P.MDC.0067 - Quantifying the opportunities for beef industry automation and productivity value proposition to stakeholders

Summary

Greenleaf enterprises has provided an updated ex-ante BCA modelling for beef automation, where such automation is based either on modules that can be installed individually or in combination. This approach is consistent with the lamb automation approach (LEAP III primal cutter, LEAP IV middle machine etc).

Objectives

The project design is to achieve the following objectives:
1. Using previous value propositions, create an updated CBA model (Excel spreadsheet based) for each beef automation module based on the current design thinking around beef automation. CBA's for each module may also be combined into one industry benefit analysis so as to give an overall beef automation benefit.
2. An overall report covering the above will also be developed that can be provided to industry so as to support the case for further R&D funding investment and commercial uptake of beef automation modules.
3. Undertake validation work with 2-3 strategic processors and appropriate automation suppliers.
4. Consider factors that have impacted both positively and negatively on lamb industry automation development to inform return on investment assessment frameworks for future beef industry automation.
5. Identify new value opportunities and prioritize module development ROI based on likely development success and likely adoption.
6. Consider behavioural economic factors influencing future beef industry automation development and adoption.
7. Develop fact based assumptions on the rate of adoption of beef automation based on ex-ante value propositions.

Key findings

A framework was developed to address the industry review objectives to structure and guide site visit investigations.

Currently, there is not enough data to determine the throughput benefits of beef automation, therefore there has been no throughput benefit included. Based on previous lamb automation systems,, there has been a considerable throughput increase of up to 28%, with no additional labour. As the data becomes available, the data for throughput benefits will be adjusted accordingly.

The cost benefit results obtained through the project are associated with a range of cuts being completed for each of the three main components being considered. For each of these systems there are smaller and larger systems which will suit the medium and large throughput plants respectively.

Benefits to industry

The industry benefits of automation will not only be limited to monetary gains through cost-cutting and increase in efficiency. More importantly, lamb automation and beef automation also challenge the Australian red meat industry to become a global technological leader in meat processing technology. Companies such as SAR will be able to utilise the technical know-how gained in designing and implementing domestic automated systems to export to other markets around the world, thus creating a new industry driven by technology.

The industry environment for the next five years is predicted to become more competitive, as international competitors such as Brazil and United States continue to catch up to Australia’s quality and standards. However, Australia’s wages are expected to increase further, prompting further erosion of competitive advantages. Thus, the automated solutions in the next five years should be focused on:
• medium value cuts
• more difficult cuts
• more AI and machine learning driven automation
• more flexibility in cuts and the ability to change product specifications
• more data capturing from automation and using data for decision-making
• more trickle down of technology from large plants to medium and small plants.

MLA action

As the price of technology drops, in the next five years, more ambitious automation projects involving more difficult cuts can be implemented. The Horizon II projects will be based on lessons learned and technology developed from the Horizon I projects. It is also essential for Horizon II modules to be backwards compatible with Horizon I modules, so that processors can theoretically integrate the automated modules with minimal compatibility issues.

Future research

The industry benefits of automation will not only be limited to monetary gains through cost-cutting and increase in efficiency. More importantly, lamb automation and beef automation also challenge the Australian red meat industry to become a global technological leader in meat processing technology. Companies such as SAR will be able to utilise the technical know-how gained in designing and implementing domestic automated systems to export to other markets around the world, thus creating a new industry driven by technology.

Currently, Australia is already the global leader in lamb automation technology. Therefore, it is a logical next step to extend the lead further into more challenging meat types, and cuts. The Three Horizons strategy proposed by Greenleaf Enterprises can act as a macro-level blueprint in guiding industry towards beef automation, but the industry should be in no way limited to only these recommendations. The pace of innovation in manufacturing around the world, and the development of AI and machine learning technology have the potential to revolutionise red meat processing. Therefore, the Australian red meat industry must become more agile and innovative, and not become paralysed by inaction.