4 (false) barriers to digitalization in the packaging industry
Bringing a custom packaging project to fruition can be a long and tedious experience for both the buyer and the supplier.
The market has evolved and manufacturers are now facing far more requests for quotes than ever before: where they used to make one quote for 10,000 pieces, they now make 10 quotes for 1000 pieces.
In this context, estimators inevitably fall behind and customers have to wait an average of 48 hours before being issued the quote. With each change (and usually there are several), a new quote is issued and the customer must again wait 2, 3, 4 days.
It is not uncommon that between the delivery of the quotes, the weekends and other holidays, several weeks pass between the submission of the brief and the final page proof.
This is a delicate situation for both parties involved:
- The manufacturer takes time to produce several quotes for the client, without any guarantee that he will end up working with him. It even happens that manufacturers find themselves with more than 90% of their quotes not being converted into orders.
- The customer is often in a hurry and does not understand the reason for these long delays.
To simplify this whole process, there are now software programs such as HIPE that provide customers with an online packaging configurator. This allows the customer to create his quote and obtain a price instantly. With such a tool, the manufacturer differentiates itself by offering a much shorter waiting time than the average manufacturer while providing its customers with a remarkable buying experience. Our industry is full of new technologies 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 this question, it is important to define the term “digitalization” (= digital transformation), which is often misunderstood: digitalization is a process that aims at transforming traditional processes, objects, tools or professions through digital technologies to make them more efficient.
It does not only mean implementing new technologies that are connected to the current processes. It is above all about questioning its dynamics in the light of the possibilities offered by new technologies.
The fear of change
“All innovation passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.” said Schopenhauer.
It is well known that anything new causes rejection. As soon as something new challenges our habits and takes us out of our comfort zone, it becomes hard to accept it.
When desktop computers were introduced in the 1970s, many employees were reluctant to replace their work tools with this new type of device, which was considered too complicated and impractical. 50 years later, it is clear that employees have come to their senses, as it is now impossible to find offices without computers.
The problem does not come from the tools, but from the vision we have of them.
One way of looking at it 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 grasp the opportunities they bring.
Lack of time to rethink processes
Industrialists have long days. Managing one or more plants and its teams requires a lot of day-to-day work.
The implementation of a new software requires a thorough reflection on the state of the current processes. This work, we don’t necessarily think about it when we have “our nose in the grindstone”
Just like an athlete who takes the time to study and analyze his or her latest performance, an industrialist should linger over his processes to realize all the development potential that can still be added.
There is no better time to do this, as the packaging industry is going through a profound transformation due to changes in the market.
Brands today have to adapt to competitive pressures, new market expectations and the multiplication of commercial events (Black Friday, private sales, …). They seek to reduce the cycle of new projects by reducing the time between the design of the packaging and its arrival to the consumer.
As a result, manufacturers are making more and more estimates for ever smaller quantities.
These transformations require more efficient workflow tools to be able to adapt optimally.
It is therefore important to take time to think about these processes. Is it possible to optimize them? How? With which tool(s)?
The sooner you do this, the sooner you will realize that you have the opportunity to save/earn a lot of money by improving them.
Prefer to invest in production innovation
It is important to have good, efficient and reliable machines. However, there is no point in investing in a high-speed machine if the rest of the process cannot keep up.
Most customers are not interested in new production methods. They simply want to feel that they are being considered and that they are receiving their products in the conditions they expect: on time, on price and with a good level of finishing.
Therefore, customer relationship must not be neglected. You should know that recruiting a customer costs three times more than retaining them and winning them back costs 12 times more. Even more important, 75% of negative customer experiences are not related to the product.
Digitizing your processes helps you solidify your customer relationship: by better gathering the customer’s need, delivering quotes faster, having a more supervised follow-up; you bring a truly differentiating service to your customer. By centralizing and automating all processes, you avoid human errors that will make you look bad in front of your customers.
Employees opposed to new technologies
Many people have a biased view of new technologies. Many believe that robots will eventually steal their jobs, that new technologies are too complex and are a fad of management. On the contrary, it allows them to focus on their core business.
Just like a spell checker, new technologies allow you to simplify your tasks, here for example by facilitating the correction and the proofreading of your texts. However, since this task requires critical and/or creative thinking, you will always need a competent person to check that the syntax is correct, that the text is understandable, … and correct it if necessary.
They make time-consuming and repetitive tasks less tedious, leaving more time for the teams to focus on the important tasks: those that cannot be managed by the software, because they require real business expertise.
In our industry, a manufacturer-salesperson spends most of his or her days making estimates. A repetitive and not very intellectually fulfilling task. He could let a software like HIPE take care of them and focus on the most technical and innovative requests, in other words, the really valuable projects.
How can you imagine that an estimator spends as much time on a 100,000-piece order for a key customer as on a small, ill-defined and changing order for a customer who places only one order per year?
You need to make your employees understand that new technologies are there to help them. Once in place, they will realize how much time these tools save them daily and they will be grateful.
Don't wait any longer
Today, the packaging industry is – to say the least – reluctant to embrace digital transformation. However, its players will soon have to catch up. In a few years, the print industry has been completely reshaped through digitalization, with the arrival of new players on the market having completely “disrupted” a sector that printers thought was frozen. This paradigm shift will happen sooner or later in the packaging industry.
There are already powerful players betting on its digitalization, such as Heidelberg, which recently launched Zaikio, an app store that lists the best applications for printers and manufacturers around the world.
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 take another look at the print companies that thought they were safe, but got swallowed up by the advent of Web-to-Print. So, be a precursor, take this non-risk and be one step ahead of your competitors.
At Packitoo, we are quite passionate about this topic and if you want to continue the conversation and discover how HIPE could help you in the modernization of your processes :