The Digitization and Simplification of the Value Chain
We are at an intersection of the digital and physical world and coordination at this intersection becomes increasingly difficult. With the development of digitization in every aspect of society, customers have grown accustomed to the Amazons and Apples of the world: seeking instant gratification with personalized marketing, same-day delivery and global product consistency.
So how do businesses prepare to meet these rapidly growing consumer demands? Accelerating the digitization of their business is a crucial key to success. You see, digitization is not just about the consumer – companies benefit too. When digitization is implemented effectively within a business, brands can offer competitive prices due to lower costs and better operational processes.
As stated in McKinsey’s “The Case for Digital Reinvention”, industries are less than 40 percent digitized, despite the relatively deep penetration of technologies in media, retail and high tech.
But digital’s rise impacts all aspects of consumer goods. Think about it – products still come in packages laden with data that directly impact the customer experience.
Packaging plays a key role in marketing to consumers, therefore companies must win more and lose less by using a combination of technologies that let them simplify and digitize the value chain, getting their high-quality products to market quickly and with accuracy.
Unfortunately, brands often don’t realize how much time is required for effective packaging; it can take up to nine months to create a SKU and six months to create overall packaging design. This doesn’t account for the many reiterations and constant back and forth communication (referred to as the “messy middle” by some of my colleagues) throughout the entire process. But with digital disruptors in the printing marketplace, such as tools to shorten the process and lead time and a greater variety of printing technologies, more options are available to rectify these problems.
With design and asset management software and additional printing tools, transparency can be seen across the functional silos, providing the ability to communicate effectively, manage expectations and deliver superior consumer experience, while additionally allowing departments to think about packaging’s impact much earlier in the value chain. Transferring processes to digital software also permit brands to mine data to better understand processes, cost drivers and root causes of risk.
Better yet, the monetary benefits of digitization are big. According to another article by McKinsey, costs can be cut by up to 90 percent.
Senior leadership at Danaher’s operating companies, PANTONE, X-Rite, Esko, AVT, Videojet and Laetus, all a part of our product identification platform, discuss what they believe is driving trends in packaging for 2018 in our latest trends book. We hope to provide greater context as to how these trends impact your business and how you can utilize digital technologies to your advantage. To download, click here.