Digital transformation is top of mind for many business leaders across all industry segments. But what is it exactly, how is it applicable to the packaging supply chain, and why should you even care?
Establishing operational excellence
‘Digital Transformation’ is defined as the use of digital technologies to solve challenges in the daily operation of an organization, that would previously have been tackled manually. The idea of digitizing business is also known as ‘Industry 4.0’, a term originating from a German government strategy initiative to computerize manufacturing.
Some of the more sophisticated technologies that organizations look to deploy are Cloud Computing, Artificial Intelligence, the Internet of Things, Big Data, Data Analytics, and Robotics, to name a few.
Digital transformation is a gradual process in which an organization evolves in digital sophistication. The more digitally transformed an organization is, the more it questions the efficiency of its existing business processes across all business functions including sales, order intake, and production. As such, digital transformation fundamentally impacts how an organization operates overall.
A way of life
Lots of companies implement cutting-edge technology. That does not necessarily mean, however, that the ‘digital transformation’ description applies. True digital transformation requires an organization to be agile and willing to explore new technology.
Organizations that have proven successful in digital transformation live by an ethos of implementing digital technology to deliver an advantage, rather than perceiving it as a threat. Those organizations also embrace failure as a valuable learning point and compare their performance against their peers.
The more business leaders adopt digital technologies to define processes, stakeholders, roles and timelines in their operations, and the more they connect and automate those technologies, the more they cultivate digital transformation as a core business necessity.
Adapting to a new digital reality
For a business to stay relevant in a saturated market with the growing impact of digital media, it is essential to find new ways to engage in a more personalized way with customers and redefine how to create value.
Driving continuous improvement in an organization’s operating model, through innovation and harnessing data insights to develop further operational efficiencies, are just a few of the promises of digital transformation.
Regrettably it’s usually a series of unfortunate events that disrupts doing business the way it had always been done before: loss of volume from a major customer due to missed deadlines or poor print quality performance; not being capable to produce that rush label job with five variants; throwing away expensive polymer plate material due to an error that remained hidden during prepress; being forced to take back misprints, leaving the printer with non-billable costs that compromise the profit margin…
At some point packaging and label converters recognize that their existing processes or infrastructure no longer suffice, or even become barriers, to reach their business goals. For them to keep pace with fast changing market requirements, they acknowledge the need for automation and collaboration tools that help them streamline the process by which packaging is made.
It is the tipping point at which packaging suppliers slowly move their operation into digitization. By introducing integrated, automated and cloud-connected systems, digital transformation removes bottlenecks and improves efficiency across every facet of their business. Ultimately this results in tangible bottom-line success and clear competitive differentiation over the long term.
Start to digitize
Digital transformation is a continuous maturation process that should focus on the realities of the bottleneck it intends to alleviate. Will the focus be on a section of the daily operational workflow, on specific areas of production, or on the whole enterprise? How do organizations decide what to digitize first and what later? And how do they measure if the outcome indeed delivers on the intended transformative impact on the business?
In order to make educated decisions on what could be the winning strategy to move forward on the digital transformation journey, it is imperative that an operation first clearly identifies its current stage of digital maturity.
Knowing what stage a packaging or label business finds itself at, brings insights to help develop a roadmap to move further into digitization, whether that be managing business risk, modernizing the business, disrupting the status quo to drive the company forward, or truly differentiating the business to create competitive advantage.
Digital Maturity Model for Packaging Suppliers
Expertise in packaging artwork and prepress workflow management, combined with the collective knowledge of thousands of packaging and print customers, has enabled Esko to develop a ‘Digital Maturity Model’ specifically tailored to the business environment of print and packaging suppliers.
The Digital Maturity Model for Packaging Suppliers outlines the characteristics of five different stages of digital maturity that a packaging or label business passes through on their digital transformation journey.
By means of a dedicated assessment tool, Esko aims to help packaging and label converters understand where they currently are in the digital transformation of their operation. The Digital Maturity Model for Packaging Suppliers provides clarity and guidance on the next step of the digital transformation journey.
Overstreet, K. (2019) ‘Digital Transformation Key Focus of Digital Print for Packaging’ [online]. Available from: https://www.packworld.com/home/article/21094687/digital-transformation-key-focus-of-digital-print-for-packaging-europe-conference
Antora-Fani Dima (2018) ‘The (digital) transformation of the Printing Industry’ [online]. Available from: https://blog.objectiflune.com/the-digital-transformation-of-the-printing-industry/
Scholze, J. (2018) ‘Digital Transformation And Five New Imperatives For The Paper And Packaging Industry’ [online]. Available from: https://www.digitalistmag.com/digital-economy/2018/03/20/digital-transformation-5-new-imperatives-for-paper-packaging-industry-05979018
Kane, G.C. (2017) ‘Digital Maturity, Not Digital Transformation’ [online]. Available from: https://sloanreview.mit.edu/article/digital-maturity-not-digital-transformation/