In the FMCG industry, paper and packaging companies are among the most important suppliers. Despite their supremacy, they have a lot of catching up to do when it comes to digitalization.
A survey by TTE Strategy and the Institut für Demoskopie Allensbach showed that two out of three packaging manufacturers do not yet have a strategy for digitalization topics – 41 percent even concede that they are “lagging behind.” The main reasons for this can be quickly identified: a lack of internal expertise and an acute shortage of specialist staff mean they are dependent on external service providers – only around 15 percent of companies surveyed are currently tackling digital issues without external support.
The digitalization initiatives implemented by many packaging companies are generally uncoordinated and isolated, and this has a direct impact on the FMCG industry: delayed information flows, slow order processing, and limited transparency regarding stock levels and ESG criteria lead to increased transaction costs with low levels of operational flexibility for manufacturers of consumer goods. Furthermore, core digitalization challenges – such as supply chain transparency or monitoring sustainability factors and energy intensity in production processes – cannot be conclusively addressed.
But looking more closely, it is easy to see that manufacturers and retailers of consumer goods must deal with similar internal challenges as their packaging suppliers. Despite related challenges, most companies march ahead alone. In the highly competitive packaging and FMCG market, this reflex to take the initiative is easy to understand, but developments in other industries show that players successfully tackle the challenges of digitalization there together. The packaging industry should align itself to this development and, alongside clients and supply chain companies, look to include financiers and technology partners in their ecosystem. To establish this kind of resilient ecosystem, participants need to view each other as equal partners and work together to find a digital solution. In cross-sector partnerships, the potential surrounding digitalization can therefore be enhanced through combined strength.
The full article by Lars Linnekogel and Carsten Voss appeared on September 23, 2022, in the print edition of Lebensmittelzeitung.
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