What Digital Means for Your Company Now and in the Future ...
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What Digital Means for Your Company Now and in the Future September 26, 2017 Pathways to Digital
Transcript of What Digital Means for Your Company Now and in the Future ...
What Digital Means for Your
Company Now and in the Future
September 26, 2017
Pathways to Digital
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Key Topics:
Business Transformation
Sustainable Competitive Advantage
Business Valuation
Listening, Understanding, Leading
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“We Cannot Let Digital Printing
Simply Evolve Into Just Another
Process for Printing a Box”
Bill House-Retired President, Inland Container
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Is There Room for a Third Category of
Device in the Middle?
iPad
MacBook
iPhone
Question Asked by Steve Jobs at the iPad
Launch-January 27, 2010
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Is There Room for a Third Technology?
Offset
Digital
Flexo
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The Developers Challenge
The Chasm Concept
Digital Printing & Transformation
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80
45
150
290
520
Market Size ($Bn.)
Display Graphics Ceramic Tile
Textile Publication/Transaction
Packaging
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50
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15
1 % Digital
Retailers
Brands
Converters
Suppliers
A Strong Value Proposition
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Achieve superior quality printing
Improve cash flow for WIP inventory
Achieve high quality graphics
Reduce waste and/or obsolescence
Cost-effectively order small runs of pkg and displays
Increase speed to market
Reduce inventory levels
Rapid change with no-set-up
Do online design and proofing
Simplify the design and printing processes
Better integration of marketing messages and packaging
1-step printing of advert/promo messages, address & postage
Increase product production flexibility
Have JIT relationships with suppliers
Print-on-Demand packaging & displays
Targeted products and/or messages to customers
Eliminate plates and films
Precise tracking of SKU’s and shippers
Have instantaneous modifications of packaging printing
Improve bar code scanning & size flexibility
36-hour cycle times for printed packaging
Quick change of printing specifications
Ability print to pkg in-line
Customized products/displays to customers on-demand
Increase consistency and reproducibility of pkg
New value-added offers on packaging
Manage complexity of multiple language pkg
Use of Environmentally-friendly inks
Print packaging in-line to customize to a particular customer
Retailers Brand Owners
Retailers
Brands
Converters
Suppliers
Customers Are Open To Sharing
the Improvements!
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Retailers
Brands
Converters
Suppliers
Digital Industry Response…
Introduces Generation 1
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The Industry Message…Delivers Reality
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Digital Entry Core Business
Product Lifecycle- Used to Define Converter Production Demand-
Not to Scale
Digital Progression
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Retailers
Brands
Converters
Suppliers
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Where is the Industry?
The Chasm Concept
Key Topics:
Business Transformation
Competitive Advantage
Business Valuation
Listening, Understanding, Leading
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Converter Feedback at drupa
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“We have some critical internal decisions to make regarding the technology. We did not see
a “single” solution that addresses all the needs across our business, but rather individual
solutions from a variety of suppliers that when viewed collectively, will address the majority
of our needs. We need to prioritize our needs and identify where we wish to get started”.
“Just because I have the financial position to invest in digital technology does not mean I
should or will. I’m still looking to make investments that provide the greatest return”.
What Changed…Generation II
Single Pass
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What If……..
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New Orders- 2 Day Delivery
Repeat Orders- Same/Next Day Delivery
No Minimum Orders
No Set Up Charges
Unlimited Color Selection- Expense Based on
Coverage
Order Exactly What you Need, When you
Need It, How you Need It.
Retailers
Brands
Converters
Suppliers
Think Digital Printing is Only for
High Graphics- Guess Again
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Attacking Make Ready Expense- Trading
Higher Ink Cost for Improved Efficiency- Digital
Generally Wins
Retailers
Brands
Converters
Suppliers
Converter Input…Pursuing Opportunity
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Digital Positioning
Core Business
Product Lifecycle- Used to Define Converter Production Demand-
Not to Scale
One Example…
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A Label Converter Located in the Southeast
Annual Revenue in 2012- $2.7 Million
Operating 3 Old Flexo Presses
No Competitors Had Adopted Digital Printing-Should They go
Digital?
$1.2 Million Investment
Privately Held- Do We Have the Business to Justify the
Investment
Analysis Conducted
Found 80% of Volume Fell Within the “Sweet Spot” For a Digital
Label Press.
One Example…
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Key Question-If a Competitor Adopts, and Finds Your
Customer, Does Your Customer Switch Suppliers?
Interviewed 20 Customers:
Would Not Switch Immediately- Too much Work for Too Little
Reward- $20,000 Annual Purchases
Would Switch All New Product Requirements, and
Product/Image Changes. 1/3 of Spend is New Products-
Impacted in Year 1, 1/3 of Spend Would Shift in Year 2, 1/3 of
Business Would Shift in Year 3.
What Was the Appeal?
Speed, Flexibility, Convenience… Nothing About Print!
One Example…
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Action Pursued:
Put Together a Plan to Double His Business in 3 Years
Leveraging Digital Printing
Pitched the Plan to the Bank, Bank Approved Funding for Two
Presses.
Purchased the Press
Pre Sold Current Customers on Digital Printing- Managed
Transition
Identified and Solicited Prospect Customers- Secured New
Business Opportunities Aligned With Plan Assumptions
The Results…
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Action Pursued:
Sold One Flexo Press
Purchased the Second Digital Press After 18 Months, Growth
Continues.
Sold Second Flexo Press, Took Possession of New Digital
Press.
Business has Doubled by the End of Year 2.
Took Possession of a Third Digital Press in Year 3. Now
Operates 3 Digital and One Flexo Press.
Revenue at the End of 2017-$7.2 Million
Sustainable Competitive Advantage
The Bowling Pins
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Segment-Consumer Goods # of Firms Top # % of Revenue Controlled
Breakfast Cereal
Dairy Products
Meat Product- Secondary Processing
Poultry Processing
Fruit & Vegetable Processing
Snack Food
Cookie & Cracker
Seasonings & Dressings
Breweries (included microbreweries?
Distilleries
Coffee + Tea Manufacturing
Pharmaceutical
Medical Equipment & Supplies
Personal Care
Soap & Other Detergent
Toys and Games
Pet Food
Household Appliances
Tobacco
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1,100
3,000
300
1,300
500
300
600
1,500
80
300
1,500
11,000
800
650
700
200
300
80
Top 4
Top 50
Top 50
Top 50
Top 50
Top 50
Top 50
Top 50
Top 8
Top 20
Top 50
Top 50
Top 50
Top 50
Top 50
Top 50
Top 50
Top 50
Top 8
80
75
65
90
75
90
75
90
90+
90
90
80
60
85
90
75
99
85
90
AICC Customer Base May Set the Direction!
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Where is the Industry?
The Chasm Concept
Key Topics:
Business Transformation
Competitive Advantage
Business Valuation
Listening, Understanding, Leading
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Options to Engage….
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Invest
Or
Partner
Plenty of Options and Opportunities for Both
Options
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Pre Print- Apply on the Corrugator/Single
Face Laminator (High/Mid Range
Production)
Model Technology
Quality
Target
Speed
(lfpm) Max. Width
Production
Capability
(month- 2
shift)
HP/KBA T1100 Thermal Inkjet High End
Flexo/Offset
600 110 inches Up to 112 million Sq. Ft.
BHS/Inca In Development Piezo Inkjet High End
Flexo/Offset
980 110 inches Up to 70 million Sq. Ft.
HP T400 T400 Thermal Inkjet High End
Flexo/Offset
600 42 inches Up to 43 million Sq. Ft.
Target Customers:
New Plants- alternative investment to Flexo and Offset Equipment
Existing Plants-
• Requiring additional capacity
• High volume pre-print facilities- expanded capabilities
• Multi-Plant operations, internal consumption
• Top Sheet provider to other converters
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Post Print- Sheet Fed, Single Pass
(Mid Range Production)
Model Technology Ink Print Quality
Target
Speed
(lfpm) Max. Width
Production Capability
(month- 2 shift)
Barberan JetMaster 1680 Piezo Inkjet UV High End Flexo/
Near Offset
180 68 inches 20 million Sq. Ft.
Bobst Unknown Continuous
Inkjet
Aqueous High End Flexo/
Near Offset
600 51.5 inches 52 million Sq. Ft.
Durst Rho 130 SPC Piezo Inkjet Aqueous
UV
High End Flexo/
Near Offset
255-393 51.2 inches 28 million Sq. Ft.
EFI Nozomi
C18000
Piezo Inkjet UV High End Flexo/
Near Offset
165-246 72 inches 25 million Sq. Ft
HP C500 Thermal Inkjet Aqueous High End Flexo/
Near Offset
Specifications have not been publicly disclosed
Sun
Automation
CorrStream 66 Piezo Inkjet Aqueous Flexo 228 63 inches 24 million Sq. Ft
Target Customers:
Existing Plants-
• Requiring additional capacity
• POP/Display promotional campaigns
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Post Print- Sheet Fed, Scanning/Single Pass
(Light Production)
Model Technology Ink Print Quality
Target
Speed
(lfpm) Max. Width
Production Capability
(month- 2 shift)
Durst RHO 1000 Piezo Inkjet UV High End Flexo/
Near Offset
96 inches 1.5 million Sq. Ft.*
EFI/Vutek HS 125 PRO Piezo Inkjet UV High End Flexo/
Near Offset
126 1 million Sq. Ft.*
HP/Scitex 17000 Piezo Inkjet UV High End Flexo/
Near Offset
63 inches 2.88 million Sq. Ft.*
Inca/FujiFilm Onset Piezo Inkjet UV 63 inches 2.58 million Sq. Ft.*
Xante/Memjet Excelegraphix
4800
Piezo Inkjet Aqueous Flexo 120 48 inches 1 million Sq. Ft*
Target Customers:
Existing Plants-
• Requiring additional capacity
• POP/Display promotional campaigns
* 2 shifts/day, 80 utilization, 21 days/month (HQ mode)
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Business Valuation
Raw Material Prices-Between a Rock and a Hard Place
Waste Not-Want Not
Capex- Are You Getting Bang for the Buck?
Operational Performance- “What Gets Measured Gets Delivered”
Product and Customer Profitability: “When to Part Company with Your
Customers”
Innovation: “What Distinguishes the Stars From the Dogs”
Ernst & Young- Unwrapping the Packaging Industry- 7 Drivers
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Where is the Industry?
The Chasm Concept
Key Topics:
Business Transformation
Competitive Advantage
Business Valuation
Listening, Understanding, Leading
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Jeff Wettersten
317-710-6744
Kevin Karstedt
716-992-2017
Questions?
Panel Discussion
Richard Brown – The Boxmaker
[email protected] - Phone - (425) 251-5428
John Kelley – Dusobox
[email protected] – Phone - (407) 855-5120
Michael Drummond – Packrite
[email protected] – Phone - (336) 884-0793
George Moretti - Innovative Integrated Solutions, LLC.
[email protected] – Phone - (716) 909-1177
Robert Sweet – Bennet Packaging
[email protected] – Phone - (816) 379-5001
