Packitoo HIPE

Review of Pap'Argus - The challenges facing our industry in 2023

We attended the Pap’Argus conference on Thursday, September 22, 2022, in Paris.

Around one hundred participants gathered this Thursday, September 22 in Paris for the 10th edition of the Pap’Argus conference. The conference aimed to organize discussions around the challenges facing the paper/cardboard industry in 2023, facilitated by several key players in the sector.

2023 brings many challenges for the packaging industry.

Bobst, Highcon, Esko, Paprec, Schisler, Hinojosa, … and many others attempted to provide answers to these various challenges.

It appears that every manufacturer is or will be confronted with the same problems and opportunities by 2023, including:

  • B2B e-commerce as a matter of course
  • Shorter and more numerous print runs
  • Reducing "lead time": a major strategic challenge for the industry
  • Energy costs are destabilizing the market
  • Recruitment difficulties and a shortage of skilled labor
  • Technological developments serving ecology
 
We will cover all these points for you in the following lines:

1 - B2B E-Commerce as a natural choice

HIPE CPQ interface

Today, e-commerce is accelerating growth for B2B companies, driven by several factors, including easier reach to new customers, order automation, customized offers, more attractive pricing (in some cases), faster payments, and improved cash flow. According to a LexisNexis study, 93% of B2B companies that have developed personalization tools believe they have increased their revenue.

Additionally, customer demand combined with a new generation of buyers are pushing companies to invest in B2B E-Commerce.

Furthermore, regarding the demand for E-Commerce packaging – according to Eric Bacourt, CEO of Hinojosa (*) – demand will level off. As a growth driver in the coming years, he sees greater potential in substituting plastic packaging with cardboard packaging.

(*) Hinojosa, specialist in corrugated cardboard (€644m turnover in 2021)

Shorter and more frequent print runs

With the explosion of commercial events such as Black Fridays, sales periods, Christmas, Halloween, etc., companies' marketing departments are increasingly leveraging product packaging. The result is more numerous and personalized orders for increasingly smaller series. Specialist equipment manufacturers are addressing these challenges; Highcon presented its digital printing and laser cutting solutions.

Companies in the paper and cardboard sector must therefore reorganize their production chains and adapt by investing in new equipment to follow this underlying trend. Processing these requests via E-Commerce is also a good approach.

3 - Lead time reduction: a major strategic challenge for the industry

The digitization of processes and machinery allows some manufacturers to produce and deliver more efficiently and quickly. 

Every company should aim to achieve the shortest possible lead time in order to remain responsive and, above all, competitive in the market. Customers also want to be delivered as quickly as possible, even if it means choosing the fastest rather than the cheapest manufacturer. It is therefore in every company's interest to implement effective solutions to reduce it. 

Manufacturers who do not invest in lead time and therefore in their supply chain, risk becoming uncompetitive. Linked to the customer's desire for an increasingly rapid time to market, speed of execution is no longer optional.

4 - Energy costs destabilize the market

According to INSEE, in April 2022, paper pulp, a raw material needed to manufacture paper and cardboard, cost more than 40% more than in the same period in 2019, i.e. before the COVID-19 pandemic. The current volatility in energy prices and raw material costs is undermining many companies, particularly in the printing, paper converting and packaging sectors.

These increases are disrupting our industry, making future projections difficult. Let's hope that an energy price shield – late but necessary – will be decided this winter to avoid undermining an already strained paper industry in France.

5 - Recruitment difficulties and shortage of skilled labor

A phenomenon that originated in the United States after the COVID-19 crisis, the "Great Resignation" affects all sectors of activity, and the paper and cardboard sector is unfortunately no exception. 

Lack of drivers for some, lack of manpower in factories for others, the industry is under pressure, particularly because of its technical nature. To adapt, companies are digitizing by investing in more modern software: a time saving for more production and an increased quality of work for the ESKO teams. There is also a desire to reassign people to high value-added tasks and to entrust repetitive tasks to software in order to attract and retain new talent. 

More broadly, across all industries, companies are reorganizing to offer a hybrid work environment to their employees, with the aim of modernizing the workplace. The rise of telecommuting is a good example.

6 - Technological developments serving ecology

Many companies are investing in a more responsible CSR approach: reconditioning of old machines, installation and use of solar panels for Bobst; substitute products for plastics at Hinojosa and Schisler... Ecological initiatives are now an integral part of corporate life. 

However – despite the industry's efforts to adopt an eco-responsible approach – there is a gap between demand and consumer behavior. For example, Bobst has implemented – following the recurring demand from its customers – a system to offset the carbon impact of its machines (especially its logistics). As this approach incurs a certain additional cost, few companies have chosen to pay more for their orders to offset their carbon impact.

Packitoo, through the HIPE solution and its support services for cardboard (flat, corrugated) manufacturers in their digital transformation, already addresses 5 of the 6 key points in a concrete way:

  1. B2B E-Commerce as an obvious choice: HIPE is an omnichannel tool, designed for all employees (sales, customer service, quoting, engineering) and for customers. HIPE now integrates with any E-Commerce site. Integrations already exist with Magento and WordPress/Woocommerce, two major solutions for E-Commerce.
  2. Shorter and more numerous print runs: HIPE accelerates and automates small and medium-sized custom orders.
  3. Reduction of "lead time": a process of several days in a few seconds, HIPE allows each manufacturer to respond instantly to their customers' requests.
  4. Energy costs destabilize the market: 6 price increases in 2021, constant quote updates, and an additional burden for the sales and quoting team. With HIPE, our customers have never been caught off guard by this phenomenon.
  5. Recruitment difficulties and shortage of qualified labor: HIPE is a key knowledge base for any sales team. With its unique configurator, it allows both sales representatives and customers to create coherent, custom configurations. Quotes are also automated (up to 75% of a corrugated converter's quotes). On the one hand, HIPE provides a modern and simple experience for sales activities. On the other hand, it provides a technical framework that supports users on a daily basis.
 

Finally, regarding technological developments serving ecology, we are actively considering providing – there too – a concrete response that will have a strong impact! We will tell you more in our next articles.

Faced with these challenges, we are at your disposal to advise you and take all necessary actions to support you in your digital transformation, serving your teams and your customers.