The new playbook for food manufacturing: Automation, efficiency and self-sufficiency

Rising demand for packaged foods, combined with supply chains that remain vulnerable to geopolitical tensions, climate disruptions, and fluctuating production costs, is pushing food manufacturers to rethink how they operate. Instead of relying on traditional cost-cutting measures, companies have began investing in technologies and strategies that strengthen operational resilience. Automation, digitalization, energy-efficient technologies, on-site production of critical utilities such as nitrogen, and local sourcing are emerging as essential components of modern food manufacturing.

 

Together, these strategies allow companies to reduce their dependence on external suppliers, lower the risk of production disruptions, improve product quality, and achieve long-term cost savings, even amid ongoing uncertainty.

 

“This combination of resilience and stability is proving essential as the industry navigates a rapidly changing landscape. Manufacturers who invest in these capabilities now are the ones best placed to turn disruption into a competitive advantage,” says Nalin Amunugama, General Manager, BOGE Asia Pacific.

 

 

Nalin Nalin Amunugama, General Manager, BOGE Asia Pacific

 

Smart manufacturing has become the industry standard

In food manufacturing, the smart factory standard is shifting focus, from sheer output speed to precision, safety compliance, and efficient use of raw materials. Because food production involves highly perishable goods and complex regulatory requirements, digital transformation depends heavily on real-time visibility, automated tracking, and rigorous environmental controls. New technologies like robotics, artificial intelligence, and machine vision systems, and the Internet of things (IoT) help optimize operations and reduce the reliance on manual labor. With real-time data, operators can spot and resolve production bottlenecks early. Predictive maintenance also serves as a critical asset, preventing expensive equipment failures before they occur.

 

Global industry leaders are already realizing these benefits; for example, Nestlé has deployed automation, digital controls, and advanced data analytics across several of its Asian factories to boost productivity while maintaining strict quality standards. Thai Union Group, one of Asia's largest seafood processors, has implemented automation and digital manufacturing technologies throughout its processing and packaging facilities in Thailand. By combining automated production with IoT-based monitoring, the company has enhanced operational efficiency. The group recently announced a strategic partnership with Wholechain, a leading supply chain traceability and transparency platform, to support the global rollout of standardized, end-to-end digital traceability across its global seafood operations – enabling a new level of supply chain visibility from vessels and farms through processing and distribution, to retailers and foodservice operators, and further develop transparency for consumers.

 

 

Thai Union supports end-to-end digital traceability across its global seafood operations. (Source: Thai Union)

 

 

On-site nitrogen generation for operational resilience

Nitrogen generation has become a defining trend in the region's food manufacturing industry, driven by the growing demand for compressed air and nitrogen gas solutions. One significant shift is the adoption of on-site Pressure Swing Adsorption (PSA) nitrogen generation systems. Nitrogen plays a critical role in food manufacturing, particularly in packaging as it helps preserve freshness by displacing oxygen, which slows bacterial growth and prevents spoilage.

 

Historically, companies manufacturing consumer products have acquired the gases they need in big tanks or cylinders. But this can cause problems; for example, when trucks cannot get to the factory, energy prices fluctuate, delivery schedules don't align with the factory's needs, or tank leasing costs are high. These issues can prevent the factory from operating smoothly. Instead of relying on delivered gas, generating nitrogen on-site offers a more reliable and cost-effective solution. When companies make their own nitrogen from compressed air, they can access supplies on demand, without having to wait for delivery.

 

“Having a reliable source of nitrogen is crucial. On-site PSA nitrogen systems can produce nitrogen with purities as high as 99.999%, and this is exactly what's needed for demanding applications. By doing so, these systems help reduce waste and improve production flexibility, especially when demand is unpredictable,” Nalin says.

 

On-site nitrogen generation is also better for the environment. For one, it eliminates the need to regularly transport gas cylinders or bulk liquid nitrogen, reducing carbon emissions from logistics. This is a significant step towards sustainability, and an important consideration for companies looking to minimize their environmental footprint, Nalin goes on to say.

 

BOGE Kompressoren, a leading supplier of air compressors, has teamed up with its subsidiary INMATEC to manufacture PSA nitrogen generators. By combining its compressed air systems with INMATEC's gas separation technology, they provide on-site, continuous production of high-purity nitrogen without relying on external cylinder or liquid deliveries. The systems are specifically designed for the food and beverage industry, where hygiene and reliability are top priorities. They help manufacturers optimize operations while still maintaining high standards of food safety and quality.

 

The INMATEC-BOGE Kompressoren PSA nitrogen generators provides on-site, continuous production of high-purity nitrogen without relying on external cylinder or liquid deliveries. (Source: BOGE)

 

 

Building stronger supply chains through self-sufficiency

Supply chain resilience has become a strategic priority for food and beverage manufacturers throughout ASEAN. Climate volatility, transportation bottlenecks, currency fluctuations and geopolitical uncertainty have highlighted the risks of relying heavily on imported ingredients and distant suppliers.

 

Global companies are now choosing to work with local suppliers and farmers to get the things they need, which, in turn, help make supply chains shorter and stronger. The Yili Group’s largest self-built smart factory in Southeast Asia, located in West Java, produces the company's popular Joyday ice cream brand. Together with its Thailand plant, it serves as a dual hub for the region, holding both Halal and BPOM certifications to supply local and regional markets. The facility uses advanced technologies, such as robots and specialised internet-based systems, to source raw materials locally and sell products to customers in the same area. This enables the company to serve the market more efficiently and quickly.

 

The Yili Group’s self-built smart factory uses advanced technologies to source raw materials locally and sell products to customers in the same area. (Source: PT Yili Indonesia).

 

 

Indonesia's PT Kalbe Farma Tbk is taking a similar approach by increasing its domestic procurement for nutritional and functional food products. The company is using more locally-sourced ingredients like dairy, grains, and herbal extracts for its Kalbe Nutritionals division. This move helps reduce the company's reliance on imported agricultural products and also supports the growth of local agriculture. By doing so, PT Kalbe Farma Tbk is promoting domestic development while also benefiting its own business.

 

Meanwhile, Jollibee Foods has strengthened supply chain resilience through its Farmer Entrepreneurship Program (FEP) - sourcing onions, tomatoes and other agricultural products directly from Philippine farming cooperatives. By reducing reliance on multiple intermediary suppliers, the company gains greater visibility over its supply chain while providing more stable market opportunities for local farmers. Local sourcing strategies also contribute to sustainability objectives by reducing transportation distances, lowering logistics-related emissions and creating more responsive agricultural supply networks capable of adapting to highly-volatile market conditions.

 

Bullet-proofing the industry

The food industry is likely to continue facing significant challenges in the years ahead. Supply chain disruptions, rising production costs, labor constraints, and growing sustainability expectations will keep shaping investment decisions across the sector worldwide, and these pressures show no signs of easing. Manufacturers will need to rethink their supply chains, find ways to reduce costs without compromising quality, and embed sustainability into how they operate.

 

By adopting automation, digital technologies, and smarter sourcing strategies, companies can respond more effectively to disruption while protecting profitability, and keep operations running smoothly even under pressure.

 

“As the food manufacturing landscape evolves, resilience is no longer just about withstanding shocks. It’s about operating independently, using resources efficiently, and adapting quickly to shifting market conditions. Companies that master this will be better positioned to stay ahead of the competition and maintain production even in the face of unexpected disruption,” Nalin says.