In-depth | The Main Challenges And Countermeasures Facing The Global Packaging And Processing Industry!

In-depth | The main challenges and countermeasures facing the global packaging and processing industry!

When we asked all respondents, including CPG companies such as consumer packaged goods companies (CPGs) and original equipment manufacturers (OEMs), to tell us about their top three operational priorities, labor was the first topic that came up. This is not surprising, as multiple economies around the world, including the United States, are currently facing unprecedented labor shortages. This is not just an issue affecting the packaging and processing industries, but a trend issue facing the entire global economy.

However, we believe that the focus on staffing will go far beyond the current staffing shortage. Through in-depth research, we found that many are clearly related to the epidemic, and many are clearly not related to the epidemic. Comments like "Growing businesses in a tight labor market" are common, but they go far beyond that. The second problem is finding technically qualified personnel, a problem that existed long before the pandemic. A particularly telling comment was "finding and hiring people willing to invest in manufacturing". Again, this is nothing new and has nothing to do with the pandemic. There is no doubt that manufacturing, as a career choice, has long been regarded as a traditional industry by young people.

At the end of the day, everyone in the manufacturing value chain has a responsibility to inform young people that what they understand is one-sided and that manufacturing itself provides rewarding, well-paying jobs. Due to its strategic importance, and the growth of exciting new technology-related capabilities such as the Industrial Internet of Things (IIoT) and Industry 4.0, the recent conversation around the need to re-support manufacturing may be young people marketing manufacturing as their future career option A very good topic.

The second-ranked operational focus is automation. When asked to rank their top three priorities, one particularly memorable answer from one consumer packaged goods company was "automation." It should be clear that this goes hand-in-hand with the workforce-first link. Like labor shortages, automation is a trend that was already in development before the pandemic, but like labor shortages, the current COVID-19 pandemic has given a huge boost to automation, causing many companies to speed up their automation plans. Many smaller companies have now tried for the first time advanced automation to manage staffing issues related to the pandemic. Now that they have tasted this sweetness, they will invest more in the future.

Beyond the pandemic, broader trends in Industrial IoT and Industry 4.0 technologies underscore the long-term competitive need for packaging companies to automate. To stay in business in the long run, everyone in the packaging and processing industry needs to think about automation. And from an employee attraction perspective, a high level of automation is a great way to do that. An automated business will reduce the monotonous jobs that gave manufacturing a “bad reputation” in the first place, because an automated business is a high-productivity business, and higher productivity means higher wages for employees.

This leads us to our third priority - productivity. In many ways, productivity is a combination of staffing and automation, and such comments are common, such as improving manufacturing efficiency, gaining more productivity from existing assets; increasing productivity by increasing speed and automating labor activities. But beyond these concerns, the biggest concerns are improving overall equipment effectiveness (OEE), improving on-time deliveries, meeting customer deadlines, and time-to-market. The chart below outlines the priorities for all of the consumer packaged goods we found.

automation

The next part of our research focuses on the key challenges of packaging and processing operations, and how to address them. We divided this research into four main areas: automation, operators, packaging forms, designs and materials, and third-party services.

A notable type of automation challenge that is repeatedly mentioned in consumer packaged goods is the lack of flexibility of many current automation solutions. Currently, CPG companies struggle with a lack of common components and industry standards, as well as automation suites that do not easily integrate with leading ERP or warehouse management systems (WMS). To address this, a basic definition of consumer packaged goods requires a common standard that all OEMs and customers can agree on.

Many automation solutions today operate as closed systems, which means CPG companies rely on suppliers for technical support. Adopting an open architecture would be an easy way to allow technical support and continuous improvement activities to be managed internally when needed. Finally, many current automated machines are typically designed to do just one thing and simply aren't flexible enough to meet changing customer demands. Contrary to, but related to, a different perspective from CPG companies - the constant changes in formats, and the changes in design and packaging form.

Another topic related to automation are issues related to IIoT and Industry 4.0. In particular, respondents mentioned the challenges of collecting data and cybersecurity. Some CPG companies are calling for help understanding the return on investment to justify funding for new technology. Another spoke about their own need to stay up-to-date on what new technologies like AR, VR and IoT actually have to offer in practice. A consumer packaged goods company called for a better understanding of all options, not just what OEMs want to sell.

Clearly, OEMs have a responsibility to help CPG companies learn how to collect data and keep their networks safe, and OEMs should develop simple ROI calculations that can be applied to CPG company settings. An original equipment manufacturer said it plans to form a partnership with a well-known cybersecurity firm to ensure their machines are as safe as possible when installed at a consumer packaged goods company. Another spoke about the need to work with consumer packaged goods companies to better understand what types of remote monitoring technologies are acceptable.

Another important theme is the lead time for automated machinery, which can be long at the moment and thus does not help address the current labor shortage. An OEM cited strong demand and severe supply chain issues as reasons for the longer lead times. One response from CPG companies suggested that OEMs need to be more creative in machine design and use alternative components when supply chain issues cause delays. Finally, some CPG companies are calling on their OEMs to work more closely with them into partnerships. Another CPG company advice: OEMs should advise and become partners.

OEMs themselves have commented that they do plan to better listen to CPG companies to learn more about their production and market challenges. Better communication would obviously help. But one of the issues involved is cost, with some CPG companies complaining about the high cost of automation solutions, with one company commenting that when it comes to automating small-scale production lines, cost often makes it unfeasible. The suggestion for this is to enter into a lease agreement, and it seems that offering "machinery as a service" might be a good option.

Operator

The main challenge on the operational staff side is clear: Organizations simply can't get the people they need. This is a problem for both skilled and unskilled employees.

Both OEMs and CPG companies have emphasized the need to engage their employees to retain talent. One great way to do this is to use automation to remove the more monotonous aspects of the job, another is to provide better education and training. Some CPG companies specifically require OEMs to participate in training and teach their employees how to operate machines. A consumer packaged goods company said OEMs need structured training packages for new equipment installations.

Additionally, OEMs are being asked to increase the level of remote support offered to reduce the need for CPG companies to hire support engineers themselves. An example of a consumer packaged goods company complaint is that OEMs simply do not have adequate technical support. For OEMs themselves, it's important to remember that remote technical support is a potentially very important revenue stream.

There's been a lot of talk about the need for automation to address labor shortages, but it's clear that employers don't want to lay off workers, they want to reschedule. And it's clear that CPG companies are considering promotions from within, as well as the need for improved training and career development. One interviewee spoke of their need to better understand how to help employees with job transitions, citing their own reasoning, workforce transition.

Another respondent said that lean principles should be incorporated into the design and layout of all equipment, and OEMs should consider this when building machinery because lean principles are just as important as automation when it comes to reducing labor requirements.

In addition, OEMs and CPG companies are focusing on improving their compensation and conditions. The solution discussed further is to stop relying on temporary workers and work harder to offer full-time positions to encourage commitment. Such measures should also be effective in reducing the contentious issues of high employee turnover and absenteeism. A consumer packaged goods company said it was not enough to increase wages, and they called on the government to further guide the work to raise wages and living standards more than no work.

Increasing flexibility in the workplace is also what respondents found increasingly demanding from employees, and while this can be challenging in a factory setting, increasing flexibility where possible would help address the aforementioned concerns, Namely, manufacturing is not seen as a career option for ideal young people at all. The same goes for the many efforts to work more closely with schools and colleges to recruit young people.

There is no doubt that competition for technicians is fierce between OEMs and CPG companies. Ensuring that all new OEM-built machines are easy to use for inexperienced novices will help CPG companies overcome the problem of hiring skilled workers.

Packaging form, design and materials

Packaging has always been a rapidly evolving industry in terms of form, design and materials. This is especially true of current materials, as consumers and lawmakers increasingly demand greener solutions. An increasingly competitive and e-commerce-driven market is also driving innovative packaging designs, which often require new machinery to implement. Given the changing volumes, machine flexibility is key, fast changeover times and future-proof machines to handle new materials are an absolute must. As one OEM told us, packaging lines of the future will need to be more flexible. The problem was magnified when the pandemic caused consumer buying habits to change overnight.

Improved industry partnerships were repeatedly cited as the solution to many of the challenges faced by all respondents in terms of packaging format, design and materials. Consumer packaged goods companies plan to work more closely with all suppliers, including OEMs, to better understand supply chains and with their regulatory teams to better understand upcoming legislation around sustainable materials Variety. But communication needs to go both ways, and CPG companies report that they are always looking to OEMs for new ideas and technologies to help find creative solutions to problems.

Particular challenges that can be addressed through improved partnerships are ensuring machinery can handle recyclable and/or biodegradable materials, as well as new and innovative packaging designs that often lead to inefficiencies in factories while boosting sales. The solution to this is that CPG companies can also facilitate communication between their OEMs and their own material suppliers and marketing departments. Many CPG companies also cited the need to improve market understanding and forecasting of emerging issues, such as post-consumer recycled materials.

Balancing reducing the environmental impact of packaging with a good customer experience, while keeping new sustainable packaging forms simple and easy to produce, is also a key issue. Ultimately, the market needs to come together to develop common sustainability standards that are acceptable to all. Currently, the ambiguity of the word sustainability itself is a problem. One consumer packaged goods company described the frustration as the challenge of finding "sustainable" packaging, whatever that means.

OEMs in particular have spoken of their concerns about ensuring the latest biodegradable materials can run on their equipment. There are also issues with the speed at which new materials are introduced. Consumer packaged goods companies want machines to run for years, so machines need to be able to accommodate materials that haven't been tested. As a result, OEMs must focus on developing capabilities that support troubleshooting around new raw materials.

The lead time and cost of packaging raw materials has long been considered one of the biggest challenges facing CPG companies. Solving this problem is also a significant challenge, and somewhat beyond the control of the OEM or CPG company. But reducing raw material waste is a clear solution to increasing packaging costs, and choosing a local raw material supplier, or producing raw materials onshore or near shore, are also possible solutions.

Third Party Services

The last key challenge we see is third-party services, especially contract packaging, big data, maintenance, and machine-as-a-service. Not surprisingly, the main driver of all third-party services is labor shortages.

There is no doubt that OEMs offering repair service packages will experience strong demand. A consumer packaged goods company said the availability of local service and support was an important factor in their selection of equipment suppliers. Another, when asked about their attitude towards using third-party support, replied: More of these services are needed.

The problem, as many OEMs and CPG companies have reported, is that third-party contractors themselves face labor shortages: finding the right suppliers to meet most of our limited capacity and resources as we do Our external needs are very difficult.

However, in an age of labor shortages, it is clear that using third-party contractors whenever possible is the way to go. This is because third-party contractors can use labor more efficiently by spreading personnel across multiple clients. The engineering staff of third-party contractors quickly became more skilled than their in-house counterparts due to the variety of problems encountered. To ensure that CPG companies have access to third-party support when needed, a strong partnership, such as a formal master service agreement, is critical.

Another great way for CPG companies to gain better access to the coveted skills of third-party technicians is if they embrace the possibility of remote service. The COVID-19 push for remote work is proving that key steps can be done remotely, made possible by IIoT and Industry 4.0 technologies.

As mentioned earlier, this requires data collection, fast and secure machine connections, and strong network security. But for consumer packaged goods companies that overcome these challenges, the odds are high. If a consumer packaged goods company can provide secure remote access