In Part One of The Value Proposition for Digital Package Printing, we discussed the operations (material and operations planning) and marketing benefits relating to digital printing. Recognizing the reality of this operations and marketing dual purpose for digital, we break the compelling reasons for digital printing in packaging into two tracks.
- Track 1– Utilizes digital printing capabilities where it can eliminate cost and relieve operational issues.
- Track 2 – Utilizes digital printing capabilities where it can provide marketing advantages.
The days of one-way messaging through TV or print ads to appeal to consumers’ purchasing decisions have given way to “engagement marketing”. Two-dimensional (two-way) communication where consumers participate, share, and interact with a brand creates crucial interaction resulting in business and personal success. The bi-directional nature of social media enables a two-way marketing channel.Continue reading
The digital age is changing our world. Forces driving the change are: people, information and technology.
In our report; Is Digital Printing Part of Your Brand or Operational Strategy? We describe how technological advances with the Web, computers, mobile phones and tablets enable billions of people to connect all over the world, including a burgeoning number of consumers in emerging markets. And this worldwide connectivity has led to continued growth in methods of electronic information exchange. We now live in the social media world of Facebook, LinkedIn, blogs, tweets, Skype and streaming video, all feeding into daily tidal waves of information. We receive news and information right in the palm of our hands in near real time.Continue reading
Kevin and Mike talk about what was shown at Label Expo 13. How this was more than just Labels… But packaging in general.Continue reading
Digital Solutions for Packaging at drupa 2012: Part IV A deeper look at Unmet Needs in Package Printing
This post builds on Part Three of the series and continues to expand on our new report, 2012 drupa Packaging Review – Folding Carton Report where we explore what vendors showed at drupa 2012 it is important to understand what challenges their customers are facing. Karstedt Partners in collaboration with Mike Ferrari of Ferrari Innovative Solutions has developed a series of graphic depictions to help illustrate the dynamics affecting the packaging supply chain. The first diagram shows the revised view of the packaging lifecycle for a typical product. To review, segments “A” and “B” align with special requirements, for either new product launches or promotional activity. Segments “C”, “D” and “E” focus on the management of active products. The supply chain focus is on segment “D”, the mainline or long run requirements, as this is desired business in a capital-intensive business such as packaging.
The Packaging Lifecycle – Revised View
Source: Karstedt Partners, LLC
This next graphic shows how the demand stream coming from the tails of the lifecycle diagram, quadrants A, B, C and E are driving 70% of orders but only 30% of volume and how that has shifted and is causing major problems in meeting the needs/
Impact of SKU Proliferation on Converters – The New Operational Reality
Source: Karstedt Partners
In the following illustration the yellow box represents the increased inefficiencies created through additional low volume production demands. In a capital-intensive business, profitability risk is far greater in the new model due to the extended time getting to volume runs, and the resulting overall lower capacity due to more production set-ups and greater inefficiencies.
Change in Demand Brings Inefficacies
Source: Karstedt Partners
The reality of the situation is when productivity enhancements are considered over a typical production period the overall impact on most converters is a net decline in capacity, as productivity enhancements have contributed to greater thru-put. Additional SKU proliferation, increasing demand from an improved economy, and limited options for additional productivity improvements from existing equipment and processes is straining operational capability.
The reduction in overall thru-put is also having a negative impact on profitability. This “perfect storm” is forcing converters to re-think their operational model. Converters commonly use the term “flexibility” to define what they are seeking. The perfect solution is a press that combines high productivity, print quality, converting and finishing options, media flexibility, at the lowest cost. Absent the “total solution”, converters are seeking to create a broader operational platform to manage variations in daily production demand. For years, converters have upgraded production presses, and have moved non-conforming production demand to older presses to improve productivity. Product requirements, along with changes in press technology, are creating problems around the traditional practice of being able to move demand from one press to another. Converters recognize that specific solutions are now required to manage specific requirements for print as well as converting. The needs of the customer, as well as the needs of the business, now require multiple options for printing and converting.
Series Overview: True to its history of introducing new technology to the printing world, drupa 2012 offered plenty of new things. In addition it showcased a great deal of packaging specific offerings in printing and finishing technologies. If drupa 2008 was “The Inkjet drupa” this time around it was surely “The; ‘we think we have a digital solution for packaging’ drupa”. Karstedt Partners spent 10-man days on the floor meeting with equipment suppliers, users, journalists and pundits evaluating what was being offered by vendors, and what was being asked for by users. This 4 part series of posts offers an overview of what we learned from these meetings and can share with those interested in our opinions and observations. The full 61-page report is available by clicking here.