IOCO Packaging: manufacturing automation gives companies a competitive edge

IOCO Packaging – a manufacturer of polymer-based food packaging with flexographic prints – has been going strong for 30 years. Located in Panevėžys, the company’s leading position in the Baltic Region has so far been recognised in the form of three separate awards for the following: technological solutions, deployment of renewable energy, and digital technologies. According to Executive Director Denas Ušinskas, this was achieved thanks to IOCO’s strategy that includes the production of goods that meet the strictest of industrial requirements, manufacturing optimisation, and social responsibility. In his view, ensuring good performance across these areas is not a one-off event, but rather an ongoing process that gradually transforms product quality and boosts competitive advantage.

INDUSTRY 4.0 – A MEANS TO INCREASED RESILIENCE

Now more than ever, we’re seeing the advantages of these decisions because the current economic and political circumstances have virtually eliminated stability and made it increasingly difficult to plan, mostly thanks to delayed materials deliveries, longer deadlines, rising costs, etc. Successful risk management requires real-time information and smart technologies that can assess situations as they develop and help plan due responses in case of emergency. Luckily, we started thinking about Industry 4.0 and made the necessary decisions early on.

We’ve been adherents of the LEAN business management philosophy for 6 years now, using all 8 of its tools, including the KANBAN system. For business change management, we use Navision. Seeking to maintain growth in line with the latest global trends, we’re also consistently implementing digitisation solutions optimised to meet our needs, as well as those of our clients and business partners.

REAL-TIME INFORMATION TRACKING FOR SUPERIOR FLEXIBILITY

One of the first changes we implemented was the digitisation of our printing block warehouse, assigning barcodes to each block dedicated to a specific client’s products. Previously, information about a packaged item’s parameters was entered manually by an employee. These this process only needs to be done once and then it’s automatically transferred to other devices. The new system allows us to track product quality and reduce human error, as well as speeds up the marking of printing blocks several times over.

The digitisation of new product development and management process was motivated by the need to design a new product that would meet the client’s needs, while avoiding human error. Our aim was to find a solution that could help us assess order quality, register project shortcomings, and store accurate data related to the new product’s manufacturing process. We also simplified order management by providing clients with an external connection to our change management system. This solution allows customers to submit and track the status of orders in a secure way.

We put a premium on having information related to company operations and procedures stored in one place and accessible in real time. To achieve this, we developed a functionality that enables the real time management of our internal procedures, with most of the data on company divisions (procurement, sales, production, quality control, finance, etc.) stored in a single data base. As a later update to this solution, we installed a production planning logic that uses stored information to automatically calculate and draw up the most cost-effective order queue.

This new system allows us to enter different types of data – order size, buyer’s location, deadlines, location of raw materials, etc. – and see which products and raw materials are stored in which of our warehouses, and in what quantity. Previously, this information had to be entered several times, in different spreadsheets, and processed using Excel. All changes were then communicated by phone and via email. Now, however, in the event of a delay in the delivery of raw materials, information is updated immediately – upon entering the relevant data, the delivery period and other related factors are updated automatically. Moreover, when drawing up recommendations, the system takes into account indicators that wouldn’t even occur to a human person, making it easier to maintain and improve service quality, and to avoid the incurring of additional costs.

The data we’re collecting is extremely useful in analysing our business performance. We can always see how long it took our employees to complete a specific task, why they used up more raw materials than planned, and when (as well as how) a specific product defect had occurred. The controllers we’ve installed specify the issues that may crop up with regards to each order (delays, raw material shortages, etc.) – and recommend preventive measures to system supervisors. These advantages, including data precision, allow us to track the entire operational chain – from initial contact with the client to product delivery.

Digitised production helps us make the right decisions, at the right time. The flexibility we’ve thereby achieved increases our competitiveness – upon a change in circumstances or the receipt of an urgent client request, we can quickly assess our capacity, make the necessary adjustments, and address the new situation.

SMART EQUIPMENT – BENEFICIAL TO PRODUCT QUALITY AND THE ENVIRONMENT

For us, innovations in production are inseparable from social responsibility, which, however, is not an advantage per se, but a natural, common sense operational philosophy. We always understood our business to be an organisation that has a social impact and is tasked with securing a healthy society, a clean environment, and happy employees. For this reason, we prioritise sustainable technology and equipment.

In 2019, responding to demand in the flexible packaging market, we purchased Uteco’s next generation printing line ONYX. This equipment uses water-borne paint and doesn’t include any substances which contain volatile organic compounds. We’re using modern digitisaton technology – the next generation, 10-colour printing machine Crystal 108, which allows for more extensive colour matching, enabling us to offer a wider range of prints to our clients. These advanced solutions and equipment make it possible to implement safety measures that help reduce air pollution and waste generation, as well as improve the product’s environmental performance and quality, and increase manufacturing productivity.

We’ve also implemented the project, “Integrating solar power-generating equipment into the manufacturing process of IOCO Packaging”, aimed at generating enough power to meet our internal requirements. The investment paid off immediately – we managed to cut our energy use by 20% in the same year, and over the next one saved as much as 346 MWh of electric power. In addition, by implementing this project, we contributed to the EU Strategy for the Baltic Sea Region “Healthy Boost”.

We have obtained the AA-level BRC Packaging Materials certificate, proving that our packaging meets global packaging material standards, and the Halal certificate, which ensures that our products are compliant with the laws of Islamic countries.

SUPERIOR EMPLOYEE ENGAGEMENT AND COOPERATION

When digitising IOCO Packaging’s operations, we paid a lot of attention to the specialists implementing the respective solutions. Technology helps us identify, change, and speed up existing processes, while all the actual thinking is still done by real human beings. Therefore, our slogan, “Happy people – successful business” is meant to draw people’s attention to the importance of human resources.

Companies often find digitisation and automation daunting – not only because of the required investment, the scope of change, and the long process of implementation, but also because of the anxiety and sense of uncertainty experienced by employees. The most effective way of dealing with the fear of imminent change that we’ve found is showing employees how those changes are going to positively impact their daily lives at work. Having an example in mind helps people to gradually become used to the changes and understand their advantages and necessity. We make preparations before every project, regardless of scope – actively communicating with clients, answering questions, and organising trainings and seminars. If needed, we also engage outside consultants and hold practice sessions that provide employees with a new perspective on things and enable them to see the value of the upcoming change. Within this process, people are attempting to change their long-term work models, which they’ve created themselves, and this may cause some discomfort. Therefore, all parties involved – shareholders no less than production workers – should exercise their will power and patience.

It’s important to remember that, upon installing a new system, the specialist assigned for the job will be examining and improving it for a long time to come. Even three years after the installation of a real-time business change management system, we often find things in need of improvement. That’s why I can say with confidence that digitisation entails the growth of not only the company, but also of people. We are continuously expanding our capacity to perceive and understand things, because our work requires us to gain clarity on even the most minute aspects of different processes and projects. After all, our job is to analyse the current situation, identify flaws, and develop a solution that would enable the system to seamlessly discharge its functions. Through close analysis, we gain an increasingly clear understanding of the interconnections between separate divisions, the meaning and impact of each work role, and the causes and effects of given problems. I’ve noticed that automation encourages workers to become more engaged and cooperative – and this is especially true of inquisitive and curious specialists who’ve set ambitious goals for themselves. We learn every day by sharing problems and challenges, as well as exchanging questions. This is responsibility and unity – all wrapped up into one.

The series of articles “Industry 4.0 Solutions in Panevėžys” was prepared as part of the project “Connecting Panevėžys: Improved Business Environment through Better Collaboration”, funded by the Panevėžys City Municipality.