It’s a food and beverage (F&B) company’s nightmare…a missing reference to an ingredient or a language translation error on the label causes a product recall, or an incorrect 800 number on the package connects consumers to an adult phone line. Just last week boxes of a new cereal, Ochocinco’s, were removed from store shelves after the discovery that a phone number on the package connected to an adult phone line instead of a children’s charity. These types of mistakes happen too often and make big headlines when they do.
Stephen Birtsas, a manager at Kalypso, is an industry veteran and subject matter expert on the packaging and artwork development process, so I’ve asked him to join me this month in looking at actions F&B companies can take to minimize these costly, and potentially career-ending, packaging errors. Here are our combined observations.
First, let’s consider that a significant majority of F&B companies could improve their performance by changing the processes and technologies used to support their packaging artwork process. A joint Siemens-AMR Research survey of consumer product companies found that only 35 percent of those firms have taken steps in IT to improve the packaging and artwork process—despite reporting that defects and errors in package copy and artwork are primary reasons for product recalls costing millions of dollars in lost revenue [1]. Beyond preventing recalls, AMR observes that technology can reduce the time for packaging artwork approval by 30 percent and improve productivity by 5 percent [2].
Some companies are turning to product lifecycle management (PLM) systems to address their packaging. Other leaders are implementing best-of-breed packaging artwork management (PAM) software systems to significantly reduce or eliminate packaging artwork errors. Key functions offered by PAM solutions include automated workflow, Web‐based artwork annotation and mark‐up, electronic color management, digital asset management, copy certification and automatic artwork generation.
As the graphic below illustrates, it is not a matter of choosing PAM over PLM. Instead, PAM
can fit within a PLM platform to the provide an integrated solution for effectively managing packaging artwork within the larger product development process.
When deciding whether your F&B company can benefit from standardizing on a PAM system, consider whether:
- Your business uses variety of systems, processes, and procedures to manage printed packaging components across multiple global sites.
- You have different design and marketing teams across the supply chain creating their own databases of artwork and packaging information, leaving no visibility.
- Your packaging continually evolves based on changes in consumer needs, government regulations, product formulations, and environmental requirements.
- Your graphic services department is struggling to support faster and more complex product development.
If one or more of these scenarios describes your business, the chances are high that you could reduce risk, improve productivity, and enhance profitability by adopting a PAM system.
The question then is, “Which one?” Among any PAM systems evaluated, the core functionality should provide the following:
- A single version of the truth for all digital assets and their relationships, much like a PLM system provides a single version of truth with the product data record.
- Integration to PLM.
- A digital product brief that describes both the creative and technical elements.
- The ability to link to other disciplines that are involved in packaging and artwork.
- Digital prototyping, virtual design, and visualization functionality to streamline and automate design elements.
- Collaborative artwork management to facilitate decision-making and ensure consistency.
Hand-in-hand with the traceability offered by PLM systems, PAM solutions for managing packaging artwork empower F&B companies to avoid costly recalls while improving overall efficiency and profitability. We’ve seen two clients with packaging, artwork, label scrap and rework reductions of over $45 million per year. The Siemens-AMR report [3] sites additional benefits; these include:
- Reducing artwork time by 30 to 50 percent.
- Reducing package design time by more than 80 percent.
- Increasing productivity overall by 30 to 50 percent.
- Reducing costs in the packaging and artwork development process by 25 percent.
Next month we will return to an exploration of how platform-based product development and pipeline and portfolio management can help manage F&B product complexity.
George Young is a founding partner of management consulting firm Kalypso (www.kalypso.com), which specializes in innovation, and he leads Kalypso’s Consumer Packaged Goods practice. He has more than 20 years of industry experience in executive management consulting roles. He holds four US patents and was named the 1994 Northeast Ohio Inventor of the Year. Stephen Birtsas is a manager at Kalypso, with expertise in consumer packaged goods and the packaging and artwork development process.
[1] Packaging and Artwork Management for Consumer Products by Siemens PLM Software, 2010.
[2] The ABCs of Packaging Don't Add Up for Value, AMR Research Blog, Laura Cercere, May 22, 2009.
[3] Packaging and Artwork Management for Consumer Products by Siemens PLM Software, 2010.
