Expand, Adapt, Adopt:

technology and strategy

for change
FMCG Manufacturing
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Royal HaskoningDHV | Expand, Adapt, Adopt: technology and strategy for change
Expand, Adapt, Adopt:
technology and strategy for change

Changes in consumer demand and behaviour are driving transformations

in global FMCG manufacturing. Manufacturers are expanding into new
countries, adapting to changing patterns of demand and adopting
new technologies to support their strategies.

New solutions are helping manufacturers manage risk,

remain competitive and future proof their investments.

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 Responding to global growth
in consumption: Expand
The global middle class population is expanding at an unprecedented rate.
More people with more disposable income create a huge opportunity.
Manufacturers are expanding to meet the growing demand. A new production
facility for beauty products in Asia, which has become our client’s largest factory
in the world, reflects the scale of the opportunity presented by this growth in
affluent consumers.

What are the metrics for successful

expansion to meet rising demand?
Markets can be unpredictable so operations need to be flexible
We see the “standard” lifecycle approach for products changing quickly.
A “star” today can be disrupted tomorrow. Flexible and adaptable solutions
enable manufacturers to scale up easily to meet changes in market demand.
This is particularly important in regions where markets are unpredictable and
demand volatile. Here extra scrutiny of investment decisions using our Business
Case Consultancy service ensures they are the right ones to deliver the value
expected. Then, our modular designs and skid-mounted solutions provide
flexibility to meet future changes in demand. A design we delivered for a
factory and warehouse in South Africa enables process lines to be changed
or expanded without impacting the rest of the operations and is being used
as a template for our client’s future expansion projects across the world.

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Competition is fierce so cost management Our global organisation is market focused, rather than a country-based model,
and fit-for-purpose design are vital and provides a globally inter-connected service to multinationals. Our design for
Fact-based models using parametric design and Building Information Modelling a client’s new factory and headquarters in North Africa drew on our experience
(BIM) tools are enabling companies to optimise solutions in relation to CAPEX of the client’s operations in other countries to build in flexibility and ease of
and OPEX. Innovative design can then help drive costs down further. For example, maintenance for production and packaging lines. LEED certified, it is advanced
a cooling solution we introduced for an industrial building in the Middle East in terms of materials used and energy efficiency. Reviewed by a leading European
reduced operating costs with minimal impact on capital outlay. In addition, university, our solution was identified to be more sustainable at lower cost
the use of local contractors can offer considerable savings in construction costs. compared to benchmarks.
To offset concerns over meeting requirements for quality, safety and timing,
our hands-on pro-active construction management service has proved successful. Co-manufacturing offers lower risk and increased speed to market
A new distribution centre in Nigeria built by local contractors under our full Contract and co-manufacturing options offer faster entry to market and cost
supervision met quality requirements and was completed at half the cost of savings, making them appealing as entry or expansion strategies. Manufacturers
the initial quote. are also able to test the market before establishing a permanent presence by
using their distribution networks. Such routes appear to offer lower risk as no
International standards need to be maintained across capital investment is required, but careful due diligence of partners is essential
global operations to avoid other risks, for example to reputation. To ensure manufacturers are fully
Consistency in quality across global operations is vital for multinational producers, briefed on potential partners, our specialist teams use tools we have developed
while pursuing lower costs and increased flexibility. To do so effectively, they benefit to make operational plant assessments, undertake benchmarking and conduct
from partners who can also offer the same level of service and attention in every due diligence.
country, making it easier for lessons learnt in one region to be adopted elsewhere.

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 Project reference:
Careful planning maintains production
during upgrade and extension
When our client sought to upgrade and extend their plant for skin care
products in Indonesia, it was essential to maintain production during
the work. The 30-year-old factory was operating at full capacity and
this needed to be increased to meet growth ambitions. The upgrade
affected all areas of the operations including production, warehousing,
utilities and waste water. Working closely with our client on the
conceptual design, we explored the flows of people, products and
waste and examined all the alternatives before reaching a solution.
The result enabled production to continue throughout the work and
has increased operational efficiency.

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 Project reference:
Smart solutions for expanding operations
As a partner for our client’s expanding operations across Asia, the Middle
East and Africa, we are identifying low-cost improvements which are
smart,effective and innovative. The partnership followed our design
for a new beverage production facility. It included sustainable solutions
which improved the company’s own design standards and were embraced
globally. We have since updated our client’s regional design specifications,
delivering a result described as ‘above and beyond expectation’.

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 Project reference:
Brewery is first to market
at lowest possible cost
Our client’s expansion into a new country in East Africa came with
two challenging requirements: quick completion and low investment.
We chose a pre-engineered building system, reducing construction time,
guaranteeing quality standards, and ensuring our client won the race
to market ahead of competitors. Costs were kept low by awarding
the construction to a local contractor. We had a strong team on site
to guide the contractor, co-ordinate supplies and meet timings for
process installations. Completion was achieved on schedule.

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Meeting demand as consumer Health and wellness
Consumers focused on healthy lifestyles are seeking to limit consumption of
behaviour changes: Adapt specific foods, like sugar, salt, preservatives and meat. Online communities
and technology, including smart watches, will assist in personalising products
Megatrends in consumer behaviour are driving FMCG manufacturers to change
and advising individuals what to eat and drink.
their business models, for example:

Sustainability
Personalisation Consumers are increasingly interested in sustainability. The on-going plastics
The Internet has enabled consumers to connect directly to manufacturers and led
discussion is a good example. Rising up the agenda is a product’s carbon foot-
to technologies whereby customers can personalise products and create platforms
print. While current production and supply chains are still mainly focused on low
on social media. This has been under way in the automotive industry for the past
cost, the more empowered and critical consumer means return-on-investment
decade and is moving into the consumer goods industry with experiments such
for more sustainable solutions will become increasingly relevant.
as Nike ID.

These trends require changes in production and supply chains. Our teams
E-commerce are helping manufacturers make the right decisions for future operations.
Automated replenishment, subscription models and on-demand home delivery
For example by modelling the impact of customisation, we advise on strategic
are rapidly changing the production and distribution chain. Speed and flexibility
changes required. By looking at the financial impact of portfolio rationalisation,
are key indicators to keep demanding consumers satisfied.
our business case team helps manufacturers make better decisions, and our
engineers are advising food manufacturers how to increase flexibility in
production and distribution.

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What adaptation strategies are but benefits include lower environmental impact and the potential for higher

needed to meet changing demand? customisation of products. We are involved in a future-focused project exploring
a new concept in city farms. The first harvest of vegetables has been gathered
from a floating food farm which uses water both as an area for farming and as a
Continuous innovation and increase in product launches
medium in place of soil. Such a solution can help make sustainable food available
Demand is fragmenting, creating the need to continually introduce new products
in areas of high population density where land for farming is limited.
to meet specific consumer needs. It requires the supply chain to be more agile and
prepared for continuous innovation. Time to market is critical too, particularly if
Commitment to sustainability and the circular economy
products are pre-advertised.
Consumers are increasingly concerned about the ethical and sustainable aspects
of products they purchase and will change habits in response to negative media
Supply chains which can respond to the pull of the consumer
coverage. The regulatory context is changing too and the adoption of the first
In contrast to a push supply chain, where manufacturing and logistics rely on
European Strategy for Plastics in a Circular Economy in 2018 will have a profound
projections of consumer demand, pull supply chains are mainly driven by actual
impact on the FMCG industry. In this context, sustainability of operations and
demand. Digital technologies and big data analytics are enabling pull supply
ethical sourcing are important for the bottom line and should be addressed
chains to become easier to implement and will significantly impact the global
strategically. Our expertise in areas such as resource efficiency and the energy
configuration of supply chains in the future.
transition is invaluable to clients. For example, we have provided advice and
estimates for one of our multinational clients to create its first energy neutral
Trend for distributed manufacturing, closer to customers
brewery.
Large centralised factories are likely to be replaced by production close to the
consumer. Implications for the supply chain and industrial locations are huge

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 Project reference:
Optimised layout and logistic flow
more than doubles production capacity
Our client needed to expand production capacity of a factory in Eastern
Europe to meet increased demand for convenience foods. The existing
infrastructure and availability of land constrained physical expansion
on the site. However, by optimising the layout and logistics flow,
and paying particular attention to process automation, we delivered
a solution which increased production by a factor of 2.5 on the
existing premises.

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 Project reference:
Waste water treatment improved while
plans made for more sustainable plant
Having expanded cheese production with a new factory on its site in
the Netherlands, our client needed a new treatment plant for waste
water which met its corporate sustainability commitments. While
exploring robust future options (including our Nereda® technology
which does not need chemicals and uses less energy and space than
traditional plants), we applied our knowledge and insight into im-
proving the operation of the existing plant to save our client money.

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 Project reference:
Circular economy business
for work wear launched
EcoProFabrics is a circular economy textile business producer which
proves that a sustainable breakthrough in the B2B market is possible.
We were one of the partners in the successful launch of the business
supported by the European Union’s Eco-Innovation Initiative. It involved
developing the technology, the market, management tools and circular
model within a tight time frame. This is one of the first Eco Innovation
projects that successfully transferred a business idea into a full-scale
circular economy.

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Implementing new technologies There is a need to future proof the output and process of industrial projects
within the context of Industry 4.0. This is addressed in our projects, through
to stay ahead: Adopt implementing latest technologies and project management processes.
In addition, we supported research into this topic by graduates at both the
Intensifying competition and the continuous need for cost efficiency means Delft and Eindhoven Universities of Technology. Highlighting the fact that
companies must adopt and embrace new technologies to support their strategy. FMCG factories in the future are likely to be smaller and smarter, with almost
autonomous movement of goods and interconnected systems, the conclusions
How can companies future recommended implementing changeability and integration as additional

proof facilities in the face of project drivers.

constant change? Explore how digital technologies can improve decision making
Digital technologies improve not only the process of creating new assets,
Prepare for industry 4.0 with clear strategic goals they are helping with managing existing factories. Based on our fast plant
With a multitude of digital technologies available, companies are well advised assessment tool, we have developed a technology enabling industrial companies
to start with a clear understanding of the strategic goals they are trying to to automate assessments of their sites, equipment and facilities, collecting and
achieve. However, there are good reasons not to delay. These technologies allow analysing the considerable data quickly and efficiently. Called Assessi, it reduces
forward-thinking decision making and provide transparency and predictability costs compared with traditional methods by up to 60% and helps companies
in delivering value in the supply chain. make better decisions.

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Balance cost, flexibility and speed with a digital twin
Simulation technologies can also provide considerable insight for more effective
decisions. Predictive simulation creates accurate models to represent the behaviour
of real-life systems and processes. It is already used to address operational issues
in areas such as supply chain planning, raw material processing, packaging
flexibility and facilities layout planning. Now, by combining cutting-edge
simulation software (supplied by Lanner, a company of Royal HaskoningDHV)
with our data-driven solutions and domain knowledge, it is possible to model
and optimise plans and processes in a digital twin. The digital twin allows
manufacturers to analyse and determine the optimum balance for costs,
flexibility, speed and customer service levels and extends into the OPEX phase,
providing information management capabilities for the whole life cycle.

Apply artificial intelligence in supply chain management

Many global manufacturing companies have supply chains that have developed
over time in response to rapid growth periods, mergers and acquisitions, and
divestment activities. They may not be optimised for operations today.
Understanding the flows between hundreds of production sites and distribution
centres is a task well suited to machine learning and can lead to massive opera-
tional savings.

Further insight in developing the supply chain of the future arises through our
collaboration within the European Supply Chain Forum (www.escf.nl).

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 Project reference:
New future-proof refrigeration
at food production plant
New cooling and buffer tanks at a food production plant in the Netherlands
include a state-of-the-art large flash cooler and ammonia refrigeration system.
The use of ammonia as a natural refrigerant rather than Freon makes it future
proof and improves the efficiency of the unit. The low temperature requirements
of the plant meant a unique near-vacuum design was used in the flash cooler
for the first time in such a unit. Because of space constraints, we designed the
solution inside out, starting with the process and subsequently the exterior.

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 Project reference:
In-depth scheduling analysis
improves operational efficiency
In-depth analysis of a food manufacturing process using
Industry 4.0 principles has enabled a manufacturer of
potato products to significantly increase the efficiency
of their operations. Working at their factory, we analysed
the behaviour of the manufacturing set-up, looking at
parameters which included the vegetable variety, line
efficiencies, waste produced, SKUs and output volumes.
The algorithms that emerged from this process not only
helped the company plan their stocks and production,
but enable them to make the right decisions when looking
to expand or introduce new products. This project shows
how Industry 4.0 optimisation in the factory is used for
strategic future planning of investments.

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 Project reference:
Supply chain analysis saves
investment in cold storage
When our client asked us to optimise the design of a new
cold storage facility in Russia, we came upwith an unexpected
solution and saved considerable investment for the company,
which provides integrated distribution services all over the
world. To gain a complete understanding, we inventarised
the chain and then used parametric design to consider various
scenarios. Parametric design involves creating a responsive,
configurable model where changes to inputs or outputs can
be easily visualised and the impact assessed. The conclusion
we reached was that no cold store was needed. Instead,
by organising the supply chain differently, our client could
rely on cold storage within the chain. The solution was a
clear win for our client.

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 Project reference:
Predictive simulation technology keeps
company ahead of its competitors
Our client, which specialises in packaging systems for FMCG companies,
has used our dynamic simulation technology to give them a competitive
edge. The challenge they faced was that they needed to prove the validity
of their designs for highly complex systems in order to close the sale.
Traditional spreadsheet calculations were simply not able to predict
performance of complex systems in the detail required. They chose
WITNESS simulation software provided by Lanner, a company of Royal
HaskoningDHV, for all their modelling requirements. It allows them
to virtually simulate the new packaging environment, avoiding test
hours and machine stops on real production lines, and enables their
customers to make important decisions with more confidence. The
solution has provided a unique competitive advantage for our client.

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 Would you like to
discover how we
Integrated project services from expert, can support you in
multi-disciplinary partner your challenges?
Manufacturers are facing numerous challenges as they respond to
Contact the team:
the opportunities arising from expanding markets and changing Europe, the Middle East
consumer demands. That’s why the multi-disciplinary teams at Royal and the Americas
HaskoningDHV with expertise extending well beyond manufacturing
Patrick Ramakers
processes are invaluable for identifying and implementing best-value,
Patrick.ramakers@rhdhv.com
sustainable solutions.
+31 (0)6 29 06 40 32
Manufacturers can draw on our strategic support in the decision
Africa
making process for investments. They can rely on local knowledge
from Royal HaskoningDHV’s international network and experience Kevin Subramani
in Europe, the Middle East, Africa, Asia and the Americas, supported Kevin.Subramani@rhdhv.com
by our global and regional centres of excellence. Additionally solutions +27 (0)79 52 52 505
for waste reduction, water management and flood resilience draw
on the considerable expertise within the organisation. Asia
Ruud Kreuk
Ruud.Kreuk@rhdhv.com
+65 (0)8 44 44 52 9

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