Consumers demands are multi-faceted. They want products that are safe, healthy, clean, fresh, organic, easy to use, sustainable and available through a variety of channels including Amazon, Costco, Kroger, Walmart, etc.
And each channel wants products produced, packaged and distributed for them, in a customized format. The sheer variety of SKUs, case counts, pack sizes, point of purchase display options, are stressing planning and production. E-commerce variations have already affected secondary packaging, and it looks like primary packaging will be expected to change as well for home delivery of items ordered off the internet.
In addition, some CPGs are watching government regulations and anticipate pharma serialization will eventually come to food and beverage.
The degree of change and the breakneck pace in which it is occurring, is overwhelming many operations. Builders of processing and packaging machinery are being called on to get involved in projects earlier, sacrifice some line speed for flexibility, and foster an enhanced partner relationship to help the CPGs navigate these rough waters.
CPGs are increasing the level of sophistication with which they operate and procure machinery using TCO (Total Cost of Ownership) to weigh pros and cons of a capital equipment expenditure. Operations is focusing more on OEE (Overall Equipment Effectiveness) to identify bottlenecks.
Source: PMMI Business Intelligence, Top to Top Summit 2017 Report. The entire Top To Top report is available from PMMI here.
PMMI’s OpX Network has produced tools you can use to calculate TCO and OEE, and are available here free of charge.