A Technology Renaissance

In what can perhaps be considered a most cruel hoax being played on ownership, a technology renaissance has been occurring in the packaging business at a time of generally slow economic growth. United States gross domestic product increases have been at or below 2 percent for multiple quarters. Lackluster GDP performance drives uncertainty in the overall strength of the economy, affecting all segments—consumers, producers, and CPGs, to name a few. PIRA figures show great promise for growth for packaging media over the long term, but the year-over-year growth, especially in a developed market such as North America, shows low to mid-single-digit strengths.

Yet the fact remains: Manufacturing technology in general, and printing and converting technology in particular, are evolving and developing faster than ever. Improvements made in equipment, substrates, and inks have been both evolutionary over the long haul as well as sudden, and all with impact. The recently concluded SuperCorrExpo® in Orlando showcased the gamut of what is available to packaging producers in a broad sweep of technology that was in some cases familiar, and in other cases unrecognizable.

‘In a changing world, if you are not adaptable, you will disappear.’

So, in this environment, what is the risk/reward consideration? The risk is being left behind. A former colleague of mine had a picture in his office of dinosaurs roaming in a field. The picture was captioned, “In a changing world, if you are not adaptable, you will disappear.” The landscape in our great industry is evolving.

Let’s break the technology renaissance down into four categories:

• Connectivity through information platforms (commonly known as the internet of things).
• Robotics.
• Augmented reality.
• Digital printing (as a complement to existing processes).

Connectivity

Printing presses and converting equipment have been the “big game” in our industry for more than four decades. Machine suppliers developed equipment well-suited for boxmakers to use to print and convert what their customers ordered. The suppliers sold the presses, repaired the presses, replaced parts on the presses, and improved or replaced them with the next big idea. Along the way, machinery began to subtly shift from being mechanical things to being electrical things. Motors became more sophisticated. Presses were controlled by drives and programmable logic controllers.

Artificial intelligence allowed machines to make adjustments prior to operator intervention. These were the precursors to today’s platform connectivity, what General Electric in 2011 called the “industrial internet.” Today, the Harvard Business Review (HBR) calls it “digital ubiquity.” Digital ubiquity actually was driven up the supply chain to box plants and their suppliers as the value proposition began to shift from a reliable product (the press) being used to make other reliable products (boxes), to identifying and expanding the benefits and analytics that can be generated by the equipment. In other words, equipment that performs became a given. What can the press offer beyond good production? Digital ubiquity has changed printing and converting equipment, and consequently the box, from sometimes being seen as a commodity to being an integral part of the connected world.

This is also reflected in the way new equipment is bought today. It has fundamentally changed the machine supplier/machine buyer relationship. General Electric CEO Jeffrey Immelt summarized the shift in the supplier’s approach to selling in this way: “The transition we have to make with our customers is going from agreements that are break/fix to agreements that guarantee outcomes.” This is why today in the packaging business we see new machine contracts written with criteria that could be based on uptime, productivity, life-cycle analysis, reduced staffing, or some other “outcome.” The winning solution today is one that combines technology, innovation, connectivity, and analytics.

The ability of today’s printing and converting equipment to “speak” to the owner, the operator, the supplier, and other pieces of equipment results in benefits that include lower maintenance costs, improved uptime, and improved capacity. All significantly improve the service provided to the ultimate customer and to their ongoing satisfaction. Connectivity, digital ubiquity, the internet of things—call it what you will—is the common denominator and driver in the technology renaissance being seen in today’s printing and converting marketplace.

Robotics

Because digital ubiquity extends well beyond any single machine or plant, it is no surprise that it also creates a system that can unite all of the activities within a plant. Functions that used to be distinct steps and processes from scheduling to prepress, production, and finishing, through shipment of the product out the door can now be integrated into an encompassing operating system. In many plants, this integration and the resulting speed of throughput has created bottleneck . Robotic technologies have been implemented in the united system to eliminate these . Robotics achieves greater reliability, efficiency, and flexibility, usually with less waste associated with a process. The agile integrated enterprise needs to have an unimpeded production process. Robots are always ready.

Augmented Reality

AR technology will allow boxmakers to extend their product into the real world without ever leaving the office.

Augmented reality (AR) is a live direct or indirect view of a physical, real-world environment whose elements are augmented (or supplemented) by computer-generated sensory input such as sound, video, graphics, or GPS data. The technology functions by enhancing one’s current perception of reality. AR technology will allow boxmakers to extend their product into the real world without ever leaving the office. We’ve heard so much about how the “box sells the product,” and many boxmakers have created retail sales environments within their buildings to help customers visualize their products on the shelf, the end cap, or the display on the floor. AR can re-create the same visual experience without having to physically set up the simulated retail environment. It will revolutionize the way customers will work with a boxmaker’s sales and design teams.

Digital Printing

If you have read to this point and not grasped that the world is going digital, here is a gentle reminder: The world is going digital. Digital printing presses have been on the scene for two decades now and remain an important complement to flexography, offset, and gravure. According to Printing Industries of America (PIA), digital print opportunities come from the following channels: transfer from existing print, 25 percent; new jobs from existing clients, 37 percent; new jobs from new clients, 38 percent. These numbers importantly show that existing printing processes in use today meet or exceed customer requirements. Because of this, these presses are here for the foreseeable future.

There is also a tremendous growth story in the new job categories cited by PIA. Digital printing offers unique opportunities for supply-chain optimization, marketing optimization, product development, and reduced time to market. AICC’s recently concluded Region 4 meeting, a Digital Symposium (see related story, Page 14) held in Texas, brought together a large number of suppliers, users, and those looking to be educated. They were not disappointed. Plant tours at the digital operations of Performance POP and ABox Packaging showed the promise of digital printing alongside the pillar printing operations upon which these companies built their success. Digital is no traditional disruption scenario. According to HBR, “the paradigm is not displacement and replacement but connectivity and recombination.” These changes are wrought by the effect digital ubiquity has on other components of the supply chain, on factors in your customers’ businesses, and on the overall economy.

Understand that risks are best handled with openness and knowledge. Educate yourself. Use partners and independent resources—anything and everything available to ensure that you understand the target of your investment. To determine if the risk is worth the reward, ask:

• What level of performance do you need?
• What metrics—quality, cost, labor—do you want to track?
• What level of differentiation opportunity do you need?
• What level of capacity enhancement do you need?
• What level of productivity is necessary to keep yourself afloat?
• What level of flexibility is necessary for your company?
• Will the new addition keep you competitive?
• Will it give you an edge with your customers?
• Will it allow you to acquire new customers?

There is so much information and there are so many criteria you can discuss with suppliers today. You can get a very good sense of what your potential return on investment will be. It is quite likely that return will have less and less to do with your banker’s calculations. You should expect to count on a return that is measurable and built into the machine contract—a contract that looks nothing like the buy/break standard of the past.

Embrace technology. The thing that is changing the fastest is the speed of change.

Mike D’Angelo is vice president of AICC.