Top positions in digitalization are the exception rather than the rule among medium-sized companies in the packaging industry. Often, they voluntarily do without it, although digitalization and innovation are decisive drivers for success and growth. It is precisely the combination that brings success – not only for the present, but also for the future. We will show you why this is so, which path leads to success, and what best practices already exist.
The top 15 ranking of digital pioneers in the German SME sector also includes two packaging machine manufacturers, Theegarten-Pactec and Uhlmann Packsysteme. Unfortunately, such top positions on the subject of digitalization are the exception rather than the rule in the packaging industry.
Voluntary waiver of success
This is not only regrettable, but fatal. After all, digitalization and innovation are proven drivers of technological progress and growth. So why are so many companies doing without?
Studies such as those conducted by KfW Research show that the behavior of companies is often conditioned by the market environment. If it is stable, there is little competition and there is low price responsiveness, then there is often no pressure to carry out innovation and/or digitalization activities.
Successful siblings: digitalization and innovation
Digitalization and innovation: It is worthwhile for companies to consistently pursue both activities. After all, both have a strong influence on the success of companies. This is also shown in a study by KfW Research.
To better classify the results, it is worth briefly summarizing the meaning of the two terms: According to the OECD’s definition, innovations are products and/or processes that differ significantly from previous ones. According to the OECD definition, digitalization means the application or expansion of the use of digital technologies.
The KfW study provides concrete results and arguments for linking innovation and digitization in corporate activities.
The three central statements:
- Companies with innovation AND digitalization activities are by far the most successful. Compared to companies without innovation and digitalization activities,
- the return on sales is 15.2 percent higher,
- sales growth is 7.1 percent higher and
- productivity is 15.2 percent higher.
- Companies with pure innovation activities are less successful in comparison.
- The return on sales is 11 percent lower.
- Sales growth is 5.2 percent lower.
- Productivity is 4 percent lower at 11.2 percent.
- Companies with pure digitalization activities are even less successful. Compared to companies that innovate and digitalize,
- the return on sales is 8.6 percent lower,
- revenue growth is 3.5 percent lower and
- productivity is 6.3 percent weaker at 8.9 percent.
The situation in the packaging industry
The packaging industry has traditionally been dominated by product innovations. Currently, the majority of these innovations are in the area of sustainability.
When it comes to digitization, the industry clearly has some catching up to do. Current activities focus mainly on process optimization. However, they rarely move on to the level of products or business models.
That is regrettable. After all, our experience is in line with the results of the KfW study mentioned above and shows that it is precisely companies that strive for a combination of digitalization and product innovation that can generate the greatest added value. Accordingly, not taking the combined approach means that a large part of the packaging industry is missing out on great opportunities. In the process, you could create value, position yourself as a pioneer and make yourself fit for the future.
But there are also pioneers in the packaging industry. Two companies that are already pursuing this winning combination are Marbach and Labelprint24.
- Marbach connectM: connectM is a digital die cutting tool developed by the Marbach company. By using cameras, sensors and QR codes, the smart tool, the die cutting machine and the user can be connected. This enables performance tracking as well as efficient tool management. connectM is a product innovation that has only become possible with the help of digital technologies.
- digiBOX from Labelprint24: The digiBOX as the “fastest folding box in the world” is an individually printed box that is produced completely digitally and automatically through the use of laser die cutting. digiBOX is also a product innovation that was only made possible with the help of digital technologies. It is also offered via a digital sales channel with a corresponding, digital process.
Being sustainably successful means achieving high growth, high productivity and a high return on sales. To achieve this goal, companies in the packaging industry should look at digitalization and innovation, ideally in combination.
The combined path is not only an important component for current success. At the same time, it provides the best conditions for remaining successful in the future and for being able to act and react flexibly as a company in the face of future challenges.