16th Annual European Suppliers Roundtable: Inspired by interpack
A spectacular interpack show sets the tone for this year's event.
Editor’s Note: The following was transcribed from day-long discussions held on June 26 in London. It has been edited for content, clarity and space.
CI: With Interpack 2014 now a memory, how would you assess the mood at the show? Also, it appeared that improved hygiene was the dominating theme regarding equipment design at the show. Was that the case? Finally what would you say were your company’s most significant innovations?
Jan Hammink: First of all, hygienic design doesn’t play that much of a critical role for us since we are making processing equipment for cocoa and chocolate. And, despite our initial concerns about interpack, because of the market situation, we surprisingly found the show very, very positive. We had two new developments — a high-volume line for batch processing of chocolate and compounds and a beater blade mill for processing cocoa nibs into cocoa liquor.
CI: Were you impressed by the number of international visitors and perhaps maybe new clients coming to the show?
Jan Hammink: At interpack, you have always had an international crowd. It was very, very good, and again, the quality of the visitors was even better. Moreover, even though we do not plan on doing business at interpack, that is signing contracts, this time we actually did.
Peter Meyer: For us, hygiene is always important, always an issue. At the same time, energy savings have become very critical for us. As a result, we presented our range of energy-efficient machines that emphasize cost-savings as well as improved quality, machines that actually turn out better products. Customers were also interested in production safety as well as reducing downtime. And I have to say that this interpack was one of the best.
Christian Werner: We supply a great amount of equipment to multinational companies and hygienic design is very, very important. We even do workshops with our customers — TPM (Total Productive Maintenance) sessions — as well as cleaning sessions and other workshops. In addition, we are always working on improving the machine design to make it easier to clean.
To add some perspective to the discussion, we’ve seen that by adding TPM workshops to our services, the effect has been huge. TPMs are getting more and more popular with not only multinationals, but confectionery manufacturers in Southeast Asia.
Also, a major development for us at interpack was the debut of our fully automated cleaning system to clean our wafer baking oven by means of laser technology. In effect, once an operator puts everything in place, he presses the button and goes home. And while he’s sleeping at home, the machine is being cleaned. The next day everything is done.
CI: That’s certainly convenient.
Christian Werner: Another challenge for us involved capacity and efficiency. People are asking for what you said as well as, Peter, lower downtimes, higher efficiencies, higher capacities. Consequently, we developed the largest wafer sheet ever. Today the standard is 700 mm by 350. We increased it from 700 mm to 1,000 mm, adding 40 percent more. It’s similar to what Hebenstreit did 25 years ago, when we increased the wafer sheet from 500 mm to 700 mm.
As for interpack itself, we were very, very busy. We were also lucky that we could increase our booth size by more than 100 square meters. So for us the show was very, very positive.
Andreas Leitze: The Bosch group also had a very successful show, similar to everyone else here. Not only was there an increase in visitors to the show, but we felt that most visitors really had projects. There were many, many people with real projects at the booths so that was great, and we were also surprised by the large number of visitors from North America. That was also another trend that caught our interest. The feedback we received — especially from Asia-Pacific customers — was that they’re really impressed by the quality of European suppliers. All the machines that were exhibited at the booths represented a really different category of quality compared to what they’re used to.
Peter Meyer: We saw customers coming up to us with our brochures in their hands, and saying, ‘I want to see you about your energy machines’, you know, ‘Can you do this, can you do this?’, and that was really nice.
Peter Wallin: The makeup of the visitors was different. Certainly from the UK there were very, very few visitors — probably the lowest it’s ever been. So I think it varies — it’s a different makeup of visitors each show.
CI: Much more, say, from the Middle East, Far East and South America?
Peter Wallin: Yes, there were quite a few from South America; we certainly had many visitors from there.
CI: Were you surprised at seeing an increase in small and mid-sized manufacturers?
Peter Wallin: Yes, there were plenty of mid-sized manufacturers. With regards to hygiene; we didn’t receive a lot of interest. There was a bit — they were particularly interested in the robot we had on our stand, and automation and flexibility seemed to be the key drivers. I still believe automation is major. People are looking to reduce labor costs, and not just from the developed world, but from the developing world as well. So it surprised me that people from China and India were coming and asking about automation.
Oliver Nohynek: We all build very sophisticated equipment and our impression, especially of mid-sized companies coming to the shows, especially from areas like Middle East, Far East, and even Africa, is they do respect quality. They certainly are intrigued by all the fancy add-ons we have, but because of financial reasons, we have to tailor the units to the most important benefits, like automation. That’s good enough. They want to have the automation. They don’t want to have all the add-ons, so there is a movement toward more basic, simpler equipment.
Jan Hammink: When I compare today to what it was like five, six, seven years ago selling machines in the Far East or in the Middle East, it was a benefit if you could also supply, for example, automation. But nowadays, at least in our experience, they want to have fully automated machines and they want to have PLCs inside. The cost of labor is going up, and so we see a change now in the more simple machines, and the simple controls, from five/six years ago to now. They really want fully automated machines.
Wolfgang Pförsich: We are seeing that besides hygiene of design, total cost of ownership or TPM, that there is a demand for flexibility, for additional capacity and efficiency from the mid-sized companies. This was good for us because we addressed these needs with our new developments. In addition, interpack 2014 was one of the best ever for us.
Markus Rustler: In our part of the business [packaging machinery] — and this could be seen at interpack — it is not so much about hygienic design or flexibility, since this has been on the table for many years now. Rather, it’s easy access to the machine’s critical components. Equipment designs that we exhibited make it easy for uneducated operators to run high-tech equipment. In many parts of the world, our customers tell us that the educational level of operators is declining year by year. So they tell us we need to make machines that basically plug and play. In this way, the operator doesn’t have many choices in setting up the machine, thus preventing them from doing harm to the machines.
Andreas Leitze: Yes, we also see most companies focusing on improving efficiencies. They’re measuring overall efficiencies, seeing how low it is, and trying to get it up. One factor they look at is easy-to-maintain, easy-to-operate machines.
Another thing we’re seeing is a move toward simplifying the complexity of a production line. If you purchase a complete confectionery line and you have, say 5-10 suppliers, there are many interfaces to handle. As a result we’ve seen companies merging with others to provide a broader range of equipment and services. Also, customers are looking for companies who are partnering with another complementary supplier. Thus, you can still buy from two suppliers, but you don’t have to worry about the interface. So it’s all about getting fewer interfaces when you purchase a complete line.
CI:When you talk efficiencies I imagine that they’re also looking at minimal changeover times, right?
Thomas Bischof: First, I would not agree that we have the need for just simpler machines. I believe there’s a parallel demand for more sophistication. I think we have both trends. We thought that when we did some quite detailed work in China two years ago, that we would have to simplify the automation and related interconnections. But those people didn’t want to have a touch screen. Why? Because everyone there has iPhones and that’s what they want to do on the machine. It’s all about being modern. The other thing is, as you said, they have no clue how to operate, so the machine needs to do it anyway. So you need the most sophisticated automation system whereby the machine runs itself. We are going into intelligent automation. For example, we have something called FinSens on our refiners — a self-controlling device whereby the machine detects how the layer on the rolls is and if it needs to make an adjustment based on operating conditions. ‘OK, is it the water temperature? Is it the pressure? The pressure left side?’ So the machine can adjust itself, it doesn’t require the operator to do so.
Neil Brown: I agree with what you’re saying. There’s so many of our customers around the world who want exactly the same product. If you’ve got a blue chip manufacturer in North America or in Europe making a product, if they’re in Philippines or Indonesia or wherever, they want exactly the same product. They want exactly the same quality. They want exactly the same efficiency — everything exactly the same. But you’ve got to do it with operators that don’t have the backing of a Nestlé or a Mars behind them.
Ralf Schäffer: Going back to the question regarding interpack, for Sollich it was also a very good show. We also had plenty of new developments and new innovations regarding hygiene and energy. In the end, customers expect the most efficient, the most hygienic machines, based on our reputation. That’s what they are willing to paying for.
Massimo Pietra: I agree with Ralf, but when discussing European manufacturers, it’s also a matter of configuration. I mean, we are not selling the same configuration to the multinational that we sell to a national customer, because their hygienic demands are different. Configurations for machines sold to multinationals are getting more and sophisticated. They really have functions or new developments that other customers don’t have or sometimes need.
Ralf Schäffer: I didn’t mean to say that you should have only one type of machine and one execution. You need to be flexible to cope with the different demands of customers.
CI: So would you say that every machine sold is a customized one?
Markus Rustler: To some degree.
Massimo Pietra: I believe it has always been like this. It depends on where you are. Of course, with regards to processing machinery, that’s less important in cocoa or chocolate preparation. But if you look at moulding or packaging, that’s all customized from the welding to the brands you use for certain things, because as Ralf said, many customers have their own ideas.
In addition, for us, hygiene related to the changeovers has become very important. We are working with our biggest customers on reducing changeover times when switching from one product to the other. This is also all related to hygiene, the way you clean. So it affects the whole design of the machinery. As a result, we are actually investing heavily on that. It was an important initiative for us this year — hygiene as it relates to contamination and the reduction of changeover times. So, to improve the efficiency, it all goes back to the whole design, to the design of a complete line.
CI:I understand that when manufacturers purchase a line today, they want to make sure it’s going to be a profitable, correct?
Andrew Mann: I can put a slightly different spin on that. There’s been a lot of used equipment, reconditioned equipment, and there’s still a big market for somebody that doesn’t have the budget for the best equipment. So, there’s still a business niche in that middle sector where manufacturers are looking for value in equipment purchases.
I think the other thing that happened at interpack for us was that there were many medium to large manufacturers looking for people like us as solution-providers who can overhaul their old equipment. You know, they have equipment from many of the manufacturers sitting here, which is still fundamentally great equipment. But then they want to add the technology, such as servo drives that they want to spec. That seems to be something that customers are asking us more and more about.
Mark Davies: Hygiene’s a big thing really, internally, within Habasit. It’s all about making belts easier to clean; making belts that don’t contaminate product; making modular belts now that come apart with your fingers, with no tools. We’re seeing it more and more in what we call the wet food industry. But I was in a bakery yesterday where hygiene dominated the conversation. From the big users that we supply — all the brand names, the Nestlés, the Mars, the Kellogg’s of this world — they all want that machine to run for as long as possible and as reliably as possible. So we get involved now with things like, ‘X machine, X belt, why did that fail?’. Could you increase that life? Could you do this? So it comes back to what you said earlier on — easier access for maintenance.
Keith Graham: We’ve talked about flexibility, automation, hygiene, maintenance. They’re all important things, and I think they’re probably more important to the multinational producers than perhaps they are to the medium-sized, more entrepreneurial manufacturers. What we find when we’re dealing with those people is product development. So it’s all about, ‘What product can it make?’, and ‘What product can it make that my competitors can’t make?’
There are many companies coming in that look at all of our new hygiene, maintenance, automation improvements, ‘Yeah, good, excellent, that’s what I expect’ — ‘That’s what I expect from a well-known European supplier’. The ones, however, who were going away really excited were the ones who were looking at the new product ideas that we had on display, thinking ‘That’s great — a double-deposited lollipop — I’ve never seen that before’. So through that kind of innovative product development, as well as our ongoing engineering improvements, we, as European suppliers, can keep ahead of the competition.
CI: I understand that last year and this year has proved to be strong for most people here. As a result, lead times have certainly grown longer. Are customers using that as a negotiating tactic?
Markus Rustler: One or the other might try, but first come, first served.
Jan Hammink: For us, delivery time is not negotiable. But you can do two things: you can promise a better delivery time and not reach the goal; or when you have a policy then it is not negotiable — then a certain delivery time is a certain delivery time and that’s it. In some rare occasions — when you explain to them why it is, and when you have a track record that you always keep your delivery times that you agree upon, then they accept it. And there are some rare occasions where you really lose an order because of delivery time, but it’s the policy you have.
Peter Meyer: You can always ask for more money if you’re going to deliver earlier. [Laughter]
Markus Rustler: That sometimes happens, really. Some customers are willing to pay more if they get preferred slots.
CI: Okay. How do you deal with that?
Markus Rustler: What we sometimes do is if a customer comes in with a long-term project — and it depends on the customer — we are sometimes willing to block capacity against money. Consequently, they pay us money for keeping capacity open until a certain point of time. Either the project hits or not. Usually — well, if we are lucky, we can fill the gap with something else if the project’s not coming, but that is how we sometimes deal with customers.
CI: During several past roundtables, we’ve brought up the subject of nutraceuticals and the fact that confections can be the ideal carrier for such active ingredients. Recent developments suggest that pharmaceutical companies are indeed keener on introducing nutraceutical confections and are even interested in producing them. Is that the case?
Christian Werner: I think that this depends on the product as well. Of course, you can have a gummy bear product, for example, whereby it’s fairly easy to add some vitamins or ‘actives’. For our products — wafers — it’s slightly different. Of course there’s a trend, let’s say, to have healthier snacks, fat-free and maybe vitamin-enriched items, calcium-enriched — things like this — but we don’t really see that there’s a trend for a pharmaceutical company going into wafers. It really depends on the product range, in our opinion. In general, however, healthier snacks are a trend.
Oliver Nohynek: We are working here in Europe in the pharmaceutical industry — that’s what Driam does — as well as in the food industry, which includes confectionery. But in the United States you have a third industry; that’s the nutraceutical industry, and that’s pretty huge. There are many companies working in that field, and from time to time you find companies swapping from the pharmaceutical industry into that nutraceutical sector; sometimes you’ll find food companies swapping into the nutraceutical industry, but that’s very different from what’s in Europe. We don’t have this type of industry in Europe, compared with the United States.
Peter Wallin: I think it’s likely to develop more, though. Certainly — I’ve been following it in the UK and in Africa, and one of the problems with people’s diets is they’re low on vitamins and minerals, something that’s been publicized in the States more than the rest of the world. That’s probably why you’re ahead of it — that people realize they need more supplements. So if you go out and buy standard foods, look at them 10 years ago; they had far more vitamins and minerals in them. So I think at some point there has to be more vitamins and minerals added to foods; it’s just, where will they be added?
CI: And confections can be an ideal carrier. Another trend that we saw at the Sweets & Snacks Expo in Chicago this spring was the continued emergence of minis, or miniaturized versions of leading brands. Has this affected processing, packaging design and development?
Peter Meyer: Yes, definitely, because, first of all, it’s true that more and more companies want to have mini products in a bag or whatever. But for us — from the processing side — it makes it more difficult, because they expect the same accuracy. So the equipment has to be much more sophisticated and much more precise.
Ralf Schäffer: At the end of the day, to reach the same capacity kilogram wise per hour it’s more expensive or more difficult. We are seeing this trend for bars. I think it gives people the feeling, ‘I still can eat one but it’s just a small one.’
Wolfgang Pförsich: But when they demand to produce minis and the maxis on the same equipment, that’s even more of a challenge, even for wrapping, much less the processing side.
CI: Tell me more about that. How do you do that?
Markus Rustler: Well again, modular design flexibility and each changeover between a product size or even wrapping styles. These are the trends following this development.
CI: So you’re not producing it at the same time, right, but even though you are producing them on the same line?
Wolfgang Pförsich: Same line; exactly.
Ralf Schäffer: Same line, yes but there are lines where it’s at the same time as well.
CI: Okay. That’s pretty sophisticated, I would think, right?
Ralf Schäffer: Yes.
Markus Rustler: It only works with automation when you divert lines — divert product streams.
Ralf Schäffer: Because let’s say if you have the packaging for the core product — the big product — to change, it takes time, and if the customer is big enough and he requires two different sizes and then he wants to have both parallel, more or less, that’s also a challenge.
Markus Rustler: And, of course, it also has to do with demographic developments worldwide, especially in the Western world, where you have more and more single households and you have a tendency to eat on the run — rather snacking than sitting down for dinner or for lunch. So these are the tendencies for rather smaller packs, for also re-sealable packs — to eat some and then re-close the pack. These are general trends in the packaging industry.
Christian Werner: I think there’s also the trend toward meeting a certain price point. Look at Asia, they have what they call the magic sales price, which is, for example, in Indonesia, 500 rupiah, 1,000 rupiah, so the product [wafer] has to become smaller. Ten years ago it was 80 mm; now it’s 40 mm at the same sales price. Therefore it becomes a challenge to produce these on our equipment. Even so, we are producing large wafer books. But at the end of the line, where we cut the large book into the mini pieces or product sizes, it is getting more and more sophisticated and complicated as well. At the same time, the customer’s asking for the same efficiency.
Keith Graham: I think there’s two trends going on. One is making products smaller to hit price points and the other is miniature versions of existing products — more about convenience and, in some cases, calorie control. I know there’s a trend in the States — 100 calorie packs — for smaller products. So there’s two things going on, and certainly we’ve seen this in the hard candy industry. It’s about making the product smaller to hit the price points. And from a processing point of view, that doesn’t give us any problems. When it comes down to making miniature products — small versions of bigger things — there will come a point at which if you want to hit the same kilograms per hour you do need to add something to the machine. Say, additional depositing heads or whatever. But quite often the constraint on the capacity is how much they’re willing to spend in additional packaging or how much cooking capacity they’ve got rather than the processing machine, because they’re usually capable of adaptation. If you’ve got a width, you’ve got a length, you’ve got a speed, you can always cram a little bit more — get the products in if the products are smaller.
CI: Many major midsized confectionary manufacturers have turned to suppliers for increased help with product development, energy savings, packaging innovations. Are you seeing your customers demanding this added value from you as a part of doing business?
Peter Meyer: It was always a part of doing business, when a customer has an idea for a new product, or whatever, we always worked together with the customer, because from one side the customer has to get the confidence that we are the right one to work with and we can accommodate his product. On the other hand, we also need to have a good feeling of working with them as well.
Andreas Leitze: There are only a few customers who really still just order machines, some of which don’t even let you into their facilities; they just purchase the machine and then they do everything themselves. But these customers are getting fewer and fewer. More and more customers are really looking for a partnership, for a supplier who is capable of delivering a big package and taking a big portion of the responsibility, because that is a trend in the industry. It also means that the supplier gets more and more responsibility, be it from innovation in developing the product to ensuring the efficiency of the line.
Wolfgang Pförisch: We have been doing this for 20 or 25 years, but now we see this demand is increasing from mid sized or smaller customers to have us join in their product development.
CI: Moreover, many of you have created product development or R&D centers where your customers can come in and test their product development, which is a major investment.
Christian Werner: I think that this is also very beneficial for us as a company selling machines. Naturally, when we develop a product or a solution with the customer together, then the chances to sell them a line afterwards increase.
Massimo Pietra: I just wanted to go back, you mentioned innovation; our role and our experience is very much right now about balancing innovation with pragmatism. With newcomers and new customers, of course, they want to have the line that can do everything. Of course, they also want a low price for a machine that can do everything. It’s our responsibility, to be able to suggest the right configuration for what they really need for today’s production, and what they can expect from the line tomorrow. Actually, that is a tough job, because sometimes it looks like you must have a configuration that is correct, cost effective, and open to continued product development. This is a very tough balancing act, but I believe it is the balancing that establishes your reputation and credibility in the industry.
CI: And what about additional customer service?
Thomas Bischof: We are going to local service, so we are building up services in China; we are building up our Bühler service engineers in India, we are building up our service engineers in South Africa, everywhere. Consequently, we are not working with agencies. To us and our understanding also of the Bühler family, we want to have the Bühler employee going to customers. As far as I experienced it, that is still an advantage for our company that we really have the Bühler guy there locally solving the problem. We are investing in building up local services, local competence.
CI: As emerging markets become greater growth areas for confectionary suppliers, is there a need for less sophistication, given that operator skill levels may be lacking? Do you feel that you’re developing more sophisticated, but so called “dumber machines” that are easier to operate?
Markus Rustler: No, more intelligent machines, which take the risk of the operators — take the intelligence needed away from the operators.
Keith Graham: Process engineers would tell you that even when operators are skilled, the biggest source of process variation on the line is operator intervention; they caused more problems than they solved. So removing the ability for them to adjust things is becoming accepted now.
CI: The operator knows better, correct?
Keith Graham: That is the point — they don’t. I think most customers are now recognizing it is a problem; even if you can get good people, even if you can retain them, which is a problem, you can’t necessarily get as good a performance from that operator as you can from a computer.
Neil Brown: At one of our customers the engineer actually fitted a reset button to the panel, just connected it to the 24-volt supply. So you press the button, a light goes up, that is all it did. It had a reset label on it. So the operator thinks, ‘I’ll press the reset button’, problem solved. It never did anything, but the operator was happy, kept pressing the reset button, the light came on, problem solved.
CI: One final question, are any of you getting in involved with 3D printing?
Keith Graham: It’s in development. We make models of complex components, straight off the CAD system, testing them that they are the right shape and the right function, before making expensive moulds or doing lots of CND programming.
Andreas Leitze: We use it for the hot candy dye forming process; we can print out samples of the final product. If a customer would like to develop a new shape of candy, we can print it out and, for example, we have already supplied 500 pieces to customers, because they want to check if the new shape is suitable for their wrapping machines. We can print out 500 candies, plastic candies, and they can check if the final candy shape will suit them.
Andreas Leitze: Another thing, of course, if you look 20 years ahead, if a customer needs a spare part, most companies will have a 3D metal printer and we just supply drawings to them and they will print out the part without having shipping or production processes. I guess that will be the future, but today we just using it for the modeling of candy.
Massimo Pietra: Guys you’re scaring me.
Andre Mann: We have used it for production components, there is nothing like it, because you can have it literally the same day, it prints straight from your drawing. Of course, there are only certain applications for that, but the applications we have used it for are for particular strong and light components. You can have a hollow inside, in effect, or a ribbed inside to strengthen it, something that you cannot do with machining. It is in its early days, but it has a purpose already and it will continue to grow.
CI: Again, thank you all for coming and participating in our roundtable.
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