CPGs, Contract Packagers and OEMs Agree on Top 3 Challenges for 2019

More than 140 packaging and processing professionals from operations and engineering, including consumer packaged goods companies (CPGs), contract packagers and OEMs, met in Chicago last fall during PACK EXPO International to discuss how to partner to meet the disruption in the market. The challenge is maintaining 80 percent of your business sold and distributed through traditional retail channels, while creating a separate process and logistics model to cater to e-commerce profitably.

Mass customization is a marketing and manufacturing technique that combines the flexibility and personalization of custom-made products with the low unit costs associated with mass production. While many companies are responding with Band-Aid fixes to get e-commerce packages out the door, process disruptions and a high rate of returns are compromising profitability.

The report's findings include three major areas of concern:

1. Finding automated solutions to mass customization, especially e-commerce, is the greatest challenge they face. Interestingly, focusing on enhanced strategic collaboration and partnerships among CPGs, OEMs and contract packagers is the best solution, in their view.

2. When it comes to equipment, smaller runs necessitating faster changeovers is their greatest challenge. Legacy equipment often inhibits changeover efficiency, as does a scarcity of skilled workers. So it’s no surprise that Vision 2025 participants cite automating changeovers as the solution getting the most attention.

3. Perhaps most perplexing for Vision 2025 participants is that when it comes to automation, they cite the availability of a skilled workforce as their greatest challenge. The real paradox here is that a lack of a skilled workforce is forcing many CPGs to automate, but that same automation exacerbates the labor problem as it takes an even higher skill set to reap the actual benefits of automation systems.

Download the entire 20-page free report.