Snyder works to continue to radically change the product portfolio of PMI with the addition of alternative products to traditional smoking. In addition to these changes, PMI also places stringent demands on the supply chain in terms of flexibility, agility and speed-to-market. Because these are the strengths of digital printing, PMI decided to invest in a hybrid digital printing line from Gallus at its Swiss development facility in Neuchâtel.
The key question for Philip Morris is: how far can they develop a digital end-to-end production line for all the smaller batch sizes within a production-related environment?
Designing A Smoke Free Future
With its strategic decision to replace conventional cigarettes with less harmful products, Philip Morris finds itself in a transformational phase marked as a journey towards a smoke-free future (www.pmi.com/who-we-are/designing-a-smoke-free-future).
Snyder says PMI is working on reducing approximately 40 billion packs of cigarettes to zero. In the transformation of the business model, the company is now confronted with new competitors and customer segments. PMI is certain, Snyder says, that in the next 12 months there will be more changes for the company than there was in the last 10 years.
From catalog to finished good in 7 days
Today, product launches or product modifications of conventional products involving two SKUs take approximately four months to get to market. In the case of a worldwide launch, the time to market increases up to two years. With such a long introduction time, the company can’t afford any more. With increasing numbers of items and SKUs, a changing market and competitive environment, the solution is not to get just a little faster. Disrupting speed-to- market requires a fundamental change in the complete supply chain.
It is clear that such a radical change is only possible with new technologies that allow a shift to production schedules on-the-fly and quickly adapt production to consumer demand. The challenge is to identify beforehand which products consumers will like the most and which products need to be in the market tomorrow. In response to the need of accelerating speed to market, PMI has established the goal of seven days from catalog to finished good production.
Speed and agility
Digital printing already offers significant flexibility, agility and quick changes in label printing. The question is why digital has not achieved this in folding carton printing yet? The answer? Digital printing is missing two things: capability and a competitive cost structure.
In conventional printing processes such as gravure and offset, very short runs are synonymous with high costs as prepress and set up costs are shared by a small volume. For large volumes, conventional processes are very effective and economical. Here, a more competitive positioning of digital printing is needed.
A few years ago, digital printing was characterized by low speeds and therefore a high cost structure, which meant that digital printing at PMI could only be used for special editions or for individual local test markets.
For PMI, runs of one million packs are still considered short runs. In recent years, however, digital printing has continued to evolve, reaching a point in terms of print speed where job orders of around 5 million blanks can be produced competitively.
“Today, order sizes of about 5 million blanks can be produced competitively with digital printing,” Snyder said. “Gravure printing is so inexpensive today as it handles high volumes. But the industry is subject to the general development trend towards smaller editions. Capital tie-up and stocks that block or slow down the supply chain are no longer desirable. As a result, the run lengths have become smaller and smaller. And, as digital printing speeds continue to increase and costs go down, more and more of the PMI product portfolio could be considered for digital printing in the future.”
PMI opts for a hybrid solution from Gallus
What digital printing has been missing are solutions for metallic inks and other digital embellishments, which make packaging in an exclusive market something special. According to PMI, it is not enough just to transfer the color digitally while the embellishing is done using either hybrid technology or a separate production step. In order to meet the market's demand for the greatest possible flexibility, agility and speed-to-market, the complete workflow must be digital.
PMI decided to explore and stress test the possibilities of digital printing itself. The modularity of the Gallus Labelfire press was the decisive factor for choosing this technology with which the hybrid components for a "Boardfire" line could be specifically configured.
The press PMI invested in is equipped with eight digital color printing units for printing with an extended color gamut, plus six flexo units including the option to apply cold foil. Today, the machine is much different from the original Labelfire design.Last December, a laser finishing module for cutting and creasing was installed. So, bit by bit, the production line is being digitized.
Where PMI goes from here
A clear awareness for PMI today is that digital technology will only bring its anticipated value if it is close to manufacturing. As an end-to-end solution, all production steps must be digital and all the necessary printing, embellishing and finishing steps must be carried out in one go.
The Gallus Labelfire line at PMI has already been utilized for the digital color standard settings of more than 50 products. Designs of over 200 SKUs have been carried out on it. In addition, stress tests were carried out under the conditions that the machine is in a factory and not a development environment. So far, packaging for one hundred million cigarettes has been produced there. This was the first step in confirming that the technology works. Now, PMI is finding out if it is an industry-ready solution that covers the comprehensive range of products and whether it will actually enable finished good production within seven days.
PMI has decided to install a digital line in a manufacturing environment of a factory in 2019 to gain insight into how the technology can be integrated into the production and planning systems. As a result, it is possible a digital printing line will be available at each PMI production site in the future.
Scroll through the images above for sense of PMI's transition to a smoke-free future with digital hybrid printing technology.