How digitization transforms flexible packaging operations

As global markets continue trending towards a buyers market, so change the demands. Individual product solutions with a manifold of varieties dominate over mass produced items. This however puts manufacturing companies of any kind into a tough spot - from machines running 24/7 on the same product, now operators have to more frequently change setups, recalibrate and clean. Digital solutions can directly address those specific challenges that low-volume, high complexity manufacturers currently face. The secret lies in applying digitally integrated operations rather than single functions. In our experience, three areas hold significant potential.

Plastics are the workhorse material of the modern economy. Their popularity has kept the industry growing for 50 years, with global production surging from 15 million metric tons in 1964 to 311 million metric tons in 2014. If business proceeds as usual, this number is projected to double to more than 600 million metric tons in the next 20 years. Yet functional benefits come at a price. Plastic packaging, especially, is the quintessential single-use product: it represents a quarter of the total volume of plastics, and around 95 percent of the value of plastic-packaging material (worth some $80 billion to $210 billion annually) is lost to the economy. And while its intended useful life is typically less than a year, the material lives on for centuries.

In the age of industry 4.0 (I4.0) and the Internet of Things (IoT), the flexible packaging sector faces a number of challenges: production systems are diverse, complex and demand a broad technology portfolio that must be integrated quickly and reliably. These systems must also be agile, sustainable and powerful. With a deep understanding of the plastics industry Lean.IQ developed fully integrated solutions that enable shop-floor connectivity with a mix of on-premise and cloud-based data management as well as smart IT integration on a horizontal and vertical level. Numerous communication standards such as OPC UA and EUROMAP 77, data storage for predictive analytics and predictive maintenance as well as the digital upgrading of new and existing machines are available

Quality and reliability.

The reliability of products in the field is a key selling point and top priority, so predictive analytics and remote maintenance should be incorporated into equipment to increase uptime and limit disruptions to operations. Manufacturers can establish remote access to monitor product health and build predictive models, using field data to optimize it. A equipment manufacturer, for example, can therefore equip controllers with a mobile data connection for remote access. The same concept can apply to the manufacturer’s own equipment, with digitization improving the efficiency and effectiveness of maintenance, reducing unneeded downtime.

Demand volatility.

High volatility and unpredictability in production and the supply chain makes determining demand difficult, yet doing so is essential for decisions ranging from production planning to inventory management and staffing levels. Data-driven demand prediction can provide manufacturing leaders greater insight—for example, through statistical models that link production demand forecast to external data sources. A maker of flexible packaging film can estimate demand for its products based on targeted market forecasts.

Production variability.

Almost by definition, low-volume, high-complexity production means managing a large number of product variants, a wide range of production tasks, and close collaboration between manufacturing with engineering. Digital standard operating procedures (SOPs) and performance management can significantly improve an organization’s ability to manage the complexity. For production, manufacturers can establish remote access for SOPs from tablets, and then link jobs to SOPs to automate performance management. For example, displaying customer-specific options on devices such as Google Glass can increase efficiency and lead to better decision making.

The industrial sector will see more disruption within the next five years than it has in the past 20. To capture the growing revenue pool, incumbents must understand what the speed of change, the evolving competitive landscape, and the impact on the workforce mean for them. But the new world is very different from the one they know. They will need to shake up their business models, their approaches to competitors, and the very core of their businesses to hold their own, let alone grow, in the face of a disruptive onslaught.

In response to the disruptive forces, there is the need for agility. Yet there is a huge mismatch between understanding the need for speed and taking measures to achieve it.

In order to get an idea on the components of successful digital transformation, let's look at the the lessons of hidden champions in this field:

1. Leadership and goals

Not only do hidden champions know what they want, but they also have the willpower and energy, sometimes the obsession, to turn their goals into actions. Leadership means that they ignite this fire in many people of different nationalities and cultures.

2. High-performance staff

Hidden champions create - and profit from - conditions that generate extremely low turnover. High performance can only be achieved with a team that has strong motivation and identification with the company. The basis for this is the selection of the right employees.

3. Decentralization

Some hidden champions face growth limits with their narrow markets and high market shares. They take the step into diversification. In order not to jeopardize their traditional strengths, they choose consistent decentralization - usually all the way to legally independent companies.

4. Focus

Focusing is usually the only chance to become world class. Hidden champions focus their limited resources better than others and stay in that direction until they reach the top position. The definition of the playing field itself is part of the focus.

5. Globalization

Nothing changes the world more than globalization over the next few decades. For companies that use this change, tremendous growth opportunities open up. However, building global production and distribution systems often takes several generations. First, the internationalization of sales, then follows the staff and last but not least the management. Most Hidden Champions are right in the middle of this process with their strategies and practice. Simon: "To seize the opportunities, you have to abandon your national restrictions and bring great stamina."

6. Innovation

Most hidden champions are planning massive innovation activities. They integrate market and technology as equal driving forces. This balance succeeds only a few large companies. Innovation is first and foremost a question of creativity and quality - not just a matter of money.

7. Customer proximity

Customer orientation is more important to the success of hidden champions than competitive orientation. The long-standing customer relationship is their greatest strength. After all, high performance for customers automatically leads to competitive advantages. Simon: "Use top customers similar to top competitors as power drivers.

So why not get in contact with us and get a complementary assessment of your shopfloor activities - after a short interview session we will provide you with an individual proposal on how to pick low hanging fruits with an immediate effect on profitability and effectiveness. When this sounds interesting and match with your strategic plans we are more than happy to continue with a detailed analysis and a solution design.