Food sector manufacturers need flexible automation. We are seeing an interest in converting to robotics from companies that are looking for financing.
— Michael M. Alch, Senior Vice President, PNC Equipment Finance.

The food processing industry thrives on precision equipment that helps facilities meet strict quality, health and safety requirements. Inserting the latest industrial robots into your production line can generate new productivity opportunities, save money, improve quality control and modernize your manufacturing processes. Advantages can include lower overall labor costs, a more stable production line during times of low unemployment, and reduced risk of product contamination and employee injuries.

A Final Frontier?

This wasn't always the case. Food processing has been described as “one of the final frontiers of robotic automation."[1] Older generations of industrial robots lacked the sophistication to accurately identify, select, handle or modify objects with asymmetrical bodies or delicate materials, such as produce, meat and other raw agricultural products.

One of the earliest practical applications was cake decorating, perhaps because cakes have relatively simple shapes. Eventually, robotic technology improved to where “pick and place" machines became especially popular, saving labor costs because robots can work faster than human employees.[2]

Recent advancements have created even more opportunities. Flexible grippers allow mechanical hands to hold delicate produce items without causing damage. Vision sensors make automated butchering possible.[3-4] “Some machines can even create a pizza without any human intervention."[5]

Robots can also keep your facility cleaner. They are far less likely than humans to contaminate products or accumulate dust and, when designed properly, can even resist bacteria.[6]

In fact, another common usage is “clean in place." Like employees who put down their tools and pick up their spray bottles at the end of a shift, robots can be programmed to periodically stop production activities and begin cleaning the facility's equipment.[7]

Food Processing's upstream companion sector, farming and agriculture, has similar challenges and opportunities, such as picking non-identical units of produce. Researchers in Shropshire, England, for example, sowed and harvested a field of barley in the fall of 2017 using nothing but robots."[8]

Financing

Obtaining financing for a robotic transformation can be easier than you might think. Despite its cutting-edge technologies, the lending industry does not generally consider industrial robots to present a higher credit risk than other kinds of industrial machinery.[9]

So, don't worry about memorizing technical robotics industry jargon to impress prospective lenders. Just assemble the same package of information that you would normally submit when seeking financing for other business purposes. “We do prefer a blueprint of manufacturing lines to understand the design of the equipment so we can see how the equipment is laid out in the facility,” according to Alch.

While most of your costs will likely be for the actual hardware, certain soft costs will add to the initial purchase price.[10] When reviewing a proposal from a manufacturer, evaluate carefully any soft costs. “Financing the installation and customization of assets that are not actual equipment is more risky from a lender's standpoint,” says Alch. “Financing is preferred to cover only the hard costs, the hard asset.”

Given that robotics technology is a growing and rapidly evolving technology with periodic advances in hardware and software, consider leasing as a potentially cost-effective option. “You are renting the tech vs. owning which will help when/if the tech is out of date,” notes Alch. “There are ways to update the tech throughout the term of the lease. And can obtain new equipment easier as technology changes.”

What to Discuss with your Banker

You may find it useful to collaborate with your banker as soon as you begin considering acquiring robotics. You’ll want to discuss:

  • How much you expect to spend on initial set-up costs, such as installation, systems integration, training and consulting. Get detailed estimates from any vendors who might be involved with the project.
  • How much you anticipate spending on ongoing costs, such as training new employees, hardware maintenance and software upgrades. Since this is a rapidly-advancing tech sector, you can expect to periodically upgrade, fix or replace the apps that drive the robots.
  • How long it will take to achieve a return on investment. ”That information is typically provided by the manufacturer,” according to Alch. “It all depends on the type of asset financed. Some equipment has a faster ROI that others.” 

Ready to Help

PNC Equipment Finance offers highly focused financing team with extensive experience in the food and beverage processing industry. We can facilitate the lease or purchase of advanced technology from start to finish. For more information, visit pnc.com/ef.