1. What’s keeping us up at night (along with everyone else in the industry):
Price increases. You can’t have a conversation with a converter, industry supplier or label buyer these days without the topic of shortages and supply chain disruptions coming up. And what do these shortages and disruptions mean to the printed packaging value chain? Price increases. We’re all feeling them regardless of what products we manufacture or source and regardless of what types of applications we run through our presses.
The multinational printing and supplier behemoths among us have long kept a watchful eye on the Producer Price Indices (PPI) that gauge average pricing for raw materials over time associated with our industry whether it’s papers, films, resins, adhesives or even the steel that goes into the printing presses on our production floors.
The valleys and peaks of these indices have a tremendous impact on our industry and over the past 18 months the sharp climbs of these indices have been particularly painful.
As an example, if we look at the PPI for Plastics Material and Resins Manufacturing, from February 2020 to July 2021 average pricing for these raw materials increased 37.9%.
Our industry is a global one. With high volumes of the raw materials that go into printed packaging sourced from different regions, the pandemic has forced companies to drastically rethink their supply chains. In 2020, moving a container from Asia to ports on the eastern U.S. seaboard typically would have cost $1,000-$2,000. Today, moving that same container along the same route costs close to $20,000.
Will this lead to more onshoring or near-shoring in our industry? We’ve seen some movement in this direction and it will be interesting to watch what happens in the foreseeable future
2. What we’re hearing (in every conversation we’ve been having):
Supply chain disruptions. How’s a company in our industry supposed to charter a path to growth in these conditions? According to a recent analysis published by the Gartner Group, the events of the past 18 months have landed companies in two distinct categories. They’re either Disruption Shapers (they’re able to pivot quickly and have a culture that allows them to use disruption as an advantage over their competitors) or they’re Disruption Responders (they’ve remained mostly in reactive mode and have witnessed some aspects of their businesses struggle as they try to address each new disruption as it occurs).
Gartner has identified a list of key criteria that companies need to excel at in order to remain Disruption Shapers. Some of these include:
- Visibility
- Resilience
- Agility
- Product Portfolio Complexity
While some of these seem obvious, if you take a hard look at your own company, what grade would you give yourself in each category? In our opinion, most converters and suppliers are rock stars when it comes to resilience. Innovation, perseverance and technological savvy are at the heart of companies’ success in our industry. But when it comes to visibility and effective messaging behind product portfolio complexity, there is a vast difference in how well some companies do in these categories compared to others among both converters and suppliers.
Given the events of the past 18 months, high visibility and messaging behind your company’s products and portfolio mix is imperative. Never has there been a time where a company’s perception is more important. Companies are in major caution mode and to contemplate making a change to a new label vendor, ink or plate supplier, labelstock manufacturer or press supplier is going to take a lot more impactful marketing and sales prowess than it used to. Do your customers and prospects really understand how agile you are and how good you are at what you do? Do they have a clear view of your portfolio complexity and the things that differentiate you from your competitors? They need to. If you’re unsure of where to start, we can help.
While some of these seem obvious, if you take a hard look at your own company, what grade would you give yourself in each category? In our opinion, most converters and suppliers are rock stars when it comes to resilience. Innovation, perseverance and technological savvy are at the heart of companies’ success in our industry. But when it comes to visibility and effective messaging behind product portfolio complexity, there is a vast difference in how well some companies do in these categories compared to others among both converters and suppliers.
Given the events of the past 18 months, high visibility and messaging behind your company’s products and portfolio mix is imperative. Never has there been a time where a company’s perception is more important. Companies are in major caution mode and to contemplate making a change to a new label vendor, ink or plate supplier, labelstock manufacturer or press supplier is going to take a lot more impactful marketing and sales prowess than it used to. Do your customers and prospects really understand how agile you are and how good you are at what you do? Do they have a clear view of your portfolio complexity and the things that differentiate you from your competitors? They need to.
If you’re unsure of where to start, we can help.
3. What we’ve learned: During a Global Pandemic, ‘Just in Case’ beats Just-in-Time
Automotive palindromes for the win. Even though not one of us here at LPC drives A TOYOTA (See what we did there? Reads the same backwards as forwards),we can certainly appreciate how well the company has done over the past year and a half. You can’t read the Wall Street Journal or The Financial Times on any given day without seeing an article on the state of the alarming semiconductor shortage that has plagued the production lines of Ford Motor Co., GM, Daimler Benz, Volkswagen, Renault and BMW, forcing these companies to scale back due to the shortages.
However, Toyota has ridden out the shortage storm far better than their competitors. Why? Lessons learned. Following the devastating Fukushima earthquake and tsunami in 2011, large chunks of Japan’s primary industrial regions were decimated. It turned out that the world-famous pioneer of the intricate Just-in-Time manufacturing model was crushed by the company’s reliance on a structure that had effectively eradicated surplus inventory and delivered goods to production lines at the precise moment they were needed.
In the natural disaster’s aftermath, and as a result, Toyota changed their game and their new favorite word became 備蓄 (for those of you who don’t speak Japanese, that word is stockpile). For all outsourced components (including semiconductor chips), Toyota demanded, and still does, that their suppliers constantly maintain up to six months or more of a buffer supply of materials at all times.
Automotive palindromes for the just-in-case supply chain win!
4. What we’re jazzed about: Cracking the End-User/Brand Magazine Feature Conundrum
We’re a big fan of drafting comprehensive case studies for our clients. It’s a great way to tell a success story and enable our clients to shine and typically their customers love the attention as well. Case studies are perfect fodder for web content, social posts and email blasts. We’ve found that they are also great co-marketing opportunities where clients, converters and brands can all use the content in their own channels.
And the best part is that the magazines (both print-related … and the holy grail – the brand magazines) love these stories and typically reprint them with few changes!
Take a look at this great case study from our client Fathom Optics which appeared in BXP Magazine (as well as The Dieline and Label and Narrow Web!)
5. What makes us blush:
We love our clients. Okay, everybody says that. But seriously, they’re awesome. And here’s what some of them have to say about us. (And if you’d like to find out more about the ways we help converters and suppliers, this link will take you to our brochure.)