During our next installment of QAD Tomorrow on December 1, 2021, we’ll focus on how manufacturers adopting digital solutions are future proofing their operations. For the packaging industry, digital manufacturing solutions must help manufacturers produce the right stuff at the right time as optimally as possible and then support the decisions of what to produce next. Simplistically speaking, that might boil down to three sets of information: material availability, equipment/labor status, and the up-to-date order priority in context with all the possibilities.
Having real-time information, or “one version of the truth,” across all relevant departments about materials, equipment/labor and order priority is critical for strategic decision-making. Digital manufacturing solutions share real-time data and integrate all departments, from planning and scheduling to quality and shop floor control, to reduce costs, achieve good quality and deliver exceptional customer experiences. The ability to plan, execute, monitor and adapt is improved by digital solutions.
Challenges Facing Packagers
The reality in the packaging industry is often this: the planning department has a view of what needs to happen on the factory floor to satisfy demand around the current customer and channel priorities. The operations department has that same view, however, it often gets lost in a spreadsheet that is only updated once a week during a meeting. Technology and the adoption of digital transformation mean decisions are based on reality and facts – “one version of the truth” – rather than gut feelings or doing what was always done in the past.
Outdated legacy solutions create stumbling blocks for manufacturers seeking optimal decision-making. So often they have competing versions of “the truth”. For example, material status and inventory levels are only available from a disconnected warehouse system. Manual processes for recording equipment status and active order status on paper documents occur at the end of the day or shift rather than in real time. Spreadsheets are only updated for the weekly production meetings and don’t reflect the changing priorities. The results?
- Wasted resources prepping machinery and labor without the necessary raw materials or components
- Way too much work in progress inventory
- Over or under production of orders that don’t really line up with customer needs
As we’ve written before, disruption is nothing new for the packaging industry. Packaging manufacturers are expected to be innovative with new and customized product offerings while being sustainable and able to customize quickly. Even without the pandemic, the packaging industry faces a constant flood of new SKUs, a strong demand for sustainability that can overwhelm supply chain resources and logistics, storage and transportation issues, and the whimsy of customer demands and fads. By investing in digital solutions, packaging manufacturers can improve information flows and real-time data, promote collaboration and achieve better decision-making. Digital connectivity equals real-time visibility of every piece of manufacturing operations, from inventory and incoming shipments to production, finished product inventory and outgoing shipments.
A Good Time to Be in Packaging
Despite the constant challenges the industry is accustomed to facing, now is an excellent time to be in the packaging industry. Demand is constant and those manufacturers with sufficient capacity can respond favorably to the demand. Also, the industry has seen a recent trend of being able to pass along price hikes from packaging made of high-priced oil-based materials to consumers – not always the case in the past.
In their Packaging Industry Update for October 2021, Capstone Partners investment banking firm projects that packaging manufacturers will continue to experience strong demand from consumer online shopping, rising per capita income and growing industrial production. At the same time, those packaging manufacturers serving certain market segments or developing sustainable solutions will continue to attract buyer interest, further fueling significant merger and acquisition activity in the industry.
What’s Next?
To ride the wave of success the packaging industry is currently enjoying, manufacturers need to look to digital transformation, which not only provides “one version of the truth” but also optimizes decision-making and future planning. For asset-rich packaging manufacturers, the goal is to have aligned operations, using the right balance of resources, energy and labor.
To learn more about the benefits of digital manufacturing, register for QAD Tomorrow: A Digital Manufacturing Broadcast on December 1, 2021.
Very informative article