It is a challenging time for the UK manufacturing industry. With one of the lowest productivity levels amongst leading industrialised nations, we urgently need to do more to develop competitive advantage. Enter Industry 4.0, hailed as the future of productivity and growth in the manufacturing sector. But what is it?
Defined by McKinsey as the ‘digitisation of the manufacturing sector’, Industry 4.0 is about the pursuit of operational effectiveness, Overall Equipment Effectiveness (OEE) and the ability to achieve mass customisation at mass manufacturing prices. It is also about approaching things differently, introducing higher levels of automation and connectivity and making better use of big data. Done well, Industry 4.0 improves the industrial processes involved in manufacturing, engineering, material usage, asset performance and management. However, it also makes significant new demands of the supply chain, including packaging.
Convenience shopping: adapting to changing consumer buying behaviours
Recently, the packaging sector has found itself under pressure as a result of changing consumer buying behaviours, which have accelerated the development of convenience stores. Increasingly busy lifestyles and changes to consumer buying behaviours have seen convenience stores grow rapidly over the last few years, and this shift towards ‘little and often’ shopping has introduced a host of new challenges to the packaging industry. This includes the need to redesign packaging to ensure it is suitable for the reduced spaces afforded by convenience stores, both on shelf and in storage areas.
Furthermore, customers today demand higher levels of responsiveness, mass customisation and product availability than ever before, resulting in ever increasing pressure on inventory. Add Industry 4.0 and its focus on flexibility and seamless changeovers to this mix and you have a huge variety of items entering the supply chain faster than ever before – and all of them require packaging for transit. The result is likely to be SKU proliferation that blocks the supply chain and makes the packaging process more complicated and expensive at a time when manufacturers are trying to reduce costs and improve efficiencies wherever possible. And this situation will be further compounded by the current requirement for manufacturers to report on energy use, waste outputs and raw materials usage.
Crucially, the problem extends beyond the actual packaging to the packaging machinery. One of the benefits manufacturers wish to unlock from Industry 4.0 is a reduction in Total Cost of Ownership (TCO) and an increase in Overall Equipment Effectiveness (OEE). TCO is not just the initial cost of a machine, it accounts for costs over the asset’s entire lifecycle, from installation and deployment to energy consumption and cost to service and upgrade. This immediately raises questions about the suitability of some of today’s accepted packaging norms such as the use of shrink tunnels, which consume energy at eye-watering rates.
Product design: driving innovation beyond the package
All of this is changing the way people think about both packaging and packaging machinery, and this is gradually driving innovation that extends beyond the design of the finished pack and begins with the design of the packaging machinery itself. The creation of a “digital twin” allows extensive simulation and virtual development to take place even before any metal is cut. Consequently, whole new operating platforms have been developed which have low energy consumption, low materials usage, the flexibility to manage a wide variety of packs, super fast changeover times and enhanced production speeds, as standard. This same digital twin then lives in the IOT where it constantly monitors the physical twin to ensure each element is operating as it should. In the event of any issues, preventative maintenance is quickly identified and undertaken, and the problem of costly downtime is eliminated.
To become 4.0 ready, manufacturers need to look at the intrinsic platform that their packaging machinery has been built on and re-evaluate the materials and processes they might have been following for years. Yes, heated shrink wrap tunnels have been the accepted norm for decades, but are they capable of the levels of connectivity and automation that modern manufacturing requires? And will the machinery itself stand up to an investigation of Total Cost of Ownership, or Overall Equipment Effectiveness?
New packaging machinery enables manufacturers to think more flexibly about the materials they use for packaging by enabling them to explore hybrid packaging that consists of corrugate and RPET. Combining the high strength of corrugate with the presentation qualities of RPET results in a pack that is both strong and suitable for delivery as well as being easy to handle and open. Using RPET also gives better product visibility, with consumers wanting to see the quality of the contents rather than its packaging.
Combining materials: enhancing the operational efficiency of delivery systems
Introducing a third element in the form of thin film, cold wrap technology will further enhance the efficiency of the delivery system, with the combination of RPET trays, plain corrugate sleeves and thin film providing the flexibility needed for changing pack sizes to meet different store formats and customisation requirements, without incurring expensive origination and printing costs.
Crucially, combining the two materials and removing the need for shrink tunnels delivers energy and materials savings and more effective packs at a lower cost.
To survive in the current climate, manufacturers must focus on growth and one of the ways they can achieve it is by leveraging Industry 4.0 technologies. Increased investment in technology and automation is the key to improved efficiency and productivity and that extends to both packaging and packaging machinery. At the heart of this is the digital twin. It is conceivable that as soon as a customer buys an item from the supermarket, all the digital twins involved in replenishment, from raw material supply through processing, packing and delivery, will already be planning the replacement of that item. Then, when the time arrives, they will simply instruct their physical twin to re-set and get on with it!
If 4.0 is all about connectivity and efficiencies, manufacturing machinery cannot be allowed to operate in a silo. Today’s packaging machinery needs to be modular, smart and fully connected, capable of improving a manufacturing company’s packaging speed, and able to deliver customised products and effective, scalable production.