Back to Pap'Argus - The challenges facing our industry in 2023
We attended the Pap Argus symposium on Thursday September 22, 2022 in Paris.
Around a hundred participants gathered in Paris on Thursday September 22 for the 10th edition of the Pap'Argus symposium. The aim of the colloquium was to organize a debate on the challenges facing paper and cardboard in 2023, led by some of the sector's key players.
2023 heralds many challenges for the packaging industry.
Bobst, Highcon, Esko, Paprec, Schisler, Hinojosa, ... and many others tried to provide their answers to these different challenges.
The results show that by 2023, all manufacturers will be facing the same problems and opportunities, including :
- B2B ecommerce as a matter of course
- Shorter and more frequent print runs
- Lead time reduction: a major strategic challenge for industry
- Energy costs destabilize the market
- Recruitment difficulties and shortage of skilled labor
- Technological developments in the service of ecology
1 - B2B E-Commerce as a matter of course
Today, e-commerce is accelerating the growth of B2B companies, and there are many reasons for this. Ease of reaching new customers, order automation, tailor-made offers, (sometimes) more attractive prices, faster payments and improved cash flow are the main benefits. In fact, according to a LexisNexis study, 93% of B2B companies that have developed personalization tools consider that they have increased their revenues.
Customer demand, combined with the rejuvenation of the buying public, is driving companies to invest in B2B e-commerce.
On the other hand, according to Éric Bacourt, CEO of Hinojosa (*), demand for e-commerce packaging is set to slow down. As a growth driver in the years to come, he believes, for example, in the substitution of plastic packaging for cardboard packaging.
(*) Hinojosa, corrugated board specialist (sales of €644m in 2021)
Shorter and more numerous print runs
With the explosion of sales "events" such as Black Friday, sales periods, Christmas, Halloween, etc., companies' marketing departments are increasingly playing up their product packaging. The result? More numerous, more personalized orders, for ever-smaller production runs. Highcon presented its digital printing and laser cutting solutions.
Companies in the paper and cardboard sector must therefore not only reorganize their production lines, but also adapt by investing in new equipment to keep pace with this fundamental trend. Handling these requests via e-commerce is also a good way forward.
3 - Lead time reduction: a major strategic challenge strategic challenge
The digitization of processes and machinery enables some manufacturers to produce and deliver more efficiently and rapidly.
Every company must aim for the shortest possible lead time in order to remain responsive and, above all, competitive on the market. It is also the customer's wish to be delivered as quickly as possible, even if this means not choosing the cheapest but the fastest manufacturer. For this reason, it's in every company's interest to implement effective solutions to reduce it.
Manufacturers who fail to invest in lead time, and therefore in their supply chain, run the risk of becoming insufficiently competitive. With customers demanding ever-faster "time to market", speed of execution is no longer an option.
4 - Energy costs destabilize the market
According to INSEE, in April 2022, paper pulp, the raw material needed to manufacture paper and cardboard, cost over 40% more than at the same time in 2019, i.e. before the COVID-19 pandemic. The current volatility of energy and raw material prices is putting a strain on many companies, particularly in the printing, paper converting and packaging sectors.
These increases are disrupting our industry, complicating future projections. Let's hope that a belated but necessary shield on energy rates will be decided this winter, so as not to damage a paper industry already under strain in France.
5 - Recruitment difficulties and skills shortages skilled labor
A phenomenon that originated in the United States after the COVID-19 crisis, "the big resignation" affects all sectors of activity, and the paper and board industry is unfortunately no exception.
With a shortage of drivers for some, and a lack of manpower in factories for others, the industry is under pressure, not least because of its technical nature. To adapt, companies are digitizing by investing in more modern software: time-saving for more production and enhanced quality of work for teams, according to ESKO. There's also a desire to put people back into high value-added tasks, and to entrust repetitive tasks to software, with the aim of attracting and retaining new talent.
More broadly, in all industries, companies are reorganizing to offer their employees a hybrid work environment, the aim being to modernize the working environment. The rise of telecommuting is a good example.
6 - Technological developments in the service ecology
Many companies are investing in a more responsible CSR approach: Bobst reconditions old machines, installs and uses solar panels; Hinojosa and Schislerproduce plastic substitutes... Green initiatives are now an integral part of corporate life.
And yet - despite the industry's efforts to adopt an eco-responsible approach - we can observe a gap between demand and consumer behavior. Bobst, for example, has set up a system to offset the carbon impact of its machines (particularly its logistics), in response to recurrent customer requests. As this approach generates a certain additional cost, few companies have chosen to pay more for their orders in order to offset their carbon impact.
Packitoo, through its HIPE solution and the services it provides to help cardboard manufacturers (flat and corrugated) with their digital transformation, is already addressing 5 of the 6 key points in concrete terms:
- B2B E-Commerce as a matter of course: HIPE is an omnichannel tool, designed both for all employees (sales, ADV, quotations, BE) and for customers. HIPE can now be integrated into any E-Commerce site. Integrations already exist with Magento and WordPress/Woocommerce, two major E-Commerce solutions.
- Shorter, more numerous runs: HIPE speeds up and automates small and medium-sized custom orders.
- Reduce lead time : a process lasting several days in just a few seconds, HIPE enables manufacturers to respond instantly to customer requests.
- Energy costs are destabilizing the market: 6 price increases in 2021, constant quotation updates and an additional burden on the sales and quotation team. With HIPE, our customers have never been caught out by this phenomenon.
- Recruitment difficulties and shortage of skilled labor: HIPE is a key knowledge base for any sales team. With its unique configurator, it enables both sales staff and customers to create consistent, made-to-measure configurations. Quotations are also automated (up to 75% of a carton converter's quotations). On the one hand, HIPE brings a modern, straightforward experience to the sales process. On the other, it provides a technical framework that supports users on a daily basis.
Last but not least, when it comes to technological developments in the service of ecology, we're actively thinking about providing - here too - a concrete response that will have a major impact! We'll be bringing you more on this subject in future articles.
In the face of these challenges, we are at your disposal to advise you and carry out all the necessary actions to support you in your digital transformation to serve your teams and your customers.