and make it more attractive to the UK’s manufacturing industries.
“If the adjudicator is successful in naming, shaming and fining offenders it will help change the supply chain culture,” he said.
“Outlawing bad, unethical supply chain practices should free up investment in automation. There is also the issue of many suppliers working without contracts in place, which is something the adjudicator is looking to change.
“Any companies affected by the squeezing of supplier margins can anonymously report these issues to the adjudicator via trade associations that are aware of the problem.”
The PPMA Show is free to attend attracts hundreds of machinery manufacturers and component suppliers across a range of industries including food, drink, pharmaceutical, cosmetics, dairy, snacks, construction and electronics.