Industry Experts Marco Boer, Kevin Karstedt on Digital Packaging Deployment

As converters and brand owners continue to gain an understanding and appreciation for the benefits of digital printing in packaging, there are still important aspects to consider to achieve full buy-in from the supply chain before deploying a new press.

To ensure a new digital asset is selected and rolled out properly, a converter needs to have a deep understanding of his or her own needs, and the needs of their brand owner customers. Plus, as the implementation of a new technology disrupts a package printing company’s internal flow, it can be difficult to get operations, marketing and sales staffs all on board with the change.

The Digital Motivation

It’s a rarity that a business will make a major investment in a new technology just because it seems interesting. Almost always there are multiple motivating factors that lead to the desire to add a digital press. According to Kevin Karstedt, CEO of industry analyst and consulting firm Karstedt Partners, understanding where that motivation is coming from is the first step in successfully deploying digital.

Among the most prevalent motivations, Karstedt says, is that a converter wants to become more efficient and relieve his or her conventional presses of cumbersome short-run work. As short runs increase, he says that converters experience bottlenecks on conventional presses more suited toward longer runs. In this case, the motivation is internal and deployment could allow for significant growth opportunity.

In the past, carton producers have sought to remedy this short run problem by investing in one of the new generation analog presses that have been designed for fast changeovers and efficient short run production. With the introduction of digital printing systems that are geared specifically for production-level package printing, converters now have digital and analog solutions to evaluate.

“With these new digital assets, a converter can go after new business they may have shied away from because they didn’t have the capacity for it,” Karstedt says. “By moving troublesome and short-run jobs off the analog assets to digital ones — a concept we call ‘operational relief’ — converters have increased the capacity on the analog presses and can use them for what they are good at, which is cranking work out and making money. The operational relief component will then bring sales and expansion opportunities.”

There may also be motivations that come from an external source, he says. For example, if a customer approaches a package printer with a request for a job that makes the most sense to run digitally, it can push a converter to add digital so that customer does not seek a solution elsewhere.

For example, he says that beverage brands are in constant competition to create a personalized experience for the consumer. Regionalized packaging that features local sports team logos is one example of how these brands increasingly need shorter run work that is well-suited for digital production.

Similarly, if a company sells its products into multiple countries that require different languages printed on the packaging or different regulatory information, a digital press can provide the needed quick-change capabilities to reduce changeover times between each version.

“You need to identify what your customers’ needs are and what your needs are and start aligning to the technology capabilities that are out there,” Karstedt says. “You start analyzing the needs that you have today and in the future to best match it with the technology that fits your needs.”

Dealing with Disruption

Despite the benefits digital printing can offer to a converter and brand owner, introducing a disruptive technology into an established workflow can result in some internal resistance. Marco Boer, VP of I.T. Strategies, explains that one of the first issues that comes up is that digital press metrics cannot be accurately compared to conventional, due to the nature of the technology.

“The problem you get into when you deploy digital is that none of [the conventional printing] metrics are comparable,” Boer says. “The job runs tend to be smaller on digital compared to conventional print, but the setup cost and manual labor is also significantly lower than conventional print for these smaller, high-frequency runs. The ability to vary things and do ultra micro-runs wouldn’t compute against what the traditional workflow would look like.”

Additionally, Boer explains that operational and marketing staff members often don’t see eye-to-eye when it comes to adding potentially disruptive technology. For example, he says that if marketing decides adding digital can be helpful and drive up sales, operations may not be so keen on the addition because their work is so dependent on all production processes running on consistent, high job volumes.

On the opposite end of the spectrum, Boer explains it’s highly unlikely that an operations manager would approach marketing and pitch the concept of adding digital, primarily because marketing may not be willing to make such a substantial investment.

The best bet, he says, is to have a senior manager — typically the CEO — be the one who drives the implementation of digital and becomes the champion of the changes being made.

“Things work really well when there’s one core decision maker who controls all of those aspects,” he says.

Bringing Brands on Board

The demand for digital printing ultimately needs to be brand owner driven. There are efficiency and cost savings to be gained from deploying digital print at a converter, but to create new and additional value, brand owners need to be on board in understanding how to benefit from the advantages of digital print.

From left, Diane Barton, associate director of graphics for Perrigo Co. and Kevin Karstedt, CEO of Karstedt Partners, discuss the importance of digital package printing for brand owners during the 2015 Digital Packaging Summit.

Boer explains that the way technology tends to grow is by having one brand adopt it and forcing their competitors’ hands.

“That’s how these things typically start rolling out,” he says. “It becomes known that one of their peers is doing something different and interesting and it reaches a stage where they have no choice but to follow.”

Boer says one of the issues that has arisen since the launch of digital printing in the packaging space however, is that the industry has not paid enough attention to brand owner education. Having suppliers and converters on the same page with digital’s capabilities is a start, but until brand owners are brought onto the same page, deployment remains a challenge.

“I think the issue we face as an industry is that we know on the digital printing equipment and supplies side, what the technology can do,” Boer says. “But as an industry, we have not done a good job of marketing to the brand owners of what is now really available.”

Typically, Boer explains that as a starting point, digital printing is easier to deploy for new products and products that require regionalization, primarily because those are the items that make the most sense to run digitally, reducing the disruption effect.

“It’s not about, ‘Does this printing technology work or not work?’” he says. “The bigger question is: Where do I deploy it successfully at all of these stages in the ecosystem to get people on board? It tends to be for brand new products that were never offered before or the very short run lengths that require some regionalization.”

Understanding Your Technological Positioning

As new technology works its way into an industry, companies can generally be grouped into multiple categories. There are early technology adopters, eager to hop on board with the latest equipment, and those who are content on waiting for the technology to be proven on the market before considering a purchase.

For example, early adopters need to be a bit more diligent in the testing and analyzing stage of the purchase. These converters need to be certain that the products they plan to move to a new digital press will meet customer needs. When a product is brand new to the market, there’s typically not a blueprint to be followed to guarantee the technology will be a match.

“You have to make sure the product fits the requirements of the end user,” Karstedt says. “And you have to make sure marketing is happy with it — it looks the same and there’s no differentiation. All of those things have to be aligned. Generally, you do that in an early adoption mode.”

On the other end of the spectrum, Karstedt explains that when a converter is late to the game and several of their competitors have already gone to market with a digital asset, suppliers can more easily coach converters through the process. While deployment may be easier in this instance, the drawback is that these late-stage adopters have lagged behind their competition.

Additionally, Karstedt explains that converters need to decide whether their key to success is to produce a high-volume of packaging at a low cost, or if they want to specialize in lower volumes of packaging with a higher perceived value at a higher cost. He says that converters who try to straddle that line often get left behind, and understanding where you fit into the market can be critical in recognizing how to deploy digital printing.

“Generally, you can’t be a generalist and survive long term,” he says. “You need to focus in a particular type of area. You really need to understand where you are, what you do well and what you want to fix before you decide if you’re in the market or not.”