Digitization is creating a new era in packaging design for companies. It allows packaging to be personalized to a specific customer, while also providing opportunity for faster response times to concerns and suggestions. Digitization is not only evolving the packaging industry, but it also can help packaging manufacturers keep up with higher demand. While manufacturers strive to find ways to implement digitization into their processes, adhesives can help them meet demand as the changes continue.
Growth of Digitization in Packaging
There are a number of trends happening involving digitization. This is expected to impact the growth and potential profits of packaging manufacturers over the next decade and how adhesives will be utilized. The reasons for changes in the markets include:
E-commerce demand: According to David Feber, Partner at McKinsey & Company, ecommerce sales have grown 17% in the past five years compared to brick and mortar retailers. He says a massive growth trend is expected to continue among e-commerce and direct-to-consumer shipping. This, however, brings new challenges for manufacturers to develop durable packaging. They must create packaging that is able to withstand potential dropping or damage, while also considering weight, sustainability and cost.
Consumer customization & preferences: The rise in demand for morecustomer personalization is now leading to big expansions in SKU production. For example, customers have the ability to scour the internet for thousands of options for the product they want, rather than settle for ten options available at a big box store. With more affordable product options available, the customer is now looking for more variety, customization and convenience. This impacts the speed of production lines, and how much down time the manufacturer can afford with development processes, including the choice of adhesives used. Choosing an adhesive with a long dry time or with many preparation needs may slow your process.
Sustainability pressures: Not only arecompanies making more effort to be sustainable, customers are seeking out these values in the brands they support. The public has become more aware of the environmental risks of plastics leakage, which has led to governments increasing legislation related to packaging. Packaging manufacturers, however, share concernsabout what options this leaves them with in creating durable, environmentally friendly packaging, which also involves their options for adhesives.As a result, recyclable or compostable adhesives may become more popular as sustainability pressures rise.
Challenges of changing market and consumer preferences
These growing demands are forcing packaging manufacturers to find more digitizing processes to address both manufacturing needs and requirements for customization. These changes could cause financial strain on manufacturers if they are not properly prepared to address them. Manufacturers must make decisions on ways to evolve, otherwise they may get caught in a domino effect with producing enough packaging materials. Choosing the right adhesives is one way they can find cost effective solutions while also introducing digitized production lines. There are a number of strategies packaging manufacturers have already started implementing, including:
Collaborating to adjust SKU proliferation: Whilemany packaging companies are set up for developing a high volume at an efficient speed, the need to become more flexible for customization and SKU proliferation is increasing. The right adhesive can enable you to provide customization while using the equipment already found in your lab. As manufacturers develop partnerships with digital strategists to see potential trends down the road, it is still possible to find an adhesive that provides strong bonding, little downtime on the production line, keep packaging lightweight and sustainable, while being cost effective.
Automation proving strong ROI: According to Omdia, revenues in artificial intelligence will reach near $100 billion globally by 2025. This creates new opportunity for adhesives to be utilized effectively through automated production methods, ensuring manufacturers of consistent high supply chain production, accuracy in processes and maximum efficiency.
R&D Investment: Digitization allows us to collect data and analytics. This can help identify pain points on either end of manufacturing or end consumer product, to find solutions faster. Through this process, manufacturers can decide where the usage of adhesives would be most effective in their production lines. This can lead to finding ways to produce large quantities of products that still allow for customization. Adhesives can provide a range of opportunities that will still provide durability and longevity even if manufacturers need to change some of their processes to keep up with demand, including switching to new sustainable materials.
How Bostik Can Provide Packaging Supply Chain Solutions
Bostik does more than just sell adhesives. Our products can provide solutions to foster efficiency in production lines, and help you meet demands for customization. The Bostik team has an end-to-end perspective to ensure total system optimization, understanding all aspects of packaging supply chain risks and values. This can save your company time and resources, maximize productivity, and continue customer loyalty. We do this by addressing the following:
Customer experience: Bostik is on a long-term digital transformation journey to change the way we interact with customers and how the customers experience that interaction. For example, we’re transforming out order management process to make product ordering more responsive to customer needs. Through collaborative planning with customers, we strive to fully assess and understand the needs and necessary changes in supply chain, especially with the growth of digitization. This involves focus on versatility, getting products to customers where, when and how they want them.
Supply continuity: As a global company backed by Arkema, the parent company of Bostik, we are able to work towards continual supply of both raw materials from suppliers and adhesive products to customers. With Bostik’s best-in-class product formulation technologies, extensive customer knowledge and production sites across the globe, we provide end-to-end supply continuity even with growing demand challenges. Bostik is capable of meeting region-specific regulatory requirements, and our global perspective helps maximize production efficiencies at an affordable cost.
Automation: Automation allows Bostik to maximize production efficiency and turn greater quantities from its facilities. This helps optimize our regional production capacity with room to spare if needed, without excessive personnel overhead costs. We can also provide your company with adhesives that are extremely compatible with automated systems.
Supply Security: The ability to use raw materials worldwide allows us to maximize supply security and take advantage of local, affordable costs. Bostik also works to improve the quality of local raw material suppliers to meet the high performance demands of global brands.
Thinking about ways you can integrate digitization into your packaging supply chain? Contact a Bostik representative today to learn how we can help.
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