Fonterra is the largest company in New Zealand in terms of economic impact, and produces about 30% of the world’s dairy exports. Its size gives it many benefits – economies of scale, employment, high turnover, and an avenue to solidify New Zealand’s place as a country that produces high-quality products for local and overseas consumption.
But being as big as it is, also introduces a few issues. Not least of which are trying to find better ways to streamline production processes, save on power, and one of the biggest costs – maintenance of the company’s plant, infrastructure and tanker fleet.
Dave McPherson (Infrastructure & Global IS Engagement Manager at Fonterra), after attending the first Industrial Internet 4.0 Summit in Sydney in 2017, commented: “I was trying to get a handle on all the hype around IoT and Industry 4.0, smart manufacturing – all these buzz words that were relatively new to us and we were trying to get a handle on where we could drive some value from the stuff,” he said. “In particular, what we were really trying to find was what people were doing in this space currently and how we could leverage their learnings to speed up our journey.”
From knowing very little about the Internet of Things (IoT) 3 years ago, the company has now embraced the concept at so many different levels and save itself a lot of money. It was a matter of trying to find out what they could do and how they could implement processes into what they were doing. It didn’t take long.
“I have plenty of examples across our supply chain where we are using IoT.” he said. “What I call new IoT is gear supplied by third-party vendors, who are providing us low-cost, battery-powered solutions, which are connected by dedicated networks such as Sigfox, rather than traditional wireless networks. Alternatively, we are dealing with new vendors who are traditionally not in our supply chain.”
“There is a huge increase in availability of these low-cost devices, with new vendors coming to market all the time. It has given us a lot of opportunities to grow in this area,” he said. “On the farm we are seeing a rapid growth in the adoption of IoT sensors. Most of this is to do with compliance and sustainability as well as productivity and animal health and welfare. It all starts at the farms. Farmers, like a lot of industries today, are having to be a lot more compliant from a sustainability perspective – wastewater, effluent – everything we manage on farm needs to be measured or monitored.”
A big issue on all farms is the treatment of the aforementioned wastewater and effluent. Cow herds produce a lot of both and New Zealand has a lot of regulations when it comes to how these by-products are monitored and treated. IoT-enabled devices offer the perfect solution on the ground.
“One of the more interesting projects we have done recently is effluent management,” said McPherson. “We own the farms around most of our factories and that is for the purpose of getting rid of our wastewater. We’re tied by councils about how we irrigate the waterways. We set up a project whereby we used irrigators that were pulled out manually across the field. When [the irrigators] are pulled out we have to be sure that they are not getting too close to waterways to make sure the effluent doesn’t go where it is not supposed to go. It got to a point where one of our plants got shut down for a months because we weren’t doing a good job of it.
“We deployed GPS trackers on the irrigators, and, coupled with weather information, wind speed and wind direction. The pumps that control the irrigators couldn’t be shut down quickly if they started spraying effluent into the waterways.
“We came up with a very cost-effective solution by using new IoT sensors from a company we had never dealt with before. They came up with a real robust solution, which we learned about very quickly, and we were able to get that plant up and running again.”
Then there is the milk itself. The temperature of milk is regulated by the New Zealand Ministry of Primary Industries for the dairy industry. Farmers need to get the milk down to four (4) degrees Celsius within four hours of starting to milk the cows and two hours within completion of the milking. The longer the milking takes, the longer it takes to cool, which then shortens the window Fonterra has to pick it up from the farm gate. With some new sensors, it is possible to measure the temperature in real time in the farm-based vats where the milk is initially stored.
“That information along with the volume and the fact that the agitators are stirring that milk will come back to us in real time,” said McPherson. “[This is] a lot of data pinging off 10,500 vats every five minutes, but it gives us a real-time picture that may even potentially stop us picking up milk that we otherwise wouldn’t want.”
But it still needs to be kept cool when it is being transported. Fonterra put some sensors on the tankers that came back with results that they didn’t expect.
“Our tankers are not refrigerated and our storage factories are not refrigerated. It is critical that we try and get that milk temperature down on the farm as soon as possible and keep it there before it gets processed. Where we measured the temperature in transit we used these little sensors which were very cheap,” he said. “We measured all different points of the tankers. The top, where we thought there would be the most impact from a heating perspective with regards to the sun. It turned out it was the heat coming up from the road – it was the bottom of the barrels that were getting the most heat between the pipework and the cab and the barrel and the truck.
“Once we found these hot spots, we worked with a couple of companies on coatings we could put on the tankers to eliminate the heat. We’ve had about six different coats sprayed onto a number of tankers and using sensors we are starting to see some great benefits, which has led to zero increases in temperature,” said McPherson.
Some farmers are even going one step further by monitoring the cows with wearable sensors. “[Farmers] can tell when [the cows] are drinking or eating, how long they are spending standing up eating,” he said. “It also tracks their temperature, which will give warning signs of when the cows are getting sick – all of these things affects productivity of the farmers.”
A lot of companies are also looking at condition monitoring, otherwise known as predictive maintenance, as it relates to the IoT. Fonterra spends about $180 million a year on maintenance of its manufacturing plants. Given the seasonal nature of its business it has a 100% of the company’s assets running at 100% of the time for a couple of months a year at peak. Then it becomes less intensive.
“Our maintenance programme is usually done in winter and we pull every pump, motor and valve and replace bearings just because we’ve done it for years,” said McPherson. “With the IoT sensors, we should be able to save a lot of money by finding out if we actually need to do it in the first place. For us, to be able to predict the failure and then allow downtime in our plants to do the maintenance means we don’t have the overhead of a huge number of people working across our manufacturing facilities in the off-season.”
Other areas where the IoT is making an impact is in the supply chain and dry storage. Again, temperatures have to be measured in the storage areas, and with New Zealand summers becoming hotter, it is increasingly becoming an issue. The company also has small magnetic devices that are fitted in the hinge of containers. When it is closed and turned on it is sending out GPS coordinates of the location of the container, temperature inside the container, humidity and whether there is light getting into the containers.
“You get real-time alerts when these containers are being opened somewhere along the supply chain,” said McPherson. “Sometimes along the customs borders. Sometimes when we don’t really want them to be by someone who has stolen a container. Sometimes, we’ll get a customer complaint before it turns up damaged. These sort of devices are allowing us to track wear and tear in the supply chain where that might happen.”
The company recently did 200 trials of a random number of containers going to various places around the world. The containers were pinging out data giving locations and other information that was captured at the same time. It’s helped Fonterra identify issues that were going on that it otherwise wouldn’t have known about.
“For example, we’ve had containers sitting in Chicago in the winter time in -9 degrees and customers have complained about what that has done to the product,” said McPherson. “Other scenarios where we’ve had damages to containers or pallets where they have opened it up and bags have burst or the pallets are damaged and customer complaints have come through quite regularly. That is a great little device that gave us a head’s up when there was a problem.”
Fonterra is an example of a company that less than three years ago, had hardly heard about the IoT, or what it would mean for its business. Now, the IoT has become part of its everyday life of doing business.
And what of the future? “Increasingly the challenge for us now, and a lot of companies, will be across the supply chain where you are pulling data through these IoT sensors to these third-party cloud solutions,” said McPherson. “The real challenge will be how we integrate it back into our systems.”
And what is McPherson’s final word on the IoT and what it means for doing business? “A lot of this is around changing business processes, taking people on the journey, getting them to understand the reason why traceability is important,” he said. “A lot of people think it is a Big Brother thing. In reality, it is just the future of what we have to do with this traceability across our food chain and that, in the long run, is a good thing.”
Extracts and interview from: www.foodmag.com.au; March 5, 2019
New Zealand-based Fonterra is a dairy co-operative born in 2001 when the country’s two biggest co-ops – Kiwi Co-operative Dairies and New Zealand Dairy Group – merged with the statutory body, the New Zealand Dairy Board.
Fonterra is the biggest dairy company in the world with impressive stats: owned by 10,500 farmers, employs 1600 tanker drivers, and 22,000 global staff, 85 million litres of milk picked up daily, 22 billion litres of milk processed every year, $17 billion in revenue. Fonterra is at the forefront of NZ’s global exports for over 50 years, and make up 25% of NZ’s exports.
More info at www.fonterra.com/