March 25, 2019
At first glance, one might think there is little in common between the packaging industry and the world of commercial airlines. But at their cores, both industries are in the same business—the efficient and safe transport of the packaged goods to their destination at a reasonable cost. Though they work at wildly different price points, schedules, and altitudes, both perform primarily the same function—in the case of packaging, without the layover.
Both industries are considered commodities and are slaves to capacity. Each has a cost structure heavily weighted by a single raw material—fuel in the case of the airlines, and paper in packaging—and both have common enemies in weight and distance. Both these industries have historically underperformed the market, often to a frightening degree. But recent days have been better due to mergers, acquisitions, and unforeseen changes to the economy due to the growth of the internet.
A Better Product
Weight is a common enemy for both industries. The airlines have always been fixated on reducing weight while maintaining structural integrity. The corrugated industry was a bit slower in moving to lighter board combinations, but the result was dramatic—a large improvement to the financial bottom line with negligible degradation to the end product. The game-changing move from Mullen to ECT allowed the industry to reduce fiber cost, which reduced overall costs without surrendering margin back to the marketplace.
Improvements in aerodynamics and the introduction of composite materials and more efficient engines have allowed airlines to fly larger planes with fewer fuel costs. Advances in engine design and reliability allow jets to fly on two engines rather than three or more as in previous generations. Lightweight materials in the cabin provide better comfort to the passengers without suffering additional weight costs.
On the packaging side, high-speed converting equipment reduces the cost per unit, while the introduction of digital printing provides new opportunities for shelf-ready products, with the added bonus of nearly infinite graphic variations at little or no additional costs.
A Faster Journey
Not so long ago, booking an airplane flight often took a trip to a travel agent, who had to sift through dozens of options and multiple price points and varying restrictions. The time and expense from planning the trip to stepping off the plane at your destination was long and difficult.
Not so long ago a packaging customer would mail or fax a request for a quote to multiple suppliers and wait for their price sheets to be returned. Order for goods and the lead time for delivery were measured in weeks. Needless to say, those days are gone forever.
More efficient corrugators, scheduling improvements, and machine automation have reduced lead times dramatically. Better planning software on the customer’s end gives them greater exposure to upcoming demand, providing better information to their vendors.
The advent of digital printing provides customization to a level unimaginable just a few years ago. Historically, displays for big events such as the Super Bowl could be produced only in the time required for all four permutations of the team pairings to be printed and the losing teams’ output being scrapped. Today, once the final whistle sounds, a simple push of a button sends the digital file to the printer to produce the display with the correct two teams appearing in the championship game.
A Richer Experience
On many planes today, you are actively and passively presented with a host of messages encouraging you to be to loyal to the airline you are flying. Credit card offers, membership offers for frequent flyer programs, airline clubs, and credit cards are all designed for a single reason: to encourage you to be a more frequent user of their services.
Beyond the obvious benefits of the richer palette of digital printing, even the lowly corrugated shipper is now being printed on both sides of the sheet. This previously unutilized canvas can now include instructions, coupons, promotional references, loyalty program data, or instructions for recycling.
These innovative solutions exist to provide better services and a richer suite of solutions, and most of all, to engender loyalty to the vendor. As long as the purchasers of the service feel they are getting more than they pay for, both sides win.
And winning is almost as good as landing early for a flight.
John Clark is director of analytics at Amtech Software. He can be reached at jclark@amtechsoftware.com.
