How U.S. Manufacturers Can Compete (An End User s Perspective)

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1 How U.S. Manufacturers Can Compete (An End User s Perspective) Presented by Panos Kinigakis Kraft Foods R&D Glenview, IL

2 Outline Current Trends of Package Structures, Styles & Processes Materials- Forms- Systems Challenges for the Consumer Product Manufacturers Transformation Needs Supply Chain Complexity- Cost Skills Development

3 Outline continued Emerging Opportunities for Manufacturers Innovations - Flexibility Integration Cost Mgt Initiatives for Success Internal - External

4 Structure Developments in Multilayer Films High performance adhesive laminations, adhesives w/100% solids, barrier coextrusions, metallizations, barrier coatings. Cans, glass jars

5 Structure Developments in Sealants LDPE, LLDPE, Ionomers, Cohesives, EAA, EVA, Metalocenes Nitrocellulose

6 Structure Developments in Labels RFID tag Re: Avery Dennison

7 Current Trends of Packaging Styles 4-sided, 3-sided & fin- sealed Stand-Up Bags over wrap

8 Current Trends of Packaging Styles by the Introduction of Shrink Sleeves Composite canisters Plastic jars, cups, bowls w/printed shrink sleeves

9 Current Trends of Packaging Styles to Improve Functionality Easy Access Notches, serrations Laser Scores

10 Current Trends of Packaging Styles to Improve Functionality Reclosable Features Tapes, dead folds, Tin ties Zippers, slider zippers, snaps

11 Current Trends of Packaging Styles to Improve Functionality Susceptors Venting Valves Controlled gas transmission rates Release properties Scavengers

12 Current Trends in Packaging Processes Thermal Flexible retorted packages Jars, cans, retorted rigid containers

13 Current Trends in Packaging Processes High Pressure Sterilization High Pressure Pasteurization Hot Filling Aseptic F/F/S Pick & Place Automation Bulk Handling / Sorting Machinability

14 Current Trends in Packaging Processes Sealing Cold Seal Heat Conduction Ultrasonic Induction Sealing Pressure Sensitive Labeling

15 Current Trends in Packaging Processes Flow-Wrapping Web handling (tracking/tension controls, attachment integration) Forming tools (surface treatments, fabrication, wear, modularity) Infeed integration (controls, sensors)

16 Current Trends in Packaging Processes Flow-Wrapping Inspection (integrated w/rejection) Sealing (drives, PID controls, cold seal options, modes) Process simulation, animation

17 Current Trends in Packaging Processes Horizontal and Vertical F/F/S Web handling (controls & attachment integrations) Sealing upgrades (seal creep, headspace control) Flexibility of package form (gusseted, top load, side load) MAP enabled

18 Current Trends in Packaging Processes High Speed Horizontal F/F/S Web handling (tracking/tension controls, continuous motion mode) Package size flexibility (modular tooling) Sealing upgrades (embedded heat elements) Package style flexibility (3- sided, 4-sided, SUP)

19 Current Trends in Packaging Processes Retort Sterilization Override pressure controls Heat distribution modeling Package nesting flexibility Package handling automation (loading, unloading)

20 Current Trends in Packaging Processes Film web compatibility (chemical and thermomechanical) Sealing upgrades (tooling durability) Integrated scoring and inspecting stations Web handling controls Aseptic Operations

21 Challenges for the Consumer Products Manufacturer Transformation : Consumer Convenience Ease of Preparation Container becomes a medium for preparation/mixing of the product. No missing components Kits w/clear instructions

22 Challenges for the Consumer Products Manufacturer Transformation: Consumer Convenience Ease of Preparation Flexible automation Robotic assembly systems

23 Challenges for the Consumer Products Manufacturer Consumer Convenience Disposability Environmentally friendly Light weight, dead fold, down-gauging. Flexible Packaging Association Fall Executive Conference Sept. 22, 2004 Chicago, IL Biodegradable, Nanocomposites, Monowebs

24 Challenges for the Consumer Products Manufacturer Transformation: Customization Addressing consumption habits, personal preferences, regional demographics Asset flexibility Inventory control Supply chain mgt Flexible Automation Co-manufacturing

25 Challenges for the Consumer Products Manufacturer Transformation: Product Preservation/Freshness Oxidative & thermo-mechanical mechanical stability Seal integrity, compatibility. Laminations, additives, sealants, functionalized compositions.

26 Challenges for the Consumer Products Manufacturer Transformation: Safety Tamper evidence Handling durability Authentication Abuse indicators Handling history indicators Holograms Shrink bands

27 Challenges for the Consumer Products Manufacturer Transformation: Quality Preservation of taste, texture, flavor. Prevention of infestation Enhance sensory Barriers, coatings, sealants, active reagents

28 Challenges for the Consumer Products Manufacturer Transformation: Merchandising Market risks Technical feasibility Asset flexibility Product Differentiation Graphic enhancements Integrated transformation Complementing benefits

29 Challenges for the Consumer Products Manufacturer Transformation: Merchandising Channel Expansion Handling Asset Flexibility Customer Specifications Distribution Flexibility Printed over-wraps Multi-packs Technology Transfer

30 Challenges for the Consumer Products Manufacturer Transformation: Merchandising Graphics Retain brand image Fast adapt Expansion of flexography Holography Digital printing Clear over-wrap

31 Challenges for the Consumer Products Manufacturer Transformation: Merchandising Graphics Combine format & change of graphics De-metallization Flat bottom gusset Structural enhancement

32 Challenges for the Consumer Products Manufacturer Transformation: Merchandising Promotions, Shelving, POS Top-loading Customizing displays Asset flexibility Size & count flexibility Carton substitution w/shrink wrapping, end-fold wrapping

33 Challenges for the Consumer Products Manufacturer Total Manufacturing Cost Mgt Automation Enabler Fixed Automation Flexible Automation Custom Automation Customized Automation Interactive process in developing specs for machines & materials

34 Challenges for the Consumer Products Manufacturer Total Manufacturing Cost Mgt Asset Flexibility Fixed Automation vs. Flexible Automation

35 Challenges for the Consumer Products Manufacturer Total Manufacturing Cost Mgt Asset Flexibility Enabler Branding synergies Modular unit operations Component sourcing Automation of kit assemblies Customized end-effectors

36 Challenges for the Consumer Products Manufacturer Total Manufacturing Cost Mgt Process Controls Sealing, tracking, tension, handling, inspection Resins, Additives Thermo-mechanical properties, Processes (compounding, conversion)

37 Challenges for the Consumer Products Manufacturer Total Manufacturing Cost Mgt Yields Retort, aseptic & ultra clean Inspection standards Finished product specs Equipment specs Material specs Multidiscipline skills

38 Challenges for the Consumer Products Manufacturer Total Manufacturing Cost Mgt Efficiencies Incoming material quality (specs & conformance) Seasonal fluctuations Equipment specs Multidiscipline skills Cross-Training

39 Challenges for the Consumer Products Manufacturer Total Manufacturing Cost Mgt Machine/Material Interactions Lacking diversity of skills Departmentalized functions Endless development cycles Market risks Resource development

40 Challenges for the Consumer Products Manufacturer Total Manufacturing Cost Mgt Cost of Assets Replacing current assets Upgrading existing assets Optimizing capacity

41 Challenges for the U.S. Material Manufacturer Material Cost Shrinking conversion margins Commodity costs Asset dedication throughout the supply chain

42 Challenges for Transformations in Flexible Packaging Material Performance Improvement Compatibility with modern equipment Separation of end-user from primary component producer Multiple processes in the supply chain to establish compatibility

43 Challenges for Transformations in Flexible Packaging Material Performance Improvement Fundamental material research is currently focused in high value added applications (i.e. aerospace, automotive, IC, pharmaceutical)

44 Emerging Opportunities for Manufacturers Facilitate the Transformation of the Invention to Innovation

45 Emerging Opportunities for Manufacturers Impact on the Supply Chain Co-operation of Resin and additives suppliers Early involvement of the compounders Expansion of the scientific skills of the converters Establishing linkages w/ packaging machine manufacturers Flexible Packaging Association Fall Executive Conference Sept. 22, 2004 Chicago, IL

46 Emerging Opportunities for Manufacturers Impact on the Supply Chain Coordination of commercialization w/ end user Development of specs for materials, equipment & package Strategic flexibility on equipment / tooling

47 Initiatives for Success Develop Multidiscipline Internal Resources Program Coordinators Combining Technical Skills with: Product development Marketing Manufacturing Legal Finance Procurement

48 Establishing : Partnerships Initiatives for Success Co-developments Funding: Academic programs External consortiums Exploring: Commercialization of inventions from government programs

49 Contact: Panos Kinigakis CPP Kraft Foods Fellow Kraft Foods Inc. Global Technology & Quality 801 Waukegan Road Glenview, IL Tel. (847)