February 2, 2017
The pace of technological changes is increasing at an amazing rate. To put things into some sort of perspective, the phone in your pocket is 100 million times more powerful than the computers that landed men on the moon in 1969.
While the packaging industry has evolved at a nominal pace over the years, the explosion of new technologies and processes will force plants to make increasingly difficult decisions with greater risk and with less assurance of the outcome. Let’s look at some of changes you will face.
Everyone talks about quality, but few have a firm understanding of how to quantify it.
Approaching Fast
The landscape of the packaging playing field is changing and shrinking at the same time. Mergers, acquisitions, and consolidations will continue, with the pace likely to increase. Faster, more sophisticated, and more capital-intensive machinery and logistical demands will force companies to pay a premium for what is the most critical component to a company’s success—volume.
With this increased potential reward comes exponentially greater risk. A wrong bet can be not only damaging; it can be fatal.
Digital printing is coming, and it’s going to change everything. The introduction of digital will be the biggest change in the industry since the flexo folder gluer, but its effect has a far broader reach. Companies will have to rethink how they purchase machines, hire and train employees, and sell value previously unrealized in order to justify a very large capital expense for a machine that will be obsolete in five years.
With cloud-based computing, your computers are no longer on your desk; they are in your pocket. And not just your pocket, but your clients’ and vendors’ pockets as well. With cloud-based computing, the internet serves as a real-time bridge between you and your customers. Inventory values are constantly updated, reorder quantity purchase orders can be automatically generated, and much of the friction that occurs during a transaction can be eliminated.
Just Over the Horizon
Everyone talks about quality, but few have a firm understanding of how to quantify it. The days of making a box with marginal quality are over. Orders today are rejected because the blue ink is dark blue, not midnight blue. Quality requirements range far beyond making and printing a box. In today’s world, the unitizing, shipping, and unloading of containers is just as important. Any false step can cost you money.
There are few—if any—points in the order completion cycle that create as much friction as the delivery planning and logistics. Decreased lead time, smaller order sizes, and having little or no control over your clients’ receiving protocols adds hidden costs to your operation and takes away from your bottom line.
Using a GPS, automated trip logs, and analytics, the true cost of delivery—and by extension, the true cost of serving the client—can be much more specific.
The growing of cannabis may seem unrelated to the world of packaging, but changing American perceptions may have a huge impact on the packaging industry. Acreage planted in hemp produces four times as much fiber as a comparable area planted with trees. As it turns out, hemp is white by nature, reducing the need to use harmful chemicals to bleach the fibers.
Reality Check
Every year, Fortune magazine prints a list of the 500 most profitable companies in the United States. Recently, a comparison was done between the lists from 1955 and 2015, a 60-year review of how the companies were performing. Only 12 percent of companies on the list in 1955 were still on it in 2015. The nature of American capitalism, the dynamics of “creative destruction,” forces companies to change, adapt, and transform to meet the demands of the marketplace. The packaging industry is not excepted from this dynamic.
John Clark is director of analytics at Amtech Software. He can be reached at jclark@amtechsoftware.com.
