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Exploring the Implications of Nestle's New Modular Factories

Posted by SugarCreek

Aug 7, 2014 10:00:00 AM

chocolate-1According to a recent release from Nestlé, the company is preparing to adopt a new factory construction method that will make the building process faster and more cost effective. In light of this announcement, other manufacturers are left to wonder whether this new construction method will prove to be the latest in a long line of innovative food technologies from the veteran manufacturer or if the limitations of the new model will prevent widespread adoption.

About the New Design

Nestlé's new factory design is modular in nature, which means that each factory will be assembled from several pre-made component sections which could include anything from changing rooms, boilers, and generators to other basic factory components. 

This method of construction offers several notable benefits over the traditional model.

  • Expedited completion. The traditional brick-and-mortar factories constructed by Nestlé require an average of 18 to 24 months for completion, while a modular factory had the potential to be fully assembled and operational within 12 months.
  • Lower costs. Nestlé reports that its new factories can be built for approximately 50 to 60 percent of the cost of a traditional factory—a significant cost savings.
  • Simplicity. Modular factories will be easy to assemble and could be used to create production sites in virtually any location, including underdeveloped countries where building materials and expertise are in short supply.
  • Flexibility. Nestlé's modular factory design allows factories to be moved, repurposed or reconfigured easily, even after they have been assembled.
  • Lower risk. Because modular factories don't cost as much to construct, Nestlé can break into challenging or unpredictable markets with minimal investment.

According to representatives from Nestlé, the company plans to use this new construction concept to build factories in Asia and Africa initially, where conditions are more challenging. Building factories in these locations will allow Nestlé to move closer to both raw materials and international customers

And the new construction method, which will allow Nestlé to save time and money, is the latest in a pattern of innovation.  In the past, innovative food technologies were often developed to overcome obstacles or meet the needs of Nestlé factories in far flung locations.

Limitations of Modular Factories

Although modular factories will offer several benefits to Nestlé, there are certain limitations to these facilities as well. 

They will not, for example, be able to fully replace the traditional brick-and-mortar factory as it is not currently possible to use modular factories to produce complex products. At the time of publication, modular factories will only be able to complete simple tasks, such as mixing dry goods and repackaging. Because of these limitations, Nestlé will still need to maintain a number of standard construction factories in addition to the modular factories that are built.

Modular Factories in the Future

After Nestlé's announcement, other manufacturers will surely consider adapting modular factories to their own purposes. However, the current limitations of these factories may discourage their wide-scale adoption. 

Unless a manufacturer is attempting to enter a market where materials are scarce or it is otherwise challenging to build standard factories, the time and money saved by assembling a modular factory may not be enough to make up for the inability of the factory to produce complex products.

Furthermore, even if manufacturers do decide to use Nestlé's modular construction methods to build a portion of their factories, they will still need to rely on traditional building methods for some of their locations in order to continue making products than cannot be manufactured in a modular factory.

In the future, however, it may be possible to design modular factories that are capable of handling more than just repackaging and basic mixing. If this occurs, the cost savings and increased efficiency of modular factories will most likely entice manufacturers on the lookout for innovative food technologies. 

But until this occurs, modular factories cannot completely replace standard brick-and-mortar construction.

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Written by: SugarCreek

Sugar Creek prides itself on its authentic culinary expertise. With nearly 50 years in the food manufacturing business, we know what Americans want to eat.

Topics: Technology, Trends