When OpenAI introduced its artif icial intelligence application ChatGPT in 2022, it unleashed a storm of hype that shows few signs of dying down.
Over the past two years, experts of all kinds have been talking up the benefits of artificial intelligence (AI) and warning of the drawbacks. It is hard to separate fact from science fiction, especially if you are a manufacturer trying to figure out where the technology can generate a return on investment, whether you’re making cars or flexible packages.
At the very least, AI offers the promise of greater efficiency and clearer, quicker insights into business operations. And while there are risks in using the technology, there also are risks in steering clear of it, observers say.
“The first-mover advantage cannot be ignored,” says Aleks Zlatic, head of product and market development for Pittsburgh-based ePS Packaging, which develops enterprise and manufacturing software for the packaging industry.
Zlatic cites the example of microchip maker Nvidia, whose bet on AI helped it vault ahead of industry heavyweight Intel.
“They waited, and they’re nowhere to be seen,” he says about Intel. “While I’m sure they’ll catch up, the risk now exists due to waiting.”
New Tools, Familiar Goals
Flexible packaging companies and other manufacturers are no strangers to incorporating the latest advances. They have been adapting new technologies since the dawn of the Industrial Revolution in the early 19th century, from the advent of the steam engine to the introduction of robotics on assembly lines.
Nonetheless, AI is expected to be a game changer, according to a May 2024 report from the National Association of Manufacturers (NAM).
The report titled Working Smarter: How Manufacturers Are Using Artificial Intelligence groups several discrete technologies under the umbrella of AI, including machine learning, deep learning, natural language processing, machine vision, digital twins, and robotics.
“These systems use data and human-built algorithms to simulate how humans perceive, learn, and respond to questions and prompts,” according to the report. “AI systems are often connected to other machines and respond to the digital and physical world to support processes that can either be very simple or complex.”
“Even if you’re a novice, you can find some very compelling use cases on your own. And I think it’s important for leaders who are thinking about leveraging the technology to do that because you want to get a flavor of what it can do.”
—Aleks Zlatic, head of product and market development for ePS Packaging
While AI may be new, it is helping manufacturers accomplish long-standing goals, according to the report.
Reducing costs and enhancing efficiency are the top reasons that 72% of manufacturers are investing in AI, according to a 2023 survey of NAM’s Manufacturing Leadership Council cited in the report.
The second-most common reason is to improve operational visibility and responsiveness, selected by 51%. Respondents could choose more than one answer.
Other reasons include:
Improving process optimization and control (41%),
- Compensating for labor shortages (32%),
- Improving quality (22%),
- Creating a sustained competitive advantage (21%),
- Improving asset reliability (19%),
- Improving speed to market (14%), and
- Improving the customer experience (11%).
Manufacturers are adopting AI in all aspects of their business, according to the survey. But the most common area is manufacturing and production (39%), followed by inventory management (33%), quality operations (24%), and research and development (24%).
About one-sixth of manufacturers, or 17%, use AI in equipment maintenance and installation.
‘Actionable Insights’
Workers often fear AI will replace them. And it is no secret that the technology helps people work more quickly, theoretically reducing the need for labor. Instead of sifting through spreadsheets for hours to find the answer to a data question, for example, executives can tap AI to comb through it in seconds. AI tools can also summarize long email chains and other written communications, allowing professionals to quickly catch up on what they need to know.
But while AI may help people become more productive, it does not replace them, says David Wiens, CEO of BPS AI Software and a packaging industry veteran.
“It’s not going to be AI that takes your job. It’s going to be someone who is willing to utilize AI that takes your job.”
Still, the technology can help companies put off the need to hire. Wiens cites the example of a manufacturer that was poised to bring in a third maintenance worker because its existing two-person team was overworked. By using an AI solution to keep track of and schedule preventive maintenance needs, the company was able to continue with just two people.
“So, at least until the business expands or the dynamic changes, they have a $100,000 labor savings, and that was not something they were tracking before,” Wiens says.
The NAM report argues that AI can even help manufacturers transfer knowledge from the large cohort of retiring workers to the next generation. One company is using AI not just to train new workers in the skills of their older colleagues but also to provide forecasts of what skills will be needed in the future, according to the report.
Design is another area where AI can make a difference, Wiens says. Packaging companies are using the technology to speed up the process, whether it involves tweaking past designs or generating new ones.
AI tools can also scour LinkedIn, ZoomInfo, and other online sites to generate sales leads, Wiens says.
As they learn more about their users, AI tools can populate dashboards that highlight specific issues and suggest to-do lists, Zlatic says. Executives interested in sustainability, for example, could see up-to-the-minute reports on the use of post-consumer recycled content in packaging, ensuring their companies are hitting their goals.
“Those automated, actionable insights are going to be gold to a lot of customers,” Zlatic says.
And in the not too distant future, those insights may come to executives through voice conversations with an AI assistant, Wiens says. The assistant will be familiar with the business, the executive’s role and priorities, and the best way to interact with all of them.
“Those types of things, I think, are going to really revolutionize how we approach most problems,” he says.
Applying Risk Management
The benefits of AI do not come without some risk. The No. 1 concern for companies is data security, Wiens says.
“The last thing they want to do is dump all of their financial or customer data into a machine and not know what’s happening to it after that,” he says.
Another top issue is data quality. An AI tool is only as good as the data pumped into it, and companies may be concerned that their information is riddled with human error. But tech companies account for that when designing AI systems. “We put a layer in there to scrub and clean the data,” Wiens notes.
On their own, manufacturers are applying existing risk management techniques for information technology (IT) and cybersecurity to the issues raised by AI, according to NAM. “Companies also are developing their own internal governance programs,” the association wrote in its report.
Rigorous testing is part of the equation, as well, NAM said. As part of that process, manufacturers are creating teams of AI, IT, and operations professionals to identify any flaws in their algorithms and to validate their systems.
Getting a Flavor
If they have not already begun experimenting with AI, the first question executives in flexible packaging may ask is, “What is my opening move?”
Zlatic suggests executives begin with simple steps to familiarize themselves with the technology and how it works—and so the technology can become familiar with them. After all, AI is learning as much about us as we are about it.
“It’s not going to be AI that takes your job. It’s going to be someone who is willing to utilize AI that takes your job.”
—David Wiens, CEO of BPS AI Software and a packaging industry veteran
Good places to start are with programs like ChatGPT or Copilot, the AI companion developed by tech giant Microsoft. They can help professionals craft emails, polish articles they are drafting, and assist with other writing assignments.
Zlatic also recommends that executives build personas of themselves on the platforms they choose, which helps to ensure the platforms deliver relevant information. Online training or even YouTube videos, meanwhile, can help people learn how to write effective prompts for getting the most out of AI tools.
“Even if you’re a novice, you can find some very compelling use cases on your own,” he says. “And I think it’s important for leaders who are thinking about leveraging the technology to do that because you want to get a flavor of what it can do.”
Once executives have a basic understanding of the technology, the next step is to engage their IT teams or outside consultants who understand how more advanced AI tools work, Zlatic says, adding that it is important to have a third-party assessment of low-hanging fruit opportunities. Larger organizations may have sophisticated IT teams that are capable of projects like writing their own custom AI software tools.
Regardless of where companies fall on the spectrum, it is a good idea to get outside help when experimenting with AI, Zlatic says. Those third parties often start by feeding a company’s data into an AI engine and, using a large language model, training it to develop insights or improve user and customer experiences. Large language models can offer deeper insights into the data, Zlatic says.
Once the engine has data and the model is operational, companies should then start figuring out use cases for the technology, Zlatic says. Wherever they start, executives should not be shy about asking questions or seeking help, he adds. “We’re all trying to figure it out.”
Joel Berg is a freelance editor and writer based in York, Pennsylvania.