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WTT: Thoughts from the Smithers Pira Digital Print for Packaging Conference

I had the privilege last week of attending the Smithers Pira Conference in Atlanta on the topic of Digital Printing for Packaging. Having been on the advisory board for the conference it was rewarding to see the fruits of our labor being so well received by those in attendance. Together with Tom Cooper of RockTenn, Aditya (Andy) Dwivedi of Xeikon, Eli Israeli of HP Scitex and Sean Smyth of Smithers Pira the advisory board brought a wide range of speakers to discuss not only where digital is today but where it is headed and most importantly, what needs to be addressed by the marketplace to get it there. To guide us down this path we assembled speakers that understand supply chain optimization, packaging, graphics, color management, workflow and digital printing. Then we arranged them to weave a coherent message looking at what is currently being done with digital and what can be done.

Day one opened with digital packaging pioneer Bob Scherer of CL&D Digital who spoke eloquently on how brand owners are currently using digital printing for successful branding programs. He gave examples of working with the multiple functioning groups within a brand (marketing, operations, purchasing) to get buy-in to a program and compromises that are needed to make the most successful program. One story illustrated how compromise allowed the project to work when the engineering group had to “give a little” by allowing 1/16th of an inch to be shaved off the top and bottom of a pouch. This would allow the pouch to run two across the web and allowed the job to meet the cost objectives for the project. Initial reluctance by the engineering group gave way to compromise and a successful project.

Later in day one, Jim Goldman of Global Innovation Professionals, and former Senior Supply Chain Manager for Coke, spoke on how supply chains within a brand are viewed and how digital printing could aid in the reduction in process steps and even entire process channels. Jim’s talk was extremely interesting and I would like to focus on two of his points in this article. The first point is an echo from Bob Scherer’s discussion that a Brand Owner is really a collection of many entities; marketing, procurement, engineering, design, legal, operations, QA, finance, sales, packaging and others. Jim highlighted that each group has different motivations and different metrics they are measured against. This makes it difficult to modify a part of the supply chain that crosses over many different parts of a company such as packaging.

Jim’s second point was more of an illustration. He gave two examples of how supply chain optimization occurred in the beverage industry that eliminated entire process channels. Both these examples were seen as major disruptions to the existing processes and were not embraced easily by those most immediately affected. However both are now standard practices. The first example is one that we in the printing industry can easily relate to, the use of on-site ink blending. Historically, ink manufactures would send mixed, press ready, inks to can manufacturers for use in decorating cans that were then shipped to the bottling plants. Most of the volume of an ink used in metal decorating is in the ink base, a small proportion of the ink volume is from the colorant. To reduce blended ink inventories and handling costs the process was changed so inks were blended from base and colorants to press ready inks in an ink kitchen on-site at the can manufactures facility.

The second example Jim gave centers around shipping air. Historically plastic bottles were blow molded and shipped to the bottling plant for filling. This sub-process required shipping millions of empty bottles around the country that we filled with air. In looking at the process from a broader prospective the idea of moving the blow molding process to the filling lines was born. Pushback to this idea most surely was strong. I can hear the argument now “if the bottle line goes down it will shut down the filling line, and where is the money made?” But today the practice is almost universal. Both in-house ink formulation and bottle blow molding process changes were not readily accepted by constituents at the time but are now standard operating practices. Both process changes took full process channels out of the supply chain and saved both time and money.

Just-in-time manufacturing and near-line (whole in the wall manufacturing as they call it in Europe) production of packaging materials are the initial steps to making a similar change in where packaging materials are produced. Sure there are a lot of reasons why it “can’t” be done. Just as there were reasons bottles could not be made in-line with bottling and why inks need to be mixed at the factory. But digital printing is not called a disruptive technology for nothing.

The advisory board planned on having panel discussions with the speakers at the end of each day’s presentations. Going into the conference there was much “buzz” around the recent European Coke Label Customization project and we fully expected the speaker panel to be asked for particulars on that topic. Surprisingly, day one’s panel discussion centered on brands bringing package printing in-house; it’s probability and it’s affect on package printers. Day two’s panel discussion was driven from the floor by a brand owner who had leapfrogged the idea of digital printing and went to the higher question of how can the entire process of product development and deployment be monitored and managed.

Coming out of this conference I feel a Sea Change in how the packaging supply chain is being looked at from both inside and outside of it’s own body. We used the analogy of an umbrella for how we wanted to discus digital printing for this conference. The handle of the umbrella represents the tactical uses of digital printing; the special labeling project, the new wider format web presses coming to market, the new digital die cutting systems being developed. While the top of the umbrella represents all the other things in the process that affect the handle; process management, color management, workflow, and integration with MIS and ERP systems. The top of the umbrella is represents the things that both day one and day two panel discussions were aimed at trying to understand. The big picture of where and how the supply chain will use digital printing and how the supply chain will be altered over the next decade.

For those of us who have been around digital for many years we hear the same statement over and over again, “It’s not a matter of IF we get involved, it’s a matter of WHEN”. By half way through the second day I realized that I had not heard anyone say that statement!  So holding my metaphorical umbrella I closed the conference by saying we have a new mantra; Digital for packaging is NOW, the question that remains is HOW.”

This article was originally posted on WhatTheyThink.com on 6/21/13.

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Digital Solutions for Packaging at drupa 2012: Part II – Press Manufacturers Changing Messages

Relative to digital printing for packaging, drupa 2008 was a time for investigation and generalized discussion regarding product concepts and market requirements. Drupa 2012 delivered a variety of solution targeting a broad range of packaging markets that attracted the attention of converters present at the show. The focus on packaging was not limited exclusively to developers of digital presses. Also well represented were pre-press and converting solutions to support digital presses in a packaging environment. The magnitude of the investment made at all levels of the supply chain over the past four years validates the packaging market as a catalyst for future growth in digital printing. This bodes well for the packaging industry.

Analog Printing for Packaging

Several items stand out from the interviews:

  • Traditional press manufacturers are focusing on driving down waste and reducing make-ready time. Press demonstrations were showing four-color press changeovers occurring in less than 15 minutes. Omet has redesigned their process for registering print, reducing scrap from typical 200-300 sheet quantities to 2.5 meters.
  • Traditional press suppliers are no longer ignoring the impact of digital printing. KBA, Heidelberg, ManRoland, Komori, Mitsubishi, Bobst and Omet were all discussing plans and options for digital printing.
  • Packaging is a growth opportunity for most traditional analog suppliers. Demand for packaging historically tracks to GDP, and unlike the Commercial Print Market, demand for printed packaging will benefit from digital media, rather than be harmed by it.
  • Several traditional press manufacturers stated a nuisance order for Folding Carton is any order less than 5,000 impressions, 20,000 impressions are considered a standard run. One supplier estimated 65% of production jobs are less than 20,000 impressions. Whatever the actual numbers may be, the point is, regardless of how the jobs are run, individually on a narrow width press, or ganged on a wide press, changes in the order flow are creating headaches for the printer.

Different marketing messages yield different results

There is a stark contrast in the marketing messages delivered between traditional and analog press suppliers. Analog suppliers speak about productivity and flexibility. Digital suppliers speak about one-to-one marketing, personalization, and customization. In terms of productivity, analog suppliers speak in terms of sheets produced per hour, using the sheet size as a reference point. Digital suppliers also speak in terms of sheets per hour, but use terminology such as B1 or B2 size configurations that are foreign to most North American Converters. The prospect for both suppliers is typically a converter, so why is there a difference in the message conveyed, and what is the impact on the converter? We spoke with several converters that attended drupa to gain their thoughts; following are a few comments on the topic.

  • “With economic uncertainty continuing, our business focus is on doing more with less. That means how we continue to grow the volume and produce it for less. Fewer people, less expense, and less material are a way of life in our business. Digital technologies can certainly play a critical role in fulfilling that need, but digital suppliers must learn how to connect their technology to my immediate need. One to one marketing is nice, but the supply chain from the Brand Owner to the Converter cannot manage one-to-one marketing campaigns today”.
  • “What constitutes a low volume run? Digital printing is not about managing to a theoretical run volume, it is about increasing the utilization of high volume assets.”

Drupa attendees seeking packaging solutions now have multiple options to consider. How will the respective technologies be positioned in the market? What is the marketing message and how do converters perceive it?

Impressions post drupa

  • Traditional analog suppliers are in a tough position. The supply base will undoubtedly experience additional contraction and consolidation. A digital solution will not solve the problems faced by analog suppliers, but it may be critical to have a solution in place to preserve a relationship with key customers.
  • Digital suppliers need to articulate the digital value proposition. The need for variable data in Commercial Printing is a critical requirement. At least initially, variable data for most packaging applications is not a critical need.
  • In speaking with several converters post drupa, we asked if digital printing is now the lowest cost investment option for incremental capacity. They believe it is, but need more information related to how much capacity it will deliver and what the impact is on current operations. The answer for which technology to pursue, traditional wide width presses versus narrow width sheet-fed digital presses, will take some time to sort out. In an uncertain economy, converters like the security of limited investment.

Winners and Losers

While all participants were claiming drupa was a tremendous success, with the exception of Landa, we saw nothing on the print side of technology that was a game changer.

On the traditional analog side, most companies in the sheetfed offset have made solid improvements in productivity, sustainability and scrap reductions. The absence of a clear winner in terms of technology typically pushes the purchasing decisions to ancillary services such as parts and service. Pre-press integration will now begin to become a larger part of the decision making process. Heidelberg and KBA will retain a dominant market position due to their strength with large companies purchasing multiple presses. Companies such as these find it convenient to have commonality in equipment throughout their facilities. Smaller participants such as Goss, Ryobi, Mitsubishi and Komori will survive as long as their customer base survives. Heidelberg and KBA continue to grow share in Asia, a historical strong hold for Komori and Ryobi. It is too early to predict the future of ManRoland. Do new customers need them as a potential supplier? Will existing customers abandon them on new press purchases, seeking greater security in other suppliers?

The introduction of combo presses and the expansion of DI technology into packaging will be intriguing to watch. Combo presses may find a niche in high value packaging applications such as beverage, cosmetics, and premium brands. The challenge these companies face is finding printers with enough volume in the target applications to justify the investment. DI technology is also interesting. It has been around for some time, and the traditional issues (no variable data capability and imaging errors in the plates) creating doubt around the investment have been addressed. The price point for this technology is below many comparable pure digital systems, with higher thru-put and a potentially lower cost of print.

On the digital side, it was interesting how toner technology stole the show. HP, Landa and Xeikon all positioned themselves as the clear market leaders. Maintaining that leadership will require delivery of successful solutions on the promises made. Surprising is the lack of any real attention to Kodak, Xerox, Konica Minolta, Epson, FujiFilm. Oce and Screen. These companies have all enjoyed success in other digital arenas, but they have thus far failed to captivate a new audience with solutions suitable to garner attention. Kodak may be a wild card with either their stream or prosper technology, but for now, only two companies, Bobst and Sun Automation have acknowledged being development partners, and both are struggling.

The third post in this series: Addressing the Unmet Needs in Packaging, will discuss what challenges face packaging converters that digital and analog systems suppliers are trying to address.

 


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.

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History Repeats Itself at Drupa 2012?

Coming out of Drupa, I see history repeating itself for digital package printing. In the early 1990s Indigo entered the narrow web labels sector with their Omnius digital press which paved the way for single pass digital printing of labels. Also in those early days Xeikon, offered the DCP/32S a dry toner press and others introduced UV inkjet single pass systems. The common theme was that all these companies entered the labels market as digital printing specialists rather than label specialists. In hindsight, I think all these vendors would admit that back then they ‘didn’t know what they didn’t know’ about the labels business. In these early the OEMs (Original Equipment Manufactures) had a very limited understanding of the business dynamics driving the labels sector.

Indigo Omnius, circa 1995

In the mid 1990s as digital label printing was gaining a slight foothold in the sector, the OEMs decided it was a good idea to bring laser die cutting into the discussion. At the time, lasers were in the early days of development for this application but showed a great deal of promise, just like the digital presses. I remember many heated discussions among vendors as to the merits of placing the laser die cutter inline with the digital press or leaving it offline as a stand-alone station – a question still being asked today. I recall seeing a very painful LabelExpo demonstration in 2004 of a MarkAndy flexo web press with the Dotrix SPICE (Single Pass Inkjet Color Engine) with laser die cutting stations added. The purpose of the demo was to show how well the “combo” would work, but problems with the laser and the rewind did not help the demo showcase a ‘solution’.

Timing is everything, and it was not viable in 2004. LabelExpo 2011 and Drupa 2012 however, featured vendors such as Jetrion among others, who showed fully integrated laser die cutting options within their new modular systems. Timely solutions, delivered to a market that is ready to adopt them into a production environment.

So what is all this talk about history? As a packaging guy this Drupa really resonated with me as  “the we think we have a digital solution for Packaging” Drupa. There were so many companies showing systems that could handle “board” and they used that as license to say they are “packaging” presses. Let’s take a look at a few digital solutions that caught most of the packaging (in this case for cartons) press (pun intended). On the digital press side the obvious introductions are those of Landa, the S10 (S standing for Sheetfed) and the HPIndigo 30000 presses that have been designed from the ground up to address folding carton production.

It is clear to me that both Landa (who by the way was the father of the first digital systems and the Indigo printing system) and HP did their homework before coming out with these presses. Both companies are building on lessons learned in the days of developing digital label systems. For example, both companies used outside expertise to expand their core strengths for component development such as sheet handling. Both went to the carton marketplace to understand the needs of carton manufactures before they came to market with a machine they thought would work. And biggest of all, both seem to understand the business and manufacturing dynamics of the carton market better than their predecessors did in the label sector 10 years ago.

The next digital carton related technology that was shown was the Euclid system by startup HighCon. This system is the first of its kind digital die cutting system for short run cartons. There is a lot written about this system so I wont go into it in detail here. I do see the Euclid as a well conceived and developed first attempt at addressing the next bottleneck in the carton workflow. I also think more systems will be seen at Drupa 2016 that address this need. I expect acceptance of digital die cutting for the carton sector will progress, as the presses will, much faster than they did in the label sector. This will be partly due to the advancement in the laser technology itself, which is significant, but more so but the understanding OEMs are seeking of the marketplace they are trying to serve.

I also commend the HighCon team for understanding that this system should not just be tied to the digital printing engines, that it has a place in all of short run cartons. This is illustrated by their collaboration with Presstek and their 75DI digital offset press. This combination can be used for economical short carton runs of 500 to 20,000 impressions. This type of collaborative thinking is happening much earlier in the development cycle for cartons than it did for labels and bodes well for the evolution of the digital process for cartons.

For these reasons and for the fact that digital printing technologies (liquid toner, dry toner, Inkjet, and now nanography) have come so far over the past decade, I feel by next Drupa digital carton presses will be seen as viable production press options rather than cool new technologies that aren’t even in beta yet.

Kudos to the OEMs for learning from the past and for looking to the future…

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Drupa Day 4: Short Run Folding Cartons

Our last day at Drupa ended up being full of promising packaging solutions, much more than we expected and we wished we could have extended our stay another few days. On the “here and now” front we had fascinating conversations with Flexo press maker Gallus in Hall 2. They give a first class presentation/demonstration of their ICS 670 press featuring inline foil, gravure, embossing, inspection and die cutting.  In a 20 minute presentation they printed 3 jobs with different inks and images. Mike Pfaff of Gallus shared with us the increased interest he is seeing by carton printers who are looking to take process and make-ready steps out of their carton manufacturing process. The carton samples from the demo run used High Quality Flexo. Watch the machine in action here:



On the offset side we stopped by the Presstek booth in Hall 4 and saw the 75 DI, an offset press which straddles the digital/analog fence. The 75 DI images offset plates on-press, and can change over in just a few minutes. It is designed to be efficient for jobs of 500 to 20,000 impressions. Mark Sullivan, Group Product Director for Presstek told me they are seeing an increase in interest in this press by Folding Carton printers looking for short run carton relief.

Optimizing Folding Carton printing and finishing operations is also the goal of development efforts by the analog press and finishing systems manufacturers as well. Heidelberg, Komori, Mitsubishi , KBA, ManRoland Sheetfed  and Bobst  all showed fast change over presses and finishing solutions that address the needs of the industry as they understand them for short run and plant efficiency.

Also showing short run digital solutions in the carton space, Xeikon in Hall 8a, continues to forge ahead with Folding Carton innovations with their 3000 series digital dry toner press. Increasing their product offering in packaging, Xeikon is also showing their ThermoFlexX line of flexo plate imagers.

While Xeikon plays the ‘here and now’ card very well, they also have a ‘futures’ trump card along with some of the other technology powerhouses. In their pre-show announcements we heard about a liquid ink toner called ‘Quantum’ which is being introduced now as High Viscosity Toner (HVT) technology now branded ‘Trillium‘. Trillium is a new liquid image development system that is extremely fast. Shown as a technology demo in one color, Trillium  will first be applied to commercial print applications. We did ask Mike Ring, President of Xeikon North America if they had packaging in their sights for Trillium, and he smiled and gave us a firm maybe…

While development efforts are strong around core technologies, the analog press manufactures have indicated (some more strongly than others) their intentions in embracing digital printing technologies as part of their product portfolio. Heidelberg, Komori and ManRoland made announcements before Drupa of agreements with Landa to integrate the Nanographic technology into new press initiatives but Landa’s is not the only digital technology being integrated. Inkjet, the darling of last drupa is still keen for integration as is liquid toner technology.

Digital printing for labels and packaging was the focus of last Drupa and those solutions are now in use and have been proven in the marketplace. We look forward to the next 4 years where we will see these concepts become reality.

Get the details of our analysis by ordering our ‘Trends Assessment of Folding Carton Solutions Report’ which will be available on our website shortly after our return from Drupa.

The report is a high level assessment of what we think the key developments are in digital printing and finishing for the Folding Carton Sector coming out of Drupa. If you would like more information or be notified when the report is available, send us an email at kevin [at] karstedt.com.

 

 

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