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Commentary & Analysis

The Value Proposition for Digital Package Printing; Part Two – The Two-Track Approach

In Part One of The Value Proposition for Digital Package Printing, we discussed the operations (material and operations planning) and marketing benefits relating to digital printing. Recognizing the reality of this operations and marketing dual purpose for digital, we break the compelling reasons for digital printing in packaging into two tracks.

By Kevin Karstedt
Published: March 25, 2014

In Part One of The Value Proposition for Digital Package Printing, we discussed the operations (material and operations planning) and marketing benefits relating to digital printing. Recognizing the reality of this operations and marketing dual purpose for digital, we break the compelling reasons for digital printing in packaging into two tracks.

  • Track 1– Utilizes digital printing capabilities where it can eliminate cost and relieve operational issues.
  • Track 2 – Utilizes digital printing capabilities where it can provide marketing advantages.

The adoption rates and growth for Track 1 implementations can be slow and incremental. Investment decisions by suppliers will be based on opportunity, or “is this the right time” for investment. Adoption rates and growth for Track 2 can be exponential, and will be based on competitive factors, primarily the ability or inability to participate in certain segments of the business.

Digital Printing as a Printing Process

Digital printing is typically viewed as a printing process, and while the statement is true, it conveys only a part of the true potential. Karstedt Partners views digital printing as an end-to-end solution. We define this as the “whole-product” solution. It is important for the reader to understand that whole-product solutions do not materialize overnight, and are rarely offered upon market entry. We certainly feel this will be the case for digital printing in packaging. Digital presses will initially enter the market as a cost-effective alternative for managing a certain segment of the order mix currently handled by analog technology. Over time, and through continuous improvement initiatives, the touch points for this new technology will expand from print management to other areas in print process management. We feel this is where the true value of digital printing will be realized.

Is the market size opportunity sufficient to manage the risk for all involved?

The packaging market is very large, as are the potential opportunities within it. Looking at the opportunity through the dual-track lens we see the following benefits:

Track 1 ? Provides an opportunity for participation that is manageable, as well as scalable. Growth is incremental, allowing for greater control and management of potential risk.

Track 2 ? Offers the potential for a big payoff if and when the market matures. At this point in the development process, the entire supply chain needs to engage. The risk of being late is too large to ignore, and it is difficult to play “catch-up”. Managing change is difficult; managing core business change under competitive pressure is almost impossible. The continued emergence of digital printing in packaging is eminent and with development windows of three-to-five years, it is important to have a digital strategy whether it is offensive or defensive. 

What direction is the market moving? Are the trends for digital printing favorable or unfavorable?

  • Touch the consumer
  • Build it better
  • Build it faster
  • Build it cheaper
  • Build it more sustainable

In many instances, digital printing is the preferred option in achieving these goals. Assessing how digital printing will affect your business is a challenge requiring cross-functional input and evaluation. Consumer behavior is changing, forcing a changed response from the packaging supply chain. Traditional metrics and processes for evaluating and responding to these changes may not be sufficient. There is tremendous opportunity in being prepared with a response, and great risk in being late with your response. 

This is an edited excerpt from Karstedt Partners report titled: Is Digital Printing Part of Your Brand or Operational Strategy? The report was coproduced with Mike Ferrari of Ferrari Innovation Solutions and former Procter & Gamble executive. Click here for more information on the report.

Karstedt Partners, LLC offers a variety of consulting services to participants all through the packaging and consumer product supply chain. Their clients include Brand Owners, Packaging Converters who are looking at process improvements in their packaging operations and OEMs and Service Providers who are looking to develop products and services for Brand Owners and Packaging Converters. For more in-depth analysis and research visit http://www.karstedt.com or contact Kevin Karstedt at kevin@karstedt.com or Jeff Wettersten at jeff@karstedt.com.

 

 

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Label & Packaging Editor

Jennifer Matt

Patrick Henry, Section Editor
Pat has covered graphic communications for nearly 30 years as a reporter, an editor, and a commentator.

 

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