By a clear margin, companies in the packaging industry associate optimization of internal processes (98 percent) with digitalization. Among other things, this is followed by increased customer loyalty (75 percent), more flexible production (69 percent), better product quality (57 percent), and a reduction in staff costs (25 percent). Satisfaction with digital applications and measures implemented to date is mixed. These are the results of a recent study conducted by the renowned Allensbach Institute for Demoscopic Research (IfD) on behalf of consulting boutique TTE Strategy.
More than a third (36 percent) of companies surveyed have introduced data-based process optimization (e.g. process mining), 27 percent have introduced automated staff planning, around a quarter (23 percent) use artificial intelligence (AI) in reporting and data analysis. One in five companies (21 percent) has completely automated processes with the aid of robotic process automation (RPA).
“Digital process optimization measures are among those that have most frequently already been implemented alongside production optimization,” says Niklaus Wildberger, Managing Director at TTE Strategy and an expert in automation and process digitalization. “Of course, this is still only true of a minority of companies. And only a small minority plans to implement these measures in the future.”
While the introduction of AI in reporting and RPA is planned by around one fifth (21 and 20 percent respectively) of the companies surveyed, this is only the case for 11 percent when it comes to process mining and automated staff planning. Niklaus Wildberger says: “Even if you include implemented measures and planning – this study suggests that only just under half of companies in the packaging industry capitalize on digitalization. For the other half, this will lead to a significant competitive disadvantage.”
Where companies are satisfied – and where there are shortcomings
Those companies who have taken the first steps to digitalization are largely satisfied. All companies who have already automated recurring tasks are satisfied with the results achieved, including 41 percent who are “very satisfied.” Ninety-five percent are at least satisfied with AI tools implemented in reporting, with 26 percent “very satisfied”; 82 percent are satisfied with their automated staff planning (23 percent “very satisfied”).
Satisfaction with data-based process optimization measures (process mining) is somewhat lower: here, 28 percent of companies who have already implemented this are “very satisfied” and a further 48 percent are “satisfied.” A quarter (24 percent) of those surveyed, however, indicate they are “less satisfied” with the measures introduced.
Possible reasons: according to 68 percent of companies surveyed, project timetables were not respected, and 37 percent misjudged costs. “We frequently see two additional factors as to why there is insufficient satisfaction with the results of digitalization projects,” says Niklaus Wildberger. “First, the company is unable to really get employees on board. Second, projects are tackled without an overarching strategy – and are therefore not coordinated with one another. This results in efficiency losses. And this for measures that are intended to produce the opposite effect.”
There is evidence for both of these theories in the recent Allensbach survey. Only 34 percent act based on an all-encompassing digitalization strategy. More than half (53 percent) tend to focus on “individual measures.” The biggest challenge was stated to be “getting employees to support the changes.” Seventy-five percent of companies surveyed responded in this way.
Until now, courage has predominantly been rewarded – half of companies are in danger of losing touch with competition
“Neither point is trivial,” says Niklaus Wildberger. “A digitalization strategy has to be closely coordinated with the overall business strategy. This is something leadership teams still find difficult – especially if individual initiatives were not initiated directly by the board or management.” According to information from the companies, this is still the case in just under a third of all initiatives. “And securing real commitment from employees is tough work. It is not enough just to implement new measures and mandate processes. You have to persuade individuals of the sense and individual benefit so that they don’t block possible effects with inappropriate behavior.”
Niklaus Wildberger says: “Overall, it should be noted that those who have dabbled in digitalization have often achieved good to very good results from their own viewpoint. Their investment courage has paid off. They will also have identified errors and will seek to avoid them in the implementation of further digital measures. Half of companies had not yet even started individual measures and did not specify any concrete planning steps. Based on the experiences of this survey, I can only encourage those concerned not to wait any longer. The world is turning faster and faster. The packaging industry is a latecomer. Those who don’t gain initial experience now will struggle to make up for this lack of expertise later on.
About the study: TTE Packaging Barometer “Digital 2022”
On behalf of TTE Strategy, the Allensbach Institute for Demoscopic Research (IfD) surveyed senior executives from 81 companies in the packaging industry about digitalization at their company. The companies are based in Germany (60), Austria (9), and Switzerland (12). A quarter of the companies have an annual turnover of over 100 million euros and 10% a turnover of over 500 million euros.
One factor that distinguished this survey from many other sectoral studies based on self-reporting was the focus on specific statements about how measures were actually implemented at the respondents’ companies.
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