Josephine Coombe discusses the benefits digitalisation is bringing to the luxury packaging industry
In a world where luxury-oriented consumers favour uniqueness, many brands are capitalising on this demand through premiumisation of products. The ability to swiftly customise luxury products is becoming a supply chain competitive advantage in luxury goods.
To accomplish this, brands are increasingly leaning on their external manufacturing and contract packing partners to co-create specialised products. These external supply chain partners are thus acting as a strategic arm of innovation for brands, offering specialised capabilities that in-house manufacturing may not be equipped to provide. Thus, there is now a greater need for supplier collaboration across the ecosystem of parties involved in bringing products to market, and digital transformation is increasingly recognised as key to effectively synchronising external supply chain activity.
Flexibility & agility
As luxury brands look to undertake late-stage customisation or finishing work, co-packing partners are also leveraging digitalisation to optimise estimating, materials and labour planning, and production processes. Whether it is meeting demand for particular retail formats, meeting localised or seasonal product needs, or creating promotions and displays for luxury good variants, digitalisation is allowing co-packers to shed outdated manual procedures, eliminate inefficiency, and accelerate throughput. In fact, digitalisation has been a major tool for successful contract packing operations, enabling higher levels of responsiveness and agility in the brand and supplier partnership. A digitalised shop floor will realise faster line performance insights by monitoring real-time production performance and tracking unexpected downtime, as well as being able to quickly compare the expected costs versus actual costs without needing to manually compile information.
In addition, brands are increasingly seeking external partners with sustainability-first mindsets. Here, again, digitalisation has a role to play, helping a business reduce its impact on the environment through efficient management of stock and avoidance of waste. Digitalisation enables improved inventory and materials management, ensures accurate tracking of expiry dates, and enables avoidance of materials shortages, all of which leads to reduced supply chain waste and less need for expedited freight.
Digitalised contract packers have increased visibility over job costing, scheduling, production and quality control workflows. Real-time production data capture removes bottlenecks and speeds problem resolution. Planners and production supervisors stay on plan, reduce costs, and accelerate response times, ensuring KPI success. Co-packing software can also be integrated with existing WMS and ERP systems allowing co-packing providers to light up the black box of production, and share order milestone information with customers more easily. Digitalised co-packers see improvements in quality control and traceability, reductions in labour and material costs, and overall improved profit margins as blind spots of inefficiency are eliminated.
To meet heightened expectations of luxury brand owners and stand out amongst competitors in an increasingly crowded market, forward thinking contract packers are those who realise the benefits of digital transformation to better meet the needs of FMCG brands developing premiumised product offerings. And brands themselves are looking to supplier collaboration solutions to better connect and collaborate with these suppliers.
Software such as Nulogy is helping meet the demand from both luxury brands and their contract packers in a market segment where rapid innovation is key to success.
For more information, visit: https://nulogy.com