To keep a company alive, you need to find a balance between innovation and EBIT/NOA RONOA (Return On Net Operating Assets), to recognize the full business processes and to give room for creativity, he said.
DUI (Doing, Using, Interacting)
Speaking at this year’s EuroPack Summit in Monaco, France, Dr Buren said to increase your RONOA while staying a true packaging innovator, companies need to practice DUI (Doing, Using, Interacting), working with their customers from the bottom of the supply chain to the top, looking at other markets and partners, technology carriers and how to control innovative processes.
“We are living in a world categorized by articles which have a product lifestyle of three years or less. In packaging, a technological issue might take days, weeks or months to develop. A package takes a year to two years to develop, a packaging line three years and a packaging system 10 years plus,” added Buren.
“How does innovation take place in such an environment which has to be somehow measured. Many people in packaging think innovation is like Andy Warhol’s Campbell’s soup cans but it involves more long term development.
“Compared to other industries packaging is not innovative at all, because it has to work with shorter lifecycles. There is an innovation backlog and no use of centrally working with all parts of the supply chain, no innovator culture. Some of that may be due to the fact it’s hard to measure how successful innovation is.”
Buren teaches people who are interested in packaging across the whole packaging supply chain at IPI with education seminars. It also has a master of engineering course in packaging technology in Switzerland.
Innovation is the process from idea to application
He believes innovation is the process from idea to application; better solutions to meet requirements and needs; better quality, durability, service, price; better job satisfaction; breaking into other markets and society’s catalyst to grow.
“It’s the only thing that makes growth happen; but the downsides are uncertainty, risks, complexity amid many conflicts,” he said.
“If look at what is going on in a company it involves technology and business processes, design and regulations. You can make a lot of money with good products. But you need to sell them right using the right machinery and equipment, using EBIT to improve ratio and to keep NOA down.
“The problem is what is going to happen with your net operating assets, when you need more money to do certain types of packaging ie bio materials, sustainability, that’s expensive. Who is going to pay for it being green.
“Equipment is tricky. Using a single machine might be more expensive but the overall process is much improved.”
According to Buren, outside innovations are not under the control of your business, for example self-service check-out tills in supermarkets.
“We have no idea what IT is going to build in the next 15 years, or how far the internet will go in terms of what it can do for packaging. These outside influences force companies to build operating assets they had never thought of,” he said.
“Sustainability; government policies and regulations can force firms to do things they never expected. You can be forced to invest in areas you never thought of.
“If you are careful, you might find you can build your own innovative processes to take advantage of what the world is doing, ie packaging that can talk to each other, industry 4.0 and how the packaging industry will evolve with that.”