Addressing Challenges in Manufacturing Device and Consumable Systems
Historically, when consumer packaged goods (CPG) decision-makers reviewed the make-up of their business, they viewed packaging lines as cost centers and blending lines as profit centers. If a new development or technology wasn’t associated with the product, most decision-makers were hesitant to invest in it. When CPG brands talk of “product,” they are generally referring to the substance or substrate that a person consumes – not the delivery system that gets it to the point of consumption. That is all changing. How should CPGs handle a new era of packaging that is fast becoming an integral part of product allure and benefit?
No longer static containers that simply dispense, device and consumable systems are dynamic delivery modules that engage the consumer and hold the power to differentiate. For many companies used to regarding packaging merely as advertising space and product transportation, this pivot represents opportunity and marked challenges.
A perfect storm of market dynamics continues to spur the new age of device and consumable systems onward. Falling barriers to entry and fragmented marketing challenges abound, and the newest entrants to this packaging space stand to redefine the status quo.
Durable delivery systems that transform the user experience from humdrum to happily innovative? Consumers are clamoring for it. Those who recognize the timeliness of well-designed device and consumable systems are positioned to benefit most. Success means increased market share, elevated user experience and loyal customers who rave about products. That is the future of a consumer packaged goods company that rises above challenges to take packages from mere “container” to next-level delivery system. But manufacturing device and consumable systems is easier said than done. The stakes are high and the knowledge base for such endeavors is low amongst many CPGs.
Historically, brands have pursued tactics such as advertisement and container labeling to win repeat customers; now, embracing durable delivery systems that add to a consumer’s quality of life may win the race. To gain share in a saturated market, CPGs that invest in manufacturing devices and consumable systems do more than provide a solid product to the consumer—they deliver an unmatched experience. The broad challenge is how to pursue that aim.
Manufacturing Device and Consumable Systems
Addressing Supply Chain Differences
Now that consensus is solid that packaging merits further R&D spend, it’s time to address supply chain differences. Traditionally, durables and consumables have operated with separate supply chains. A supplier might manufacture the device; a packaging producer then molds the consumable. A co-packer combines those into a final product and ships to retail, (hopefully) resulting in consumer happiness. This mode isn’t as effective for device and consumable systems, which often incorporate small electronic parts heretofore not often seen in packaging.
New capability requirements for injection molding and connectivity components mean increased packaging complexity, possible chain breakdown and brand-new channels for vendor management. This amalgam of expertise is difficult to find under one roof. And the more components are outsourced, the more intricate and breakable the supply chain stands to be.
Furthermore, the connected packaging space is a better fit for higher-end durable devices with inelastic prices. Soon, though, that supply chain is likely to expand in scope. With any current hardware product, there is a good chance that sensors and connectivity are being considered to improve user experience. Current mass adoption of different sensor types is driving component costs down. As system on a chip ICs, antenna solutions and sensors that enable connected packaging continue to drop in price, eventually more brands will feature these device and consumable solutions. It’s only a matter of time. How can CPGs be ready to embrace the opportunity when it arrives?
Manufacturing Device and Consumable Systems: Capabilities Needed for Success
A continuum of ideation, development, manufacturing and security must be achieved in order for a CPG company to prosper in the device and consumable systems space. From the beginning stages of brainstorming and packaging design to ongoing manufacturing (including supply chain fluidity) and beyond, close attention to each element is challenging – and paramount.
Understanding what the consumer ultimately wants begins here. Designing a package with “bells and whistles” that do not improve the buyer experience wastes time and spend. A brand needs to understand its target market in a way that goes beyond package appearance, although aesthetic appeal and subsequent shelf appearance will always be important. How can packaging itself add value? A brand must answer this question with reasonable solutions.
Answering this question and testing possible devices before mass-market release reveals the stickiness of a device and gives companies the ability to experiment. Skip this step, and the subsequent challenges that arise may be insurmountable. A device may be high-tech and alluring, but if it doesn’t solve a problem, it’s unlikely to thrive in the marketplace.
The dream scenario is a single-source supplier – the one-stop-shop that handles development, sourcing and beyond with strategic ease. Another aspect of this packaging shift is the ongoing relationship a brand can have with the data it continually collects. Development of the tangible packaging is important, yes, but so is whatever system the brand will use to communicate with consumers through the device (if this is a chosen capability). IP protection and cybersecurity must be built in throughout the product lifecycle.
An optimized global manufacturing blueprint is a precursor for yielding consistent results. Manufacturing devices and consumable systems showcases unique challenges and opportunities, and challenges depend on the type of device or system. For example, the supply chain to support low-cost devices differs from more premium, Cloud-connected offerings. Additionally, amidst heightened tariffs and geopolitical tensions, it may become necessary to deleverage supply chains away from some historically favored suppliers.
According to Smart Packaging: Opportunities and Challenges, cybersecurity is a major concern to address; CPG consumer data privacy issues that can come with connected packaging will, if not guarded correctly, decrease any brand loyalty a company may establish thanks to embracing devices and consumable systems. The capability to secure any Cloud-bound data is paramount. Packaging can be novel and “smarter” than any other in the market, but if consumer information is not protected, that benefit becomes a liability. This is a truism for any cyber-physical system.
Even when a CPG company agrees that it’s time to invest in devices and consumable systems, it may not have the in-house expertise to do so. That’s where a partner like Jabil becomes invaluable, solving those challenges and guiding the CPG toward innovative solutions.
Much opportunity exists in the devices and consumable systems space. But without addressing the challenges detailed above, packaged goods brands will falter to gain momentum. To stay relevant, CPG companies must face these challenges with a full scope of solutions. Doing so will yield the highest chance for customer satisfaction and – ultimately – product success.
Durable Device & Consumable Systems: Game Changers For CPG
Download this point-of-view paper to get up to speed for the device and consumable era. This paper outlines how device and consumable systems begins to address today’s major trends that have led to a consumer that is more focused on sustainability, value and convenience.