PD_Packaging Digest

Packaging Digest, April 2014

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19 www.PackagingDigest.com APRIL 2014 // TRENDS How to scale packaging line automation around the world Global manufacturers MATCH CAPITAL EXPENDITURES OF PACKAGING MACHINERY to specif c market needs and personnel skill sets. Lisa McTigue Pierce, Executive Editor When it comes to selecting packaging machinery to scale up around the world, global companies are faced with a decision: when—and where— to invest in automated machinery vs semi- automated systems? Interest for American products in emerging countries is on the rise partly because of the growing middle class in some of those areas. From a capital equipment need, semi-automatic machines often f t the packaging operation needs in those countries. Yet, to be competitive in the United States, companies often focus on highly automated packaging systems. Members of Packaging Digest's Editorial Advisory Board give us their take on how they look at—and handle—the dichotomy. Peter Macauley, director, global packaging & sustainability, Abbott Laboratories: As we invest in new manufacturing capabilities in some of those emerging countries, we do have to match what the line capabilities are to the skill sets that are there. Also, you have to match it to what the labor rates are, as well. We don't always put in the same equipment that we may do, say, in an established country like the U.S. and Europe, as we would in other areas of the globe. Joe Keller, section head, hair care R&D packaging development, T e Procter & Gamble Co.: I would agree. We try to take a long-term view to it, as well. We standardize it globally because that has other benef ts—being able to transfer to the highest one, one region to the next, and being able to troubleshoot things more easily if your lines are standard. We might look ahead and say, okay, labor rates are eventually going to level out between the regions, do these other benef ts make it sensible to go ahead and install a more highly automated piece of equipment in a region where labor rates today are still low knowing that they're going to come up as we've seen in China recently? You do need to look at what the local situation is, but you also need to take a long-term view and ask "Does it make sense going forward with it?" Michael Okoroafor, vp-packaging R&D/ innovation, H.J. Heinz: You described the dichotomy well. However, they converge at some point. Let me explain. As a new entrant in an emerging market, you don't want to go with the most sophisticated equipment because maybe the skill level is not there. T ere's also a need to keep the people there employed. So at the entry point, you go with basic equipment that requires people watching it. But you're going to face competition. If you don't do a lot of things with robots and automation, pretty soon, you f nd yourself not being competitive. At some point, it will converge to purely automated devices using less people so you can do it more consistently and, more importantly, more cost ef ectively. Because af ordability is even more critical when you go in the emerging markets because the [consumers'] buying power is not as high as in the U.S. or Europe. Oliver Campbell, director, worldwide procurement, packaging & packaging engineering, Dell: We have global operations. We often think of China as low cost, but labor wages are actually rising there. It's interesting to see more packaging automation go into countries such as China. Automation is occurring here as well through a larger role in the def nition phase of a project. Predominantly, it's how boxes get erected. Or, can we deliver a more consolidated packaging assembly to the Multi-national manufacturers use a number of factors to determine whether to invest in highly automated lines (left) or start with semi-automatic operations and then scale up. Continued on page 20 "If you don't do a lot of things with robots and automation, pretty soon, you f nd yourself not being competitive." — Michael Okoroafor, vp-packaging R&D/innovation, H.J. Heinz ES413431_PD1404_019.pgs 03.27.2014 22:54 UBM black yellow magenta cyan

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