4 (false) obstacles to digitalization in the the packaging industry
Bringing a custom packaging project to fruition can be a long and tedious experience for both buyer and supplier.
The market has evolved, and manufacturers now find themselves with far more requests for quotations than before : where they used to quote for 10,000 parts, they now quote for 10,000 parts.
In this context, currency brokers inevitably fall behind schedule, and customers have to wait an average of 48 hours before they receive their quote. Each time a change is made (and there are usually several), a new quotation is issued, and the customer must again wait 2, 3 or 4 days. It's not uncommon for several weeks to elapse between submission of the brief and validation of the final proof.
It's a delicate situation for both parties:
- The manufacturer takes time to draw up several quotations for the customer, with no guarantee that he will end up working with him. Some manufacturers even end up with over 90% of their quotations failing to convert into orders.
- Customers, on the other hand, are often in a hurry and don't understand the reason for such long lead times.
To simplify the whole process, there are now software packages like HIPE that provide customers with an online packaging configurator. This gives customers the opportunity to create their own quotation and obtain a price instantly. With this kind of tool, manufacturers can differentiate themselves from the competition by offering much shorter-than-average waiting times, while providing their customers with a remarkable purchasing experience.
Our industry is full of new technologies designed to improve business performance. However, the packaging market is still very reluctant to embrace these developments.
But aren't most barriers to digital transformation more mental than factual?
Before answering, it's important to define the term "digitization" (= digital transformation), which is often misunderstood: digitization is a process that aims to transform traditional processes, objects, tools or professions through digital technologies in order to make them more efficient.
It's not just a matter of introducing new technologies to tie in with existing processes. Above all, it's about questioning the dynamics in the light of the possibilities offered by new technologies.
Fear of change
" Every innovation goes through three stages: first it is ridiculed, then it is violently opposed, and finally it is taken for granted ", said Schopenhauer.
It's a well-known fact that anything new provokes rejection. As soon as something new upsets our habits and takes us out of our comfort zone, we find it hard to accept.
When desktop computers were first introduced in the 70s, many employees were reluctant to replace their work tools with this new device deemed too complicated and impractical. 50 years later, it's clear that employees have come to their senses, as it's now impossible to find an office without a computer.
So it's not the tools that are the problem, it's the way we think about them. One way of looking at things is not to see these new features as a change, but rather as an evolution. You have to accept the changes in the industry, live with the times and embrace the opportunities they bring.
Lack of time to rethink processes
Manufacturers have long working days. Managing a plant(s) and its teams requires a lot of day-to-day work.
Implementing new software requires a thorough review of current processes. It's a job you don't necessarily think about when you've got your "head in the handlebars".
Just as an athlete takes the time to study and analyze his or her latest performance, a manufacturer should take a close look at his or her processes to realize all the development potential that can still be added.
There's no better time to do so, as the packaging industry is undergoing a profound transformation in line with changes in the retail environment.
Brands today have to adapt to competitive pressures, new market expectations and the multiplication of commercial highlights (Black Friday, French Days, private sales and sales, etc.). They are therefore looking to shorten the cycle of new projects by reducing the time between packaging design and its arrival at the consumer.
As a result, manufacturers are producing more and more quotations for ever-smaller quantities.
These transformations require more efficient workflow tools to adapt optimally.
That's why it's important to set aside some time to think about these processes. Is it possible to optimize them? And how? With which tool(s)?
The sooner you do, the sooner you'll realize that you have the opportunity to save/earn a lot of money by perfecting them.
Prefer to invest in production innovation
It's important to have good, high-performance, reliable machines. However, there's no point investing in a high-speed machine if the rest of the process can't keep up.
Most customers aren't interested in new production methods. They simply want to feel they are being considered, and to receive their products in the conditions they expect: delivered on time, on price and with a good level of finish.
That's why customer relations must never be neglected. As you know, recruiting a customer costs three times as much as retaining them, and winning them back costs 12 times as much. More importantly, 75% of negative customer experiences have nothing to do with the product.
Digitizing your processes helps you to solidify your customer relationships: by better gathering customer needs, delivering quotations more quickly, and having a more supervised follow-up, you bring a truly differentiating service to your customer. By centralizing and automating all your processes, you avoid the human errors that can make you look bad in front of your customers.
Employees opposed to new technologies
Many people have a skewed view of new technologies. Many believe that robots will end up stealing their jobs, that new technologies are too complex and a fad of management. On the contrary, they allow them to concentrate on their core business.
Like spellcheck, new technologies can simplify your tasks, in this case by making it easier to correct and proofread your texts. However, as this task requires you to think critically and/or creatively, you will always need a competent person to check that the syntax is correct, that the text is understandable, ... and correct if necessary.
They make time-consuming, repetitive tasks less tedious, leaving teams more time to focus on the important tasks: those that can't be managed by software, because they require real business expertise.
In our industry, a manufacturer-seller spends most of his or her day drawing up quotations. A repetitive task with little intellectual fulfillment. They could let a software program like HIPE take them in hand, and concentrate on the most technical and innovative requests - in other words, the truly value-generating projects.
It's hard to imagine a design engineer spending as much time on a 100,000-piece order for a key customer as he does on a small, ill-defined and changing order for a customer placing just this one order per year.
You need to make your employees understand that new technologies are there to help them. Once in place, they'll realize how much time these tools save them on a day-to-day basis, and they'll be grateful to you for it.
Don't wait any longer
Today, the packaging industry is - to say the least - cautious about digital transformation. It is clear, however, that its players will soon have to catch up. In the space of just a few years, the print industry has been completely reshaped by digitalization, with the arrival of new players on the market completely "disrupting" a sector that printers then thought was stagnant. This paradigm shift will happen sooner or later in the packaging industry.
Heidelberg, for example, recently launched Zaikio, an App Store listing the best applications for printers and manufacturers worldwide.
The reality is that digital technology has increased the speed at which the business world operates. Stubbornly refusing to adopt new systems will put you behind your competitors.
No one is safe, just look again at the print companies who thought they were safe, but were swallowed up by the arrival of Web-to-Print. So, be a forerunner, take the risk that isn't a risk, and stay one step ahead of your competitors.
At Packitoo, we're passionate about the subject, and if you'd like to continue the conversation and find out how HIPE could help you modernize your processes :