Cost leadership as a competitive advantage in the print and packaging industry
Just as is the case of all other European sectors, the print and packaging industry needs to cut costs in order to remain competitive. The biggest challenges in print and packaging are associated with automation and standardization.
The standardization of processes is the key. However, this standardization is restricted by the need to support different markets and industries as well as the underlying customer structures. The challenge is to identify how much standardization is necessary and yet to still be flexible enough to react to changes and special requests from customers.
The degree of automation is limited by the potential cost savings achievable and the increase in profits, i.e. in terms of total costs. In-company logistics and shipping represent two areas in which automation is already widespread due to the fact that the processes in these areas are generally standardized. Automation in the area of product development and design management is an issue which is now gaining more attention.
This relates to the interaction between customers and producers, the exchange of illustrations, designs, print data and 3D animations. It even includes price calculations, change management and the various customer acceptances- all based on clearly defined workflows in order to reduce throughput times and eliminate errors.
The response time is critical. Ideally, the throughput times can be reduced to the production times, and response times to just a few mouse clicks.
Key issue: sequence-optimized planning
It is particularly important to reduce set-up times in the case of increasingly smaller lot sizes.
This is achieved, to some extent, by means of standardizing production processes. A far greater role, however, is played by production planning. What is the optimal sequence? Which orders can be combined? What impact does a postponement have on my stock of materials? Optimized sequence planning saves costly color changes in printing and tool changes in other areas, eliminating set-up times.
A key role in this optimization is played by the order type – is it a new order or a repeat order?
In the case of a repeat order, everything seems clear. The machines already know the settings and the set-up times can be shortened. Real-time responses from the machines enable production planning to be automatically updated, meaning that bottlenecks and postponements are highlighted immediately.
Practice has shown that apparent repeat orders are often not actually repeat orders. The use of different machines, the use of alternative materials have to be taken into account. Or maybe a change in the quantity ordered can now make combined printing a viable option?
These many possible reasons, together with the short quantity-related and commitment deadlines (on-demand) lead to a very complicated planning schedule that is still updated manually in many cases.
Adding automation in this area is a question of artificial intelligence and machine learning. The key is finding the optimal balance. Values from the past are taken into account as well as material and tool availability. This only works as a whole when the data (deadlines, quantities, conditions) are also correct.
On the daily basis, keeping the data quality high is the greatest challenge. Standards are indispensable here, as is a high degree of automation, so that multiple inputs are no longer necessary.
The complexity increases further due to the fact that, in many cases, the product (design) is only finalized long after the production order has been approved and the necessary tools and materials have been purchased. At this point in time, the design is still being changed and revised. This scenario is quite possible in offset printing today.
Electronic integration of customers and vendors
This integration is another area in which cost savings can be achieved. Customer orders and inquiries are transmitted and processed electronically. Double entries are no longer required and process reliability increases. The same is true for the delivery note and the invoice. The electronic integration of vendors makes it possible to simplify incoming goods processes and to optimize inventory management. The aim is to reduce inventories and yet still have the materials available for production in good time.
New technologies act as innovators
Digital printing is a great example how new technologies shape markets. Digital printing allows folding boxes or labels to be individualized – to achieve special effects or unique labelling. Data glasses and augmented reality are developments which are making inroads in the areas of maintenance as well as on the customer side. The question is: How will products be perceived in future? The winners will be those companies which are open to innovations, which identify the potential of new technologies, and which are able to integrate these into their product portfolio earliest.
The 360-degree perspective
A 360-degree perspective of the customer and the market is the key. It is also important to make relevant information available and to avoid having to search for them. This means that, when a customer calls or sends an email, all of the relevant data about their orders, products and prices are readily available. Various perspectives of the data and trend analyses help you understand developments and prepare forecasts of the future.
Companies implementing these elements into their processes will earn competitive advantages:
- Cost reductions by means of automatization, especially by optimized planning.
- Increased material efficiency and reduced throughput times by means of standardization.
- Reduction of inventory by means of optimal inventory management coordinated with customers and vendors.
- Integration of new technologies and processes.