Retrofit Instead of New Construction: How FMCG Companies Are Future-Proofing Their Supply Chains

Empty shelves are not an option for any FMCG company today. Yet behind seemingly seamless product availability lies growing pressure on the supply chain. Rising labor costs, acute talent shortages, limited space availability, and increasing volatility are putting growing pressure on manufacturers and logistics operations alike. Especially in the goods sector, where margins are tight and expectations high, the pressure to modernize is intensifying, making retrofit solutions a strategic answer.

Distribution centers and production plants in focus

In many FMCG networks, production and distribution sites differ significantly. Production plants are often located outside urban areas, while distribution centers tend to be situated in densely populated regions with high demand. But it is exactly in those regions that labor shortages are becoming critical. At the same time, suitable new space is scarce and expensive. The result: more and more companies are turning their attention to optimizing existing sites. The logistics inside production plants is also moving into the spotlight. From receiving raw and packaging materials to feeding production lines and shipping pallets, many steps can already be fully automated today. From manual warehouses to automated picking

Both multinational corporations and mid-sized manufacturers are currently analyzing how to make their often outdated, manually operated warehouse structures fit for the future. In focus: automatic loading and unloading, driverless transport systems, automated storage systems, and automated picking solutions such as layer picking. These technologies enable more efficient processes and relieve employees of routine tasks.

Why retrofit instead of new construction?

Our project experience shows that retrofit solutions offer several advantages:

• Lower investments:
  Existing structures don’t need to be built from scratch.
  
  
• Faster ROI:
  Retrofit measures typically pay off much faster than new builds.
  
  
• Higher space efficiency:
  Automation allows for a more compact use of existing facilities.
  
  
• Rapid response to labor shortages and cost increases:
  As wages rise and qualified staff remain scarce, automating existing systems offers a faster route to supply chain efficiency and security than building new facilities.

A growing technology landscape increases complexity

One of the main challenges in retrofit projects is the growing number of technology providers. Especially in the automation segment, many new players, including numerous suppliers from Asia, are entering the market. It becomes all the more critical to carefully evaluate which technologies are truly needed, and which suppliers can deliver reliably, not only in terms of products, but also in on-site implementation, maintenance, and service.

Leasing instead of buying – new financing models Beyond technological innovation, new financing approaches are giving retrofit projects additional momentum. More and more manufacturers and financial partners are offering automated systems through leasing or pay-per-use models. These options often allow projects to be implemented with minimal capital expenditure, increasing planning security and scalability – particularly for mid-sized companies.

A Vision for the future: the “touchless factory”

Some projects already point the way forward: a fully automated, touchless factory, from raw material delivery to finished goods dispatch, is no longer a distant vision. FMCG companies are pursuing this concept through comprehensive retrofit initiatives at production sites across Germany. Step by step, modernized facilities are emerging where no human hand directly touches a pallet anymore. Disruptive, but achievable.

Challenges along the way

Many distribution sites are operated by logistics service providers. Implementing viable automation concepts here typically requires long-term contract commitments — a challenge for FMCG manufacturers, often due to strategic, financial, or operational constraints.

Another key challenge is integrating automated systems seamlessly into existing IT landscapes. Driverless transport systems, for example, must communicate smoothly with warehouse management systems (WMS) and, in some cases, with production systems (MES). This technological harmonization is complex but forms the foundation for efficient, disruption-free operations in both production and distribution environments.

The time for retrofit is now

FMCG companies seeking to secure their future competitiveness can no longer overlook automation in their existing infrastructure. Those who select the right technologies, adopt suitable financing models, and partner with experts who can execute effectively can ease cost pressures and unlock real competitive advantages.