The Power of Packaging: Transforming Bubble Wrap into Product-as-a-Service
We have all experienced the exhilaration of receiving a highly anticipated package in the mail, only to discover the enclosed product is damaged. Much to our dismay, the culprit is often inadequate packaging. Unfortunately, bubble wrap can be your friend or foe, depending on how it performs.
When packaging material fails to fulfill its intended function, to protect and secure the goods it envelops during transit, customer satisfaction takes a hit. On top of that, product replacement costs and additional shipping fees cut into profits. Pregis, one of the leading providers of packaging materials, understands this all too well. Their customers depend on them to safeguard their fragile products throughout the transport journey. Leveraging new technology to help them “think inside the box,” as their company motto proclaims, they are embracing the power of packaging with digital innovation.
How does the Internet of Things Enable Powerful Packaging?
Pregis is well known to retail giants like Amazon and Target, where protective packaging is fundamental to their business success. Pregis is taking packaging to a new level by adopting technology solutions for the Internet of Things (IoT), including SAP Connected Goods and SAP Edge Services, to digitally transform their business. With these solutions, Pregis will be able to gain new insights on product consumption and usage patterns, identify product anomalies, and send automatic alerts to service technicians when problematic packaging machines need immediate attention. Pregis will also have the ability to remotely deploy machine configurations from the cloud to the edge, lowering service and travel costs associated with manual configurations on-site. By improving technician productivity and decreasing costs associated with service visits, Pregis anticipates significant business value and ROI.
Key Business Drivers to Achieve ROI
Elvira Wallis, Senior Executive Vice President for IoT Smart Connected Business, leads a product development team at SAP that builds IoT solutions. Elvira recently shared her perspective on the Best IoT Use Cases to Achieve ROI at IoT World 2018. In the video, Elvira explains how Pregis applied a new business model approach for packaging material. The material, such as bubble wrap, foam or paper, represents their product-as-a-service or packaging as a service.
Let’s take bubble wrap as an example. To fulfill service demands, it’s essential that the bubble wrap is available on time for delivery, the machines producing the bubble wrap are operating efficiently and productively, and the technicians who service those machines don’t need to travel excessively to repair faulty packaging equipment. Elvira goes on to validate the benefits with this type of business model, emphasizing some of the key value drivers as “increasing machine uptime, decreasing travel costs with less need to perform manual repairs and maintenance locally, and higher product quality output.” Ultimately, “by servicing machines better, we service our customers better, connecting machines with ROI and business insight to better serve our customer needs,” says Elvira. This translates to happier, more satisfied customers.
Think Outside and Inside of the Box
From an IoT perspective, there are many different paths and entry points to innovate and digitally transform your business. The key is to think big, outside of the box, and explore the art of the possible. Yet, it’s important to also start small and manage growth, to minimize risk. We can learn from the experience of other companies, such as Pregis, who have successfully embarked on their IoT journey with proven results, leveraging IoT enabling technology and new product-as-a-service business models to achieve tangible business outcomes. By thinking outside and inside of the box, Pregis was able to clearly understand their unique business challenges and identify key value drivers to opportunistically improve productivity and reduce costs. They adopted the best IoT technology solutions to meet their business needs, while also serving their customer’s needs. A perfectly wrapped package inside and out.