The Packaging Therapist

Risk-Free Robotics: Automating Your Packaging Line, with Saman Farid of Formic

• Jessie Schwartz • Season 1 • Episode 11

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Struggling to keep up with the fast-paced advancements in automation and robotics? 

In this episode, Jessie Schwartz chats with Saman Farid from Formic to uncover how automation can revolutionize manufacturing in the CPG industry. They discuss the risks, rewards, and the future of robotics in packaging, and reveal strategic insights to help you make informed decisions.

In this conversation, you'll learn:

  • The key factors to consider when deciding if your facility is ready for automation.
  • How to strategically approach packaging standardization to facilitate smooth automation processes.
  • Why risk mitigation is crucial when investing in robotics and how Formic takes on that risk for you.
  • How integrating robots can improve employee satisfaction and operational efficiency in your facility.
  • The transformative potential of AI and machine learning in enhancing the capabilities of automated systems and future-proofing your manufacturing operations.

Tune in to understand the full scope of how robotics and intelligent systems can optimize your packaging line and boost your bottom line.

If you love our content and want to learn more about the packaging industry, hit SUBSCRIBE!

Connect with us: www.StrategicPackagingPartners.com
Jessie Schwartz - jessie@stratpackpartners.com

Jessie Schwartz:

Welcome to the Packaging Therapist Podcast. I am your host, Jessie Schwartz. I've been a packaging engineer for 20 years and currently the founder of Strategic Packaging Partners, where we are obsessed with creating strategic approaches to packaging to enable growth and cost savings in the CPG industry. My goal in this podcast is to discuss hot topics in the packaging space to enable you to make strategic decisions for your business that impact the bottom line and take the chaos out of manufacturing. Join us for technical discussions about packaging and let's make the world of manufacturing better together. Everyone welcome to another episode of the packaging therapist today. We are joined by formic. I'm super excited about this guest. Um, we're going to talk about automation today. And the reason I was super excited about having formic on the call is because they approach. Um, robotics from a different, a different way, like, really super neat way for companies to get into some capital and basically lease robots pay for when they're working and it allows organizations to really leverage. Robots in a way that is also helpful for the bottom line. So welcome to the show, Simone.

Saman:

Jesse, thank you so much for having me. Excited to be here.

Jessie Schwartz:

Fantastic.

Saman:

in desperate need of some packaging therapy.

Jessie Schwartz:

Welcome. Welcome to the show. We'll see what we can do. All right. So I'd love to kick it off and just kind of talk about the landscape of, um, automation in packaging, like what's going on in the industry right now.

Saman:

Yeah, um, so I think that the state of affairs is very interesting. What we've seen is, um, there's obviously the kind of very big companies like Procter and Gamble and Mondelez and, uh, Hershey and Nestle that, you know, have a good amount of automation already. but all the smaller production facilities that we visit, are really at this juncture in the road where they're trying to decide how heavily they invest. In automation and robotics in particular, I think there's kind of the kind of first generation of hard automation, particularly around primary packaging, which people really did invest in, over the last 20 years. now the question comes where there's still a lot of labor, typically at the end of the line in, in kind of the pack out. And a lot of folks are trying to figure out, you know, how do I approach this problem? because, um, there's a lot of costs associated with it. But more importantly, there's a lot of risk. The technology is changing really, really quickly. and the thing that we hear from a lot of customers, a lot of manufacturing facilities is. Three things, which is kind of very surprising to hear them all together. Number one, what we hear a lot is I know I'm going to go out of business if I don't figure out a way how to automate. Number two, we hear often, I've been trying to figure out how to automate this thing for the last 10 years. and number three, Unfortunately, a lot of them to say, well, I still haven't figured out a way to do it. And that's, you know, it always keeps getting moved to the 5th 5th thing on my list or the 10th thing on my list. There's always burning fires that I need to put out, and that's this keeps getting pushed off. and, uh, you know, that's a really tough situation to be in. when manufacturers are trying to fight to be competitive, uh, not just in the U. S. But globally, ultimately. and, uh, you know, we now work with 100 plus manufacturing facilities and for 90 percent of them, it's the first time they've ever had a robot in their facility. and so, uh, being able to facilitate that and make that easier is something we've been super proud of, uh, and seeing how it transforms these businesses once they deploy automation has also been, uh, really fascinating to watch. So, um, yeah, we're really humbled to be here at this kind of moment in time when American manufacturing is going through this renaissance and trying to figure out, you know, how's it going to fit in, in the world as, the inflation starts to come, labor costs go up. You know, product demand is changing. People are looking for more variety, and all of these things are starting to impact, uh, the manufacturing world and particularly in CPG.

Jessie Schwartz:

Yeah, for sure. CPG is wild. Right. Um, and margins are tough. And so if you can free up time and get more product through or reduce labor costs or overhead, or, I mean, it's just, it all comes together. So, you know, a lot of people, like you said earlier, like, Oh, I really tried to automate this and it hasn't really worked out for whatever reason. I don't feel like a lot of people understand quite when to automate and when not to automate. And so why don't we kind of think about, why don't we talk about how to think? about getting robots. When is the right time to automate? When should you kind of hold off? Um, we'd love to hear your thoughts on that.

Saman:

yeah, I think it really is a balancing act in a lot of ways. I think there's a bunch of factors that matter. 1 of the big ones. Is just general utilization, right? If a facility is running. 4 hours a day or 5 hours a day. or in the case of some factories, they're working very seasonally. Like, we, we, we talked to a candy manufacturer that they really only only run their facility, uh, you know, 3 to 4 months out of the year. Uh, and then they do 1 hour a day for the rest of the rest of the year. Um. And so for those kinds of situations, it's very difficult, uh, to make the numbers work when it comes to automation. the other thing that is also really important to consider is a big difference between the way that contract packagers, approach or contract manufacturers or contract packers approach, automation as compared to, Brands that are making their own product, primarily around kind of the forecast, right? I think brands that are making their own forecast, their own product are often able to forecast 6 months out, 6 years out, you know, 10 years out, depends on really the kind of industry and product line that you're in, whereas contract. Packagers typically don't have more visibility than 12 months, uh, into the future. and so as they, go through that process of figuring out, you know, how their business is going to shift and change, it becomes much harder to get CapEx, approved to go and buy, you know, something that you may not need in a year or two years. So, that's the 2nd thing. The other factors obviously are our labor costs, right? I think there's a big difference between the coasts versus, for example, the South, where there's like, there's a lot of difference in terms of average labor costs. Um, and so that impacts the economics. Uh, and then the 4th is, I think, in the product itself, I think, if people are running a lot of variety of products, um, you know, from low weights to high weights from low rates to high rates, various kinds of packaging. The more variety you introduce into that, the harder generally is, to automate. And so, uh, what we're looking for, are, you know, when we work with facilities, you know, we're trying to make sure that on a single production line, there's enough capacity, uh, of product, you know, that's foreseeable for the next year or two years that makes sense for automation. Uh, and, and then we can kind of tailor our offerings for that.

Jessie Schwartz:

I think that's an important part. So from a packaging standpoint, we like to help organizations think about packaging strategically. In 1 of those ways is, okay, how do you standardize packaging in a way that enables automation enables. Really nice palette patterns and so everything just kind of works together. 1 of the things that makes you guys different, which is super intriguing to me is the way that you go to market. So, when you think about traditionally, um, you want to buy a piece of equipment and like you said, it's capex. explain a little bit how you guys think about it differently to kind of enable organizations to more easily get into the robotics that they really need to get to the next level, but the capex just isn't there, you know, sucked up by something else, right?

Saman:

know, it's actually a little different than that. I would say, you know, what a lot of our customers say is, hey, I have capex available. what I need help with is risk mitigation, right? I can spend 500. I can spend, you know, I can spend money on forklifts. I spend money on trucks. I spend money on, you know, air conditioning upgrades. I do that all the time. and I know exactly what I'm paying for, and I know exactly what I'm getting. But when it comes to automation, there's just so much more risk involved because you typically have to pay, somebody to kind of come and figure out what to automate. And then you have to pay them to design something for you. And then you have to pay them for a bunch of equipment, which they're incentivized to upsell you as much equipment as possible. Uh, so that you don't know, Do you need this sensor or can you, can you make do with a cheaper sensor? Do you need this actuator? Can you make do with something different? Typically, if your specialization is making chocolate chip cookies, right? Like. Those are some questions around automation that are just a little bit out of your traditional scope. And so, uh, it becomes really hard for people to feel like they know what they're getting. And then worst of all, they don't know if it's going to work. and so we've seen many, many times where, you know, some piece of automation equipment shows up and it doesn't quite do the thing that You need it to do. And then you're stuck in a never ending battle of change orders, right? I need a change order for this and a change order for that. And, you know, uh, it's not ill intentioned, but you know, the supplier knows they have you, right? That you're stuck because you already spent 500, 000. You're going to pay the extra 50 or a hundred or whatever it takes to get it to work. and so you're stuck paying over and over and over again for something. And then let's say you get to that finish line and the thing starts working. And then six months later, there's some change in your product, or there's some change in your production needs, or, there's more variability in your infeed than you expected. You're stuck again. You have to go back to that supplier, and pay through the nose. and they generally don't like doing that service. We've had many customers who told us, I tried to call so and so automation company after they installed the system. They wouldn't even answer my call. Right. It's not an uncommon situation. And so, um, there's so much risk and you're really betting your career. On something that could very easily go wrong. And so when I look at, why people don't automate, it's generally not because they don't have the cash available to do it, it's because there's just, it's not, you know, there are much more safe ways to spend your cash, right? You can spend it on things that you know, are going to have an outcome. and so, uh, that's something we're trying hard to address.

Jessie Schwartz:

to help educate your customers on the solution. Because you're selling, you're selling the solution. You're not selling components to the solution. You're it has to work. For your customers, because you're in a relationship.

Saman:

Yeah. So we kind of flipped the model on its head a little bit and we said, Hey, why don't I take on the risk? Right? You, Mr. Manufacturer are not super familiar with this kind of risk. I am right. I buy automation equipment and manage it and deploy it all the time. we're managing automation in hundreds of factories today. and so we will happily, you know, Take all the engineering burden and capex burden and deployment burden and maintenance burden and spare parts burden. It's all our responsibility. We drop off that equipment and we are responsible for all the performance of it. And people just pay us an hourly rate for the performance of that system. and if we're meeting our goals, you pay us, you know, 15 bucks an hour or 10 bucks an hour or whatever it is. And if we don't, then you're not paying. and so it does two things. One, it ties your production outcomes. To what you're actually paying out the door, which is nice. But secondly, it heavily, heavily incentivizes us to make sure that thing works and is running, right? If the thing is not running, we're in a lot of trouble. We just spent 500, 000 or a million dollars on equipment and it's sitting around collecting dust. So we're super incentivized to go and make it work. and, that difference of a relationship means We've been able to bring outcomes for folks that generally have felt like it was out of reach.

Jessie Schwartz:

yeah, and so, um, kind of segwaying into how you think about integrating machines with. Human labor and how those work together. Together, I know we've discussed, for example, palletizing. I've seen a lot of people hand palletizing. And the cases are heavy, it is not the best job. And when you think about the current labor. Market and just finding good people and then keeping them is challenging. Um, say a little bit about how to think about equipment interacting and, um, being integrated into a system with. People too.

Saman:

yeah, I think the big challenge for a lot of people is, labor is not easily available, in a lot of manufacturing facilities. There are, 1. 5 million unfilled manufacturing jobs in America today. and what a lot of our customers tell us is their biggest nightmare is if Amazon opens a distribution center down the street, because now all of a sudden all of their workers go. And work there, and they don't want to work in these, these kinds of manufacturing roles because they're typically, you know, much harder. what we found is that with automation, when you reduce some of the most dull, dirty, dangerous tasks. You reduce a lot of, you know, ill effects on your business. Number one, you know, just general kind of worker happiness, right? Like people are not spending their days lifting boxes, getting injured, getting rotator cuff injuries and back injuries from all the things that are associated with that highly repetitive work. Number two, a lot of our customers say, well, I can actually now produce more because I only had 60 people, let's just say, or a hundred people that I can hire. And now I can spread them over more tasks and have automation. Do some of these other tasks. I can run 2 hours a day or 4 hours days or 8 hours a day. and that really increases the overall throughput and utilization of their facility. they've already invested in all this equipment, forklifts and air conditioners and floor space. and if it's sitting idle, right, that's money down the drain. So, uh, what a lot of these folks are realizing is once you put in automation, they can run. Uh, their facilities for a little bit longer, and they can also be more competitive with winning bids from their own customers. and so it generally contributes to the health of the business. And the workers actually love it. You know what? Most of our customers, when we drop off a robot, uh, they'll host a robot naming party where it'll kind of everybody will get together. They come up with, you know, they'll vote on a name for the robot. They'll stick it on there, and it becomes the new coworker in the facility. and so it's a lot of fun.

Jessie Schwartz:

don't want to.

Saman:

Yeah, exactly. Thank you for taking all this hard work.

Jessie Schwartz:

Yeah. Well, and also I think about specifically around a palletizer. If, if you have cases stacked in a pallet and your corners are out of, they are out of alignment, you can actually compromise the entire unit load. Whereas if you're doing that more systematically and consistently, it can improve the way your product goes through supply chain too. So there's a few different benefits to that.

Saman:

Yeah, you can also get real time analytics, right? So we track data on how many boxes were placed. What was the rate? What was the position that was placed in? What were all the issues? if you're, if we're detecting kind of a repeat of a certain type of error, like, for example, a lot of the time for palletizer, the most common failure mode of a palletizer is if the taping machine that's upstream runs out of tape. and so the palletizer tries to pick up the box and it doesn't have any tape on it. And so it can't get suction. So that's a very common scenario. So the palletizer can actually notify you to say, Hey, you know, go and go and check on your taping machine. so there's things like that that can happen. We're adding cameras and computer vision to detect more types of failure modes. Or, or if you told us, Hey, we expect the labels to come in on the right hand side. And our cameras detect that actually the labels are all on the left hand side. We can adjust for that, but also we'll inform you so that you know there's something going on upstream. and so all of those kinds of things, you know, having intelligence built into your production line is going to be quite helpful in the long run.

Jessie Schwartz:

Yeah, kind of to go to the next topic of. Intelligence and where the industry is going in the future. Um, like, you just mentioned being able to provide additional information, not just. Stacking a box on a palette also, where do you see. This industry going in the next. Few years, especially as we think about machine learning. So I want to say AI, but it's, it's kind of, it's data driven, um, decision making within equipment. Um, where do you see the industry going?

Saman:

Yeah, I think that the capabilities of robots are increasing dramatically every day right now. they're Obviously, there's like the kind of really cool things you see on YouTube, right? Like humanoid robots doing back flips. but you know, in a more practical sense, there's actually a lot of things that, have come out of that research that are quite useful, uh, in manufacturing facilities. I think, like, for example, on the computer vision side, it's enabling a lot of, like being able to handle a lot more variety than previously possible. So it used to be that, you know, a robot could only handle. A very kind of small range of products. and now, you know, we can do, for example, mixed case palletizing or mixed case deep palletizing, which is actually a really complicated technical problem because to palletize mixed cases, you have to, you know, you're playing Tetris basically in 3d, uh, which is, which is, quite a complicated task. or, uh, you know, when it comes to case packing, traditionally case packers were designed for, you know, a single product or maybe a little bit of a variety. But, you know, these are super expensive pieces of equipment that, that were highly customized with hardware to do specific tasks now because of things like computer vision and kind of adaptive gripping and force feedback, you can actually design case backers that are much more flexible for a wide range of products. And. Similar to the way that a human does it, like a human doesn't care if you're doing vertical or horizontal case packing, they can just do it. and, I think the idea is, you know, robots are getting closer and closer to being able to be flexible like that, where, it can adapt based on your needs. so depending on the rate, depending on the product, right, there's still a lot of constraints there, but we're seeing, you know, the, the edge of what's possible is really moving forward very quickly. and, uh, what that means for manufacturers is there's going to be a lot more. Things in their facility that they can start to automate. Yeah, and then plus there's also like the, the, movement side of things, right? Like Autonomous mobile robots and ground vehicles, right? Like kind of automated forklifts. I mean, it's stacking and racking systems. So there's all of these different, uh, variety of, of, of, robots are starting to become. possible for, for manufacturing.

Jessie Schwartz:

Yeah, because I've seen robots take the place of conveyors in a sense where they're picking up. They're delivering an empty case to a line. They're collecting widgets and then they're taking that case to the warehouse where it's taped and palletized. And, when organizations

Saman:

super high, then that's totally doable.

Jessie Schwartz:

Yeah, yeah, exactly. And, um, as organizations grow or manufacturing grows, sometimes you can't move everything around and have it makes complete sense. Again, right things are just in place and so, there's also some flexibility that people could leverage, even from that standpoint. Um. Then, as we think about, like, equipment upgrades, or even equipment maintenance, we're kind of moving into a space where formic and other equipment manufacturers can actually access and troubleshoot equipment. Remotely, right? can you say anything about how. Equipment maintenance and troubleshooting has changed in the last few years. And if you see that as a space. That will continue to evolve.

Saman:

Yeah, I mean, I think historically it's been, there's somebody sitting in the back room, you know, with a lathe who is responsible for fixing everything. Right? And, uh, that's,

Jessie Schwartz:

a hammer to

Saman:

Yeah, maybe a hammer, you know, some, some, uh, you know, oils and things like that, but it's, you know, very, very tough, uh, for them to deal with the kind of increasing complexity of things that they need to manage. you know, when it comes to pure hardware, that's not too big of an issue, but if you need them to also learn how to program a robot, that's certainly a much higher bar. and much more difficult tasks. So what we're trying to do, was what formic does is we, we take care of all the maintenance and service across the board. and the reason why we do it that way is, uh, we look at other industries where kind of new technology adoption has started to happen. One that comes to mind a lot is, is like servers and data centers, right? So if you ask, you know, how many manufacturers actually run their own email servers, The answer is probably very close to zero, right? Or, you know, as a percentage, at least. and the reason is because everybody realized, hey, it's way more efficient. If I just let Microsoft or Google or whoever manage my email for me, right? They'll, they'll manage the servers. They'll manage the air conditioning. They'll manage, you know, swapping out hard disks. If it needs, they'll manage all of the redundancy and the network connection. And I can just use it. Right. Uh, and like, I don't have to become an expert on how to set up and manage an email server. I can just use it. and I think that's similar to the kind of mentality that we're bringing to automation is like, you know, Microsoft or Google can invest a lot more in building tools to make it easy to manage servers because they're managing service for everybody. Uh, right. Yeah. And on the, on the flip side, like if you're a manufacturing facility, for you to invest in like building software that's customized to manage your equipment. It's not really likely to happen. but because we're, we're managing robots on behalf of hundreds of facilities now and growing every day. We are investing very heavily in building tools and systems and software for predictive analytics, remote management, maintenance, fleet monitoring. And we're building a network of technicians across the whole country that can show up with spare parts. We're able to keep spare parts and inventory that are common across a lot of different customers. So our carrying costs are quite low. So overall, what we, what we end up with is this situation where we're kind of the central owner and operator for all these robots, we can deliver a much higher, uh, kind of performance standard than a lot of our facilities could, if they did it on their own. So our trailing 12 months, yeah. Performance uptime on our hundreds of deployed systems is 99. 8%. which is something we're really, really proud of. I mean, it's a constant battle every single day, you know, uh, to, to, to fight that, but we track, you know, exactly what were the number of minutes down on every single system, and our team is constantly, you know, adjusting resources to make sure that we can hit, uh, hit those performance numbers.

Jessie Schwartz:

Well, like you said, it's your, it's your specialty, right? So, even as things are being upgraded and new tech is coming out, that's your specialty. So you're going to be the ones that know what's going on, right?

Saman:

Yeah. Yeah.

Jessie Schwartz:

And I think as we see manufacturing again, like, it's pretty tight on margins and we have to figure out collectively as a community of people working in and for manufacturing ways to get better and to optimize. And I think this is, this is a cool, cool way to do it where you're specializing in the robotics piece and being the best. So you can help. Clients really manage their margins and. Not worry about that equipment.

Saman:

Yeah.

Jessie Schwartz:

That's cool. All right. Any other burning points that you want to talk about for a wrap up?

Saman:

yeah, I mean, I think the thing I would encourage, all your listeners is, is don't wait when it comes to automation, you know, like it doesn't have to be for me. There's lots of great options out there. and, you know, I think. Like, it is a bit of a, it is a bit of a struggle to get to the finish line there, but I think if folks, uh, are considering it, I think. Really the longer you wait, the harder it gets. and so it was really important to just kind of bite the bullet and, and, and get it figured out. It'll make your life easier down the road.

Jessie Schwartz:

Or have the conversation, right? Like, start the conversation. You don't need to make a commitment, but. Be curious about it and figure out what it makes sense for the organization. Um, to do it and what needs to be true in order for it to be something that makes sense. And you guys are available to help. And like you said, yeah, do do research, compare a couple different options. And that's kind of the whole purpose of having these conversations is to really enable people who are curious and they want to ask educated questions to kind of get a taste of what the topic is and then have those strategic conversations for their company. So we will definitely put your contact information in the show notes as well as some white papers for folks to kind of look through. Maybe answer some questions or come to you guys with those questions. Either way is amazing. And I really appreciate you taking the time to join us today.

Saman:

Thanks for having me. Thanks for sending this up. This was great.

Jessie Schwartz:

Thank you so much for tuning into today's episode. If you found the content helpful, please be sure to share your comments with me by leaving a review so that I can keep the topics coming your way. If you haven't already followed me, click subscribe on your podcast app. So you get notified the next time we release a show. If you have packaging issues, you want to talk about contact us via our website at www.strategicpackagingpartners.com and click on the contact us page. Thanks everyone.