Pregis Innovative Packaging is out to live up to its middle name by providing more innovation with internet-of-things technology in how it services customers.
The company, based in the Chicago suburb of Deerfield, Illinois, manufactures machinery used to produce materials that ecommerce companies rely on to protect goods in shipment, including plastic films, bubble wrap and custom-designed plastic foam. In addition to supplying the packaging materials, it also sells manufacturing equipment to customers who want to produce the packaging materials at their own fulfillment and distribution centers.
Remotely managing on-demand manufacturing equipment
The manufacturing equipment, which can cost tens of thousands of dollars, is designed to produce custom-fitting materials to secure products. The IntelliPack on-demand foam-in-place system, for example, produces plastic foam materials to cushion and protect the particular dimensions of products packaged for shipment.
Keeping the machines humming along at customer locations, however, requires frequent monitoring and maintenance by Pregis field service staff and replenishment of chemicals and other supplies the equipment consumes to produce packaging materials. But now the company is operating with a new IoT-based system designed to provide Pregis and its customers the data they need to sharply reduce the number of field service staff visits and better manage the replenishment of supplies as needed.
“We’re moving to a consumption-based model,” says Jeff Mueller, chief information officer.
Pregis, a privately held company with close to $800 million in revenue and 1,800 employees, is using a technology system from business software company SAP SE that connects with IoT sensors embedded in its manufacturing equipment. The SAP system includes multiple parts:
- Connected Goods Software, an IoT-based system for managing inventory records;
- SAP IoT Connect 365, a service that manages the overall cloud-based IoT data system, including connections to mobile networks for access data on mobile devices;
- The SAP Leonardo “digital innovation system,” which uses data, analytics and artificial intelligence software to provide insights into business operations;
- SAP Edge Services, which processes data at the edge of a company’s computer network to support immediate data alerts.
Getting beyond ‘data-rich, decision-poor’
Before it began to implement the SAP system in 2016, Pregis had relied on a legacy data-management platform to remotely manage its manufacturing equipment, but the data was difficult to put to use. “It left us data-rich but decision-poor,” Mueller said in an interview last week at the annual SAP Sapphire Now conference in Orlando, Florida.
With the new SAP system, he added, Pregis is able to better compile two general sets of detailed information: data on how its machines are operating, such as whether they’re overheating or out of chemicals for making plastic packaging; and data on the amount of consumable materials a customer has purchased, indicating when materials need to be reordered. Such data can be sent through alerts to mobile devices or desktop computers.
“This helps us understand maintenance and consumption patterns,” Mueller said.
Mueller didn’t comment on the cost of deploying the SAP system, but said its benefits will materialize in multiple phases. For now, Pregis is using the data on machine operations and supplies to support its field service staff, resulting in fewer service calls and lower maintenance costs. The data alerts help to inform service personnel about what maintenance parts and materials they need to bring to a customer site, saving them from having to make repeated visits for the same service call, Mueller said.
Sharing consumption data
He gave as an example maintenance of his company’s on-demand foam-in-place machines, which typically account for 40% of repair time. “We expect to cut that in half to 20%” because of fewer multiple-visits for each service call.
Pregis also plans to soon begin sharing data on materials consumption with its distributors, expediting their efforts to process customers’ reorders.
Over the long term, Pregis also plans to eventually compile and share data with customers on their own and industry-wide materials consumption, helping them to benchmark their efficiency in using packaging materials, Mueller said. Eventually, Pregis may also help customers to automatically replenish materials when data indicates they’ve reached a minimum threshold.
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