Impact of the Corona Pandemic on the Packaging Machinery Industry

The pandemic has had a huge influence on the day-to-day routine of the consumer, and on the work of packaging machinery engineers. After heavy losses, the order books are slowly filling up again and the “new normal” is becoming established. Business travel is still down and digitalisation is growing expansively.

While we have been dealing with more stringent restrictions from the government since the middle of March 2020 here in Germany, other parts of the world were placed under strict measures far earlier on. Various lockdowns, travel bans, border closures and the delivery bottlenecks that come with them, along with the increases in prices for raw materials, have forced the economy as a whole to rethink and innovate.

Challenges that machine engineers and system engineers are facing

Germany is the world champion in exporting. In addition to this, trade fairs for the packaging industry and the process industry that is linked to it, such as interpack, your world-leading trade fair, could not be held during the pandemic. This meant that it was difficult to initiate new business in particular and relationships with existing customers could not be cultivated as intensively.

Richard Clemens, the Managing Director of the VDMA, confirms that there have been changes in the market: “The order level has picked up significantly in comparison to 2020, but we have a long way to go before we’re back to the level we were at before the pandemic".

A digitalisation boost for the packaging industry

Aids are overwhelmingly digital: They include virtual meetings and conferences, online congresses and augmented or virtual reality, to name a few. “With virtual commissioning, sometimes even with 3D glasses, we were able to achieve far more than we’d imagined just two years ago, but it doesn’t replace on-site assembly 100%”, explains Clemens.

At Kautex, the machines are fitted with many cameras for commissioning in order to be able to record the critical points in particular during the virtual commissioning, and this is streamed live. “Virtual commissioning does, naturally, have some disadvantages as interaction with the technicians is missing”, Müller acknowledges, “but at the same time, we can also see the advantages: more technicians, including those from the customer’s other plants, can be connected so that they are present at the approval”.

Thanks to Kautex’s global presence, and in particular its site in China, the company had a headstart as they were already aware of the ramifications of the pandemic and the necessary remedial measures for it early on. “We were able to prepare our staff for home office within a very short amount of time”, reports Müller, “we changed the infrastructure and working processes and brought in the hardware. Home office was implemented for everyone, from sales executives to design engineers.”

Clemens confirms: “All companies wanted, above all, to maintain their own production capability. Shift work was introduced in the halls. There were single offices, and the distances between individual workers were increased to 5 metres in some areas”.

At the beginning of the pandemic, the biggest tasks were to comply with the new hygiene regulations. Home office was still a long way off being common practice. Vague directives from the government meant that everyone had to apply their own interpretation.

The VDMA set up a special Corona website for its members in order to inform them on the new directives. For the members, the responses to the travel questions and the associated current provisions were the most important, as these vary from state to state. Data security and data protection are other topics that play a huge role, particularly in virtual commissioning, which is still new.

“Data security is not just a hot topic when dealing with customers, but also when I send employees into home office”, explains Clemens.

Travel restrictions in machine engineering with an impact on new customer business and commissioning

The toughest element, even today, remains planning travel. This affects both sales and distribution, where it is crucial to maintain and build contact with customers, and every single fitter who wants to travel to repair or commission machines and to provide training for the customer’s team.

“Customer care is, in some aspects, becoming easier because we can visit more than one customer a day virtually, but at the same time, this is to the detriment of the strength of the relationship”, reports Müller, considering his role, “there are always two sides to everything. For some new orders, we’re sure that we wouldn’t have got them if travel conditions were normal. Now, we’ve been able to bring in our technical team in an online meeting, which the customer was really enthusiastic about”.

Increasing prices for raw materials also give machine engineers in the packaging industry food for thought

“We are seeing price increases for electronic components, and delivery issues at the same time. In addition, the prices for semi-finished products, such as steel and wood, are also rising. The machines might not be made of wood, but they are packed in wooden containers. These are all factors that can hit hard”, says Clemens, evaluating the situation.

Muller estimates the future volume of business travel as follows: “I can’t imagine that we’ll go back to the amount of travel we used to undertake”.

Strategic orientation via more communication with the partner companies

Kautex Maschinenbau GmbH constantly monitors its supply chain with regard to the pandemic in order to prevent potential dependencies and supply bottlenecks. Overall, more communication is required due to the pandemic, and our suppliers are included in this. “We decided to go for breadth in terms of suppliers and entered into further partnerships”, states Müller, “we want partnerships that enable us to develop sustainable solutions that add value for our customers. Transparent communication on the path we take together into the future is key here”.

Trade fairs and personal contact are vital in winning over new customers

Looking back at the closures of mass events and trade fairs, Clemens points out the feedback from member companies: “The companies have saved an awful lot of money because the trade fairs were cancelled, and they thought that was great for the first two or three months. Well, at least till they noticed that that was just one side of the coin: conversely, we do need the events and trade fairs to gain customer business. A short while later, the mood had changed: everyone started saying, ‘we need more customer contact, we need to speak to people face to face’. We may well be able to maintain existing customers that we already know online, but bringing new customers on board is really tough”.