Pack InnoTech Conference 2013, ThailandInnovation that leads to cost reduction through change in structural pack design.

Packaging Innovation

Vs.

Value improvement programmes…

Innovation that leads to cost reduction through change in structural pack design

Conflicting forces?

Innovation that leads to cost reduction through change in structural pack design

• The innovation model• Renovation & Innovation• Innovation level & Projects categorization • Consumer Insights…a multi–layered approach. • Holistic design• Reviewing effect on cost through change in structural packaging design

– Leading case• Final conclusions & Q&A.

Agenda

The model

412 May, 2013

Strategy, Insights and New Ideas

Business NeedsConsumer Opportunities

Insights & Ideas that align with desired Direction

Potential Solutions & Proven Concepts

Chosen Concept Complete & Robust Product Design Specifications

Robust Manufacture & Equipment

Efficient & Effective Rollout

Define

Discover

Design

Deploy

GREAT

DESIGN

Perfectly functioning packaging with honest consumer differentiation. Routed in its brand DNA.

DEPLOY

Technical rigour in the development process & obsession with detail will deliver GREAT packaging!

Renovation and Innovation

Consumer/technology Matrix (CTM)

New Core New Benefits Improvement New Variant No Chg

Rad

icalN

ext Gen

.In

cremen

talB

ase

consumer value perception

enabling technology

The two axes of the CTM are:

1. Consumer Value Perception (CVP) CMI/BD led. How will the product be perceived by the consumer in the launching country?

2. Enabling Technology (ET) R&D led. How does the technology used in this product compare to what is currently being used in the industry anywhere in the world?

Innovation levels

1. derivative / extension2. Incremental / evolutionary

3. next generation / revolutionary4. radical / disruptive – breakthrough

4 levels of innovation:

no fix boundaries, some overlapping

time to marketresources

risk

innovation

derivative

incremental

next generation

radical

Level of complexity

• In order to analyse projects systematically and fairly, they were classified according to an arbitrary scale of level of complexity:

• Level of complexity 1: New Variant (recipe / flavour / fragrance), same pack & same

production process

• Level of complexity 2: New recipe/formulation, complete product range.

• Level of complexity 3: New packaging or new components in pack (e.g. dosing cap).

• Level of complexity 4: New recipes / formulations across several packaging formats/

platforms.

• Level of complexity 5: New pack + New formula. E.g.: Red Bull.

• Level of complexity 6: New technologies (I.e. new molecules, new manufacturing &

packing process) and/or new packaging. E.g.: Nespresso

Level 1 & 2: New variants & New recipe / formulation

• Projects duration: approx. max. 1 year.

• There is no urgent need to speed up these projects.

• Could still benefit from:

– Complexity reduction (Flavours/fragrances and formulations harmonisation)

– Global testing protocols.

– External resources (Flavours / Fragrance houses validated for running storage tests?).

– Improved ways of working.

Level 4 & 6: New pack or pack components, new pack + new formulation

• Pack design and its implementation in the factory (SC) generally dictates the critical path.

• If safety, regulatory or legislation is affected, this could also play an important roll).

• Can take from 2 to 4 years from charter gate to launch proposal.

18 to 30 months (1 ½ years to 2 ½ years)Charter gate Contract Gate LP

12 to 18 months (1 years to 1 ½ years)

Packaging in critical pathSC in critical path

30 to 48 months (2 ½ years to 4 years)

Model example

Charter gate Concept lock(pack)

Prototype/pilot tooling (pack)

Contract book

Technical design lock(pack)

4 to 9 months

Key interfaces: Packaging -SC (DFM)-suppliers

7 to 9 months

Ideas explorationDesign activitiesQualitative studies

Key interfaces: MarketingCMIPackagingDesign agency

PPT

CPT

Bases II

9 to 12 months

Key interfaces: Packaging (+CTI)-CMI-Marketing

1 2 43

5

1-Rapid prototyping -Qualitative testing & consumer feedback-Design iterations up front.-More resources in Concept selection. Packaging deeper involvement. Share responsibility with MKT

2Number of Concept options reduction enabling earlier work for technical design. Merge/bring as close as possible Concept and design lockFull technical detailing using Moldflow and FEA simulation tools.(Technical design lock)

3 Better/Smarter interaction with interfaces

4Tolling management/selection. Experience with mould maker 24 / 7dedicated resources to mould - delivered in 4 weeks against 10 weeks.

Zoom in…Opportunities

R&D input

Consumer Insights: a multi-layered approach…here we start? Ideas Phase overview

Consumer Insight

Shopper InsightsCustomer Insights

Insights Dev. Tool

Phase 1

(Brand led)

Marketing/R&D/SC/Finance input

Phase 2

Consumer Insightssharpening

Kick Off Meeting

Input shopper, channels & customer

insights

Idea Generation / MKT Concept Development

Quantitive / Qualitative Testing

Early strategic alignment with

customers

Top down assumption: Lead

Business Case

Technical (R&D/SC)Scoping

EPM

Past learning's

Design Brief

Project Brief

CL

CH

AR

TE

R

Strategic Fit/Exploratory/Resource Allocation

Packaging is becoming the primary point of contact for our consumers…

How will we differentiate?

holistic Design = packaging is…

…an integrated part of the product experience

holistic Design

packaging formulation brand total product experience

• avoid treating the three areas in silos.

• whenever a new packaging is developed new graphics may be done in parallel.

• if possible develop the family range of products simultaneously to enhance brand image consistency across the product portfolio.

deliver the experience

emotion through sensation

Leading Case

the 'upside-down' roll-on!

Background

• Claimed to be the smoothest roll-on in the world, the upside-down roll-on features four patented designs. It is the result of several years’ collaboration between Unilever and its packaging suppliers.

• What were the insights?1. No.1 in use consumer gross negative was the slow speed of drying (we want to deliver

a pack + formulation which is super fast dry).2. Being ‘more green’ than competitors is a powerful claim for any brand and a compelling

draw for consumers. We knew we could claim the new Rexona roll-on ‘more green’ than any other 50ml roll-on in the market by overhauling our design and manufacturing process.

Project Brief: summary

• To make a significant advance in roll on packaging. We want a clear, consumer perceivable step forward that will drive consumer preference and put us a step ahead of the competition.

• To develop a new pack which has irresistible, 'for me' appeal for men and women.

• To develop a pack which 'feels right' for the '4' strategic brands - Rexona for men, Rexona for women, Dove and Axe.

• To develop a pack which is 20% cheaper than current and hits key $1 retail price point needed for developing markets

What were the challenges?

• use of higher speed manufacturing to hit cost targets.

• a more sophisticated design to keep our target consumer.

• a better roll-on engine (requiring more critical parts) to validate our marketing claim that “there is no smoother roll-on”.

2 seconds packing at constant pressure

2.5 seconds packing with pressure decay

How did we get started?

• Early engagement with all critical functions.• Right at the start, we brought key suppliers – to make sure the team could operate globally

and cross-functionally. • Deployed leading edge design technologies as CAD, CAD and Rapid prototyping and tooling.• We addressed the supply chain globally , sourced new suppliers and set new contracts.• At the outset, we agreed what to measure and then set about testing, testing, testing – all the

elements and even the people – to make sure we challenged and improved every aspect of the entire process.

What next?

• The moulding, assembly and packing processes have been redefined.• We designed radical systems to reduce capital, whilst improved our energy efficiency to use

less electrical energy and cooling water.• Common manufacturing solutions were introduced across all countries.• The new roll-on became 8% lighter in weight, using a total of 1000 tones less plastic per year

than previously.

What’s the result?

• Best performing roll-on in the market due to innovative engine design and upside down position.

• The time to make the cap has been reduced by 48% and the time to make the bottle has been reduced by 18.75%, leading to a reduction of six million kW/hour globally.

• This saving is equivalent to that of having a light bulb on for 6,000,000 hours (685 years).

• Overall cost targets have been achieved.• . ..and sales are rocketing!

Innovation & Cost reduction

Final conclusions: The balancing act

SC flexibility & Mfg. speed

Beauty & Function

Timing & Risks

Packaging & Formulation

End…

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