Post-pandemic relapse in packaging and processing?

By Jan-Oliver Sestak and Lisa Staedtler

While many industries suffered directly under the coronavirus pandemic, the same cannot be said for manufacturers of packaging and processing equipment. On the contrary, sales soared and order books filled up handsomely through 2022 as supply chain shortages and long lead times prompted customers to bring forward planned investments.

Since then, however, the order intake has been heading south and now threatens to fall below pre-pandemic levels. Given a generally lackluster economy, the current shortage of skilled labor and widespread inflationary trends, OEMs have plenty to think about to safeguard both short-term profits and their longer-term prospects.

In a new in-depth analysis, Roland Berger combines extensive research with its wealth of project practice to benchmark the industry, explore the issues facing packaging and processing equipment players, and identify strategies to help them emerge stronger from their current challenges.

With margins on machinery likely to stay flat at least for the foreseeable future, the article argues that it is time for companies to look more closely at their service business. Substantially fatter margins are the order of the day here, albeit only if manufacturers carefully fit their service portfolios to the markets and customer segments they serve.

The proactive path to profitability

One key finding is the need to develop a more proactive approach to service provisioning: Rather than simply waiting until a machine breaks down or a customer calls to request this or that part, service champions are delivering performance that eases known points of pain and delivers measurable value to customers. The study explores how close customer intimacy, clear communication and continuous improvement are essential so that OEMs adopting this strategy can give customers guaranteed outcomes instead of narrowly defined capabilities.

Give them value!

This shift of focus to “pain relief” and value-based service delivery creates excellent opportunities for service providers to build deep and lasting relationships with customers. And here, the study reveals how the companies leading this paradigmatic shift are increasingly relying on predictive analytics, remote services and other crucial digital capabilities to constantly improve the service they give to customers, the efficiency of their internal processes and hence the strength of their customer relationships.

This insightful panorama of an industry in transition concludes by detailing six aspects that are vital if manufacturers are to successfully embrace this innovative approach to service delivery and look forward to a sustainably profitable future. It also introduces Roland Berger’s “anything as a service” (or “XaaS”) maturity framework as a useful point of departure.

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