The Co-Packaging Industry’s Secret to Scaling Production Without Scaling Headcount
The manufacturing and co-packaging industries are at a crossroads with an aging workforce and a declining labour force. Statistics Canada predicts that by 2024, 23% of Canada’s working population will be 65 or older, either retired or planning to retire soon.
The CME’s 2024 Manufacturing Workforce Report also highlights that a recent study in the London economic region estimated that more than half of all job openings in critical manufacturing roles will be due to retirements by 2031.
As this demographic shift continues, sectors like food processing and many other industries will face ongoing staffing challenges, struggling to find skilled workers to meet production needs. This shift is leaving manufacturers and co-packagers understaffed, struggling to keep up with growing demand, and forced to find new ways to stay competitive.
Thankfully, industrial automation stands the much-needed solution that allows businesses to expand production without expanding headcount.
Automation- The Path to Efficiency and Growth
Automation provides a solution to rising production demands amidst labour shortages. By boosting efficiency, reducing manual workloads, and enhancing quality control, automation helps businesses adapt to evolving challenges. The reality is that certain jobs no longer appeal to the workforce, and automation allows people to focus on their highest and best use. In addressing labour shortages, automation also creates more fulfilling jobs for workers.
Despite its benefits, the upfront costs of automation have often been a significant barrier to adoption.
Rather than viewing automation as a daunting capital investment, companies should have easy and flexible access to capital, making business growth simple, fast, and profitable,” says David Schincariol, Chief Executive Officer of Modularex.
Modularex is on a mission of making this possible with Automation-as-a-Service (A³S)—a model that eliminates the need for significant capital expenditure and allows businesses to scale at their own pace.
Three Key Steps to Implementing Automation Efficiently
Businesses looking to automate should consider these three significant steps:
1. Set Specific Goals for Automation
Many businesses start their automation journey with a vague desire to grow. However, setting clear, specific goals helps focus the automation solution on areas that will deliver the biggest impact.
“I often ask my clients, are you looking to increase throughput, reduce manual errors, or speed up delivery times? Each of these goals requires a tailored approach to automation”, says Schincariol.
If a packaging company aims to increase throughput, adopting robotic arms for packaging lines can significantly boost productivity. Companies that deployed packaging robots saw an average 5.1% increase in productivity, particularly in industries that were in the early stages of adopting automation.
The global packaging robots market is expanding and it is driven by the increasing need for productivity and efficiency in packaging operations. In addition to that, the market is projected to grow from USD 5.6 billion in 2022 to USD 15.73 billion by 2032.
2. Evaluate Existing Production Processes
A key point made by Schincariol was that “every business must realistically evaluate their current production process to identify where automation will deliver the best results. Are your team members spending too much time on repetitive tasks, such as packaging, sorting, or material handling?”
This is where automation can make a significant impact.
Modularex takes automation one step further by producing its proprietary technology which integrates into robotic systems and acts as the “intelligent brain” of your production line. NERV (Networked Environmental Real-time Value) technology provides real-time monitoring and predictive analytics for robotic equipment. NERV helps prevent downtime, optimizes every step of the process and ensures that the equipment works at peak efficiency.
3. Modular Automation for Growth Without Constraints
Traditional automation often requires significant upfront investments and complex upgrades to expand production. Modularex’s modular approach, however, offers flexibility and adaptability. “Imagine your business growing, and as it does, your production requirements evolve. You’ll need to upgrade specific components, like end effectors, without being burdened by outdated equipment or excessive costs,’ says Schincariol.
Modularex’s pay-as-you-go model allows businesses to access automation that adapts to their changing needs. By shifting the cost from a capital expense to an operating expense, one can freely invest their budget where it matters most.
Automation vs. Labour Costs
Automation isn’t just about boosting productivity—it’s also about improving profitability. The cost to lease a robotic arm under Modularex’s A³S model can be similar to that of hiring a single manual labourer. The difference? One robotic arm can work 24/7, produce with higher accuracy, and easily adapt to different production needs.
According to industry data, Canadian manufacturers face an average wage of $25/hour per worker. In contrast, the cost to lease a robotic arm can be significantly lower over time, especially when accounting for increased output and reduced errors.
While automation integrates machinery to enhance speed, reliability, and quality, it also encompasses logistics, adaptability, and responding to market demands. The ability to pivot quickly when orders change, manage cash flow, and position CAPEX for growth are all part of a true automation solution—one that Modularex delivers both on the factory floor and in back-office operations.
Three Key Steps to Implementing Automation Efficiently
While the benefits of automation are clear, many companies are hesitant to adopt new technologies due to perceived risks or costs. The World Economic Forum digital competitiveness report indicates that Canadian businesses tend to be cautious ranking lower in technology adoption compared to counterparts in the U.S. and Europe.
“This mindset could hold companies back from achieving true growth potential”, adds Schincariol. Technology adoption isn’t just about reducing costs, it’s also about enhancing competitiveness. With Modularex’s solutions, even small businesses can start automating, taking advantage of the ease of access to scalable solutions. That Is because robotic equipment that were once ridiculously expensive, are now accessible through leasing models that align costs with productivity gains, much like a car payment.
The return on investment becomes evident within months, especially when considering the increase in throughput and reduction in errors.
