Integration key to progress for packaging and processing sectors

According to a survey by Pira International, the integration of packaging and processing disciplines hold the key to the tactical and strategic development of end user companies.

The survey, entitled the Buying Behaviour in Packaging and Processing markets was conducted on behalf of Total Processing & Packaging 2004​ from Reed Exhibition Companies. The findings show that 75 per cent of respondents believe that the purchase and specification of packaging and processing machinery is linked to the future development of their businesses, while 72 per cent believe that these functions will continue to merge.

A shift in emphasis away from solely price to a growing need for quality and reliability was found among those with a particular responsibility for the purchase of materials & containers. However price continues to be the key packaging objective for the majority of user companies, followed by legislative compliance and less damage to packs and consequently product. To set this in context, the main buying criteria among material & container purchasers are quality in first place followed by reliability and price in joint second place.

The major departmental influences on the purchasing of materials & containers and processing & packaging machinery are similar with procurement and purchasing in top spot. However, there is a trend towards the marketing function when it comes to major influences on design changes, new product development, and new packaging formats and material choices. This trend is echoed within the processing and packaging machinery sector where respondents indicated that the marketing function was more important than the machinery supplier when it came to making purchasing and specifying decisions.

Show director Barbara Jackson commented: "This research was undertaken to help the management team of Total Processing & Packaging 2004 better understand the key drivers and management philosophies behind the specification and purchase of both processing & packaging machinery, and materials & containers.​

"In order to produce a 'Total Solutions' event that best reflects and serves the needs of the complete packaging supply chain, it is essential that we fully understand the needs of industry. The independent Pira Research is just one prong in our review of the major influences on both packaging supply and purchase."​

Jackson added that, "Importantly the research seems to bear out our commitment to creating this type of event with 81 per cent of respondents within the processing and packaging machinery sector believing that bringing together all the relevant suppliers across a complete line at one exhibition would be 'useful' or 'very useful'."​

Pira International interviewed 165 packaging professionals from end user companies covering: Buyers and Specifiers of Packaging Materials and Containers, and Packaging and Processing Machinery in order to assess current and future trends, and analyse the major influences on buying behaviour.

A direct correlation was found between both research phases when it came to why respondents visited shows. In the materials and containers sector 34 per cent quoted innovation as the major driver, with meeting new suppliers in second place at 26 per cent. In the processing and packaging machinery phase 22 per cent stated new technology, with 17 per cent for both new suppliers and comparisons of machinery models and their capabilities.

However, an important difference is the price driven nature of the materials and containers buyer compared with the processing and packaging machinery sector where price does not play such an important role, coming in at a lowly fifth place.

The research also found that 53 per cent of those interviewed with responsibility for materials & container purchase felt their companies would be increasingly rationalising their supplier bases with percentage decreases ranging over a 3 year period from between 10 per cent to more than 50 per cent.

Strategic alliances with suppliers are also seen as a method of combating raw material price increases, while other advantages include securing quality and the ability to create better buyer/supplier relationships on both a pan-European and global supply basis.

Commenting on these trends interviewees said that they would be driven by the need to create a better understanding of the needs of packer/fillers which in turn should provide cost and supply chain efficiencies, brand consistency, quality of supply and advances in technology.

Interestingly in the processing and packaging machinery sector more than 53 per cent said that they did not envisage a move towards strategic alliances. Nonetheless about 40 per cent of respondents said that alliances with groups of selected manufacturers were part of their plans.

The majority of both packaging materials and packaging/processing machinery respondents spend up to 20 per cent of their time meeting suppliers. However, when compared, packaging materials buyers spend more time with suppliers (35 per cent) than the processing and packaging machinery end user sector (23 per cent).

Commenting on this Barbara Jackson said, "This is good news for exhibitions as they provide a format in which visitors can meet the majority of existing and prospective suppliers under one roof, making shows a cost-effective use of time."​

Shows were also very important to senior personnel within this sector, with 60 per cent of senior management with a responsibility for capital expenditure of between £10,000 (€13,800) - £500,000+ attending exhibitions.

Commenting on the results of the research Jackson said: "The main attraction of exhibitions for respondents in both areas is the ability to view the latest innovations and technologies, and to meet suppliers."​