The printing and packaging industry has long held high hopes for digital converting. In the folding carton space, we’ve been wowed and inspired by new equipment, yet the truth is that digital adoption is not as widespread as one might think. Why is this, and will we hit a critical adoption point?
During a recent PPC webinar, digital experts Kevin Karstedt and Jeff Wettersten of the Karstedt Partners offered valuable insight on these questions, the value proposition of digital printing, and what folding carton converters should do next.
High Hopes & Window Shopping
PPC worked with Karstedt Partners in 2014-2016 on a research project and white paper, Short Run Solutions for Paperboard Packaging. We surveyed folding carton converters about their attitudes toward short-run orders and digital printing. At the time, 92% of the respondents said they were looking at digital solutions, and 29% said they intended to purchase a short run press in the following 18 months.
Yet over the ensuing seven years, it does not appear that many of those investigations yielded investment. In fact, during his last presentation to PPC, Kevin noted that there are fewer than 19 digital presses currently installed and operating in dedicated folding carton plants in North America.
So, what happened?
Reconsidering the Digital Value Proposition
According to Karstedt Partners, carton converters might not be using the best data point to determine the viability of digital investment.
Converters want digital presses to reduce costs and improve profitability, and the first place they look to gauge these metrics is print performance. However, considering data from other industries, Karstedt Partners argues that this focus is too narrow. Converters need to look more holistically at digital intervention—not reducing print cost alone, but considering possible improvements across the entire organization.
For example, in the corrugated and label industries that are farther along in adoption, cost reduction in print was the initial point-of-entry. Yet they later realized that they could harness the digital technology to optimize performance across the organization. One might actually see negatives on print margin but increases overall.
At the end of the day, Karstedt Partners recommends a new metric: can digital technology offer you a five basis-point improvement in productivity system-wide? That’s where the true payoff comes.
What Folding Carton Converters Should Do Now
With a number of new digital presses and second-generation systems coming to the market in 2021, carton converters should reevaluate their position on where and how digital could fit in their businesses. To begin:
- If possible, rework your calculations based on how digital could yield a five basis-point improvement across the whole of your operation.
- Talk to label-makers and corrugated converters. They are ahead of folding carton in overall adoption. Who has adopted and why?
- Have the digital or short-run conversation again with your customers. While you may have gotten pushback from purchasing agents before based on price-per-piece, many brands have changed their perspective. Bring in the marketing folks and don’t necessarily make the conversation print-centric.
To learn more, PPC members can watch the full webinar here. To contact Karstedt Partners, feel free to email kevin@karstedt.com.