Australian packaging manufacturer Visy is making big investments in technology to automate its factories, and maintains it will end up employing more people, thanks to its natural growth.
The privately-owned paper, package and recycling company is riding a wave of technological change that’s reshaping the manufacturing and logistics industries.
“Even though we are in a slowish industry we, like Amazon, rely on technology for our success. Technology, IT, robotics and artificial intelligence are becoming central to Visy,” said Anthony Pratt, Chairman and CEO of Visy Industries at the AWS Summit in Sydney yesterday.
He noted that the company will soon deploy robotic driverless forklifts in its factory warehouse and “beyond that we have a vision which I call the lights-out factory — a fully automated box factory that operates in the dark because robots don’t need lights.”
Pratt stated that the rise of automation wouldn’t lead to fewer people being employed by Visy.
“Our natural growth means we will always employ more and more people every year,” he said.
For example, the company recently set up an industrial technology and digital hub in Singapore which is tasked with finding ways to incorporate IT, AI and robotics “into every aspect of our packaging, paper making and recycling businesses globally.”
Pratt argued the rise of robotics could reverse the trend of Australian manufacturing disappearing offshore to countries with cheaper labour costs.
“It wasn’t too long ago that economists were predicting the death of manufacturing in countries like Australia and America because they couldn’t compete with low labour costs in Asia. I beg to differ,” he said.
“I see this as an area where countries like Australia and America, with the best brains and natural resources, are where the manufacturing is because robots make labour costs irrelevant.”
The Amazon Factor
Pratt was speaking at the AWS Summit in Sydney both as a supplier of Amazon.com and a customer of Amazon Web Services.
Visy has been selling boxes to Amazon in America since 1999 and now doing the same in Australia. As the Seattle giant was gearing up for its entry into online retail in Australia, someone told Pratt that Visy was the only company in Australia looking forward to Amazon’s arrival.
“As they say: in a gold rush, sell shovels.”
The company is also focusing on product innovation. For example, Visy has developed boxes to keep fresh food cooler for Amazon in the US.
Visy is also exploring packaging that “contains far more than just a barcode” which will show where the box has been or how hot it has got in the box — an important consideration for fresh food being moved around the world.
“Amazon has inspired us to be not just a box supplier, but a total packaging supplier. Logistics is an opportunity to improve the customer experience and lower costs which will enable Amazon to reduce prices further. We want to actively innovate with Amazon on this,” Pratt said.
Visy’s focus on technology has evolved from a single employee building Visy’s first web site decades ago to high-tech manufacturing facilities, with plans to further deploy robotics and machine learning.
After recognising its existing systems were “constraining innovation” Visy migrated 100 applications, including core SAP system, to AWS in 2016.
That move has lead to higher performance and the “virtual elimination of outages.”
“We have seen huge lifts in performance, SAP is running up to ten times faster and costs are lower by 30 per cent,” Pratt said.
“What this means is our IT gurus no longer need to just fight fires and keep things running. They are freed up to concentrate on using IT to add real value in the business.”