The current state of the packaging industry in 2022, and the daunting challenges it faces

The current state of the packaging industry in 2022, and the daunting challenges it faces

For packaging companies, process technology, automation equipment and workflow tools are critical to increasing their productivity, reducing waste and reducing the need for skilled labor. While these trends predate the COVID-19 pandemic, the COVID-19 pandemic has further highlighted the importance of these aspects.

supply chain

Packaging companies have been greatly affected by supply chains and prices, especially when it comes to raw material supply. In essence, the raw material supply chain is very global, and companies in different countries and regions around the world basically need raw materials for production and processing. Companies around the world are dealing with labor and material supply issues brought on by the pandemic in different ways. As a packaging company, one of the ways to deal with this crisis is to fully cooperate with distributors and do a good job of forecasting material demand.

Many raw material factories have reduced production capacity, resulting in a shortage of raw material supplies in the market, making their prices rise. In addition, freight costs have generally increased, and this situation will not end in the short term, coupled with delayed demand, logistics and rigid production processes, all have a huge negative impact on the supply of raw materials, perhaps the problem will change over time The passage of time will gradually get problems, but in the short term, this is a headache for packaging companies, so packers should stock up as soon as possible.

Supply chain disruptions caused by the COVID-19 pandemic in 2020 continued into 2021. The global epidemic continues to affect manufacturing, consumption and logistics, coupled with rising raw material costs and freight shortages, companies in many industries around the world are facing enormous pressure. Although this situation will continue until 2022, some measures can be taken to Mitigate the impact. For example, plan ahead as much as possible and communicate requirements with raw material suppliers as early as possible. Flexibility in the size and variety of raw material inventories is also very useful if the selected product is not available.

It goes without saying that we are in the midst of a global market change that will have repercussions for a long time to come. The immediate shortage and price uncertainty will continue for at least a year. Businesses that are flexible enough to work with the right suppliers through difficult times will emerge stronger. As the raw material supply chain continues to influence product prices and availability, it forces packers to utilize a variety of raw material types to meet customer production deadlines.

In addition, many packaging companies will conduct comprehensive research and judgment in different ways according to their scale and the market they serve. Although some companies purchase more raw materials and maintain inventory, other companies optimize the use of raw materials. The cost required by the customer to produce the order. Many packaging companies have no control over the supply chain and pricing, and the real way forward is in creative solutions to increase efficiency.

From a management perspective, it is also important for packaging companies to carefully evaluate the workflow and understand the time that can be optimized from the time the job enters the production plant to the final delivery. By reducing errors and manual processes, some packaging companies have even reduced costs by six figures. This is a continual cost reduction, while also opening the door to more throughput and business growth opportunities.

labor shortage

Another challenge facing packaging suppliers is the lack of skilled workers. At present, European and American countries are facing a large-scale resignation phenomenon, and many mid-career workers leave their original units to look for other development opportunities. Retaining these employees is important because they have the experience and knowledge needed to mentor and train new employees. It is good practice for packaging suppliers to provide incentives by ensuring that employees stay with the company.

It is clear that attracting and retaining skilled workers has become one of the biggest challenges facing the packaging industry. In fact, even before the pandemic, the packaging industry was already undergoing a generational shift, struggling to find replacements for retired skilled workers. Many young people don't want to spend a five-year apprenticeship learning how to operate a normal machine, instead young people prefer to use automated machines with which they are more familiar. Also, training will be easier and shorter. In the current crisis, this trend will only accelerate.

Some packaging companies retained their employees during the epidemic prevention and control period, while others were forced to lay off staff. Once production started to fully resume and packaging companies started to re-hire staff, they would find that there was a huge shortage of workers, and they still are. This has prompted companies to continually find ways to get work done with fewer people, including evaluating processes to figure out how to eliminate non-value-added jobs, and investing in systems that help with automation. Automation solutions have a shorter learning curve, making it easier to train and onboard new operators, and businesses need to continue to bring new levels of automation and user interfaces that allow operators of all skills to improve their productivity and quality.

Overall, automated machines provide an attractive environment for a young workforce. Traditional machine systems are similar in that computer-controlled systems with integrated artificial intelligence (AI) run automated machines, enabling inexperienced operators to achieve excellent results. Interestingly, using these new systems requires a new management model that inculcates methods and processes that leverage automation.

Automation solutions can be combined with production lines, adding variable data to fixed products in one process, and then producing individual products on separate equipment units. Network management and other automation technologies address worker shortages by increasing efficiency. However, it is one thing to discuss automation in the context of cost reduction. It becomes a problem for the market when there are hardly any workers available to receive and fulfill orders.

A growing number of companies are also focusing on software automation and appliances to support workflows that require less human interaction, which is driving investment in new and upgraded hardware, software and free workflows, and will help businesses run more efficiently. Fewer staff to meet customer needs. The packaging industry is experiencing labor shortages, along with the push for agile supply chains, the rise of e-commerce, and growth to unprecedented levels in the near term, which will undoubtedly be a long-term trend.

future trends

Expect more of the same in the coming time. Packaging companies should continue to monitor industry trends, supply chains, and invest in automation where possible. Leading suppliers to the packaging industry are also paying attention to their customers' needs and continue to innovate to help support them. The innovation also goes beyond product solutions to include advances in business tools to help optimize production, as well as advances in forecasting and remote service technology to help them maximize uptime.

External problems may still be unpredictable, so the only solution for packaging companies is to optimize their internal processes. They will seek new sales channels and continue to improve customer service. Recent surveys indicate that more than 50% of packagers will invest in software in the coming months. The pandemic has taught packaging companies to invest in leading products such as equipment, materials, processes, software that are technically sound, reliable, and allow for multiple output applications, as market changes can quickly dictate volumes. "

The drive for automation, shorter orders, less waste and full process control will dominate all packaging areas. It follows Industry 4.0 or the Fourth Industrial Revolution, combining the power of computers, digital data, artificial intelligence and electronic communications with the entire manufacturing industry. Incentives such as a reduced workforce, competitive technology, rising costs, shorter turnaround times, and the need for added value will not return.

Safety and brand protection are an ongoing concern. Demand for anti-counterfeiting and other brand protection solutions is on the rise.

Sales by major equipment suppliers continue to increase in 2022, and as a member of the packaging industry, we are striving to make every process as efficient as possible, while striving to enable those in the production chain to make decisions, manage and satisfy the business. Development and customer experience requirements. Covid-19 presents real challenges for the packaging industry. Tools such as e-commerce and automation have helped ease the burden on some, but issues such as supply chain shortages and access to skilled labor will remain for the foreseeable future. However, the packaging industry as a whole has remained very resilient in the face of these challenges and has actually grown. Clearly, the best times are yet to come.