How gen AI can be the packaging and paper industry’s next frontier

Mckinsey & Company has identified building capabilities in six areas.

The cumulative potential of gen AI allows paper and packaging companies that adopt these technologies to unlock significant business value and gain a competitive advantage, according to Mckinsey & Company’s analysis.

However, the report noted that successfully leveraging gen AI transformations requires building capabilities across six key areas.

First, companies need to develop a gen AI strategy that aligns with the overall technology strategy to ensure a competitive advantage.

Setting up a scalable tech stack and infrastructure to support multiple gen AI solutions and building a robust data foundation to scale gen AI across the organisation are also crucial.

Another essential element is that there should be a definition of an operating model that brings business, operations, and technology together.

The report also emphasises that identifying and retaining the right talent and skills required to advance gen AI is important as well.

McKinsey found that only 30% of company leaders say they have a high degree of knowledge and understanding of Gen AI's potential. Only 13% have launched the use of gen AI tools, while 11% are still developing such solutions.

Lastly, companies must ensure responsible use of gen AI whilst managing adoption at scale and mitigating risks.

“We suggest companies launch two use cases from any part of the value chain that can deliver quick impact and build excitement, along with two additional use cases that may take longer to implement but can bring about large-scale improvements across the entire business,” Mckinsey noted.

Leaders have seen the potential of AI in packaging, with approximately 95% of survey respondents believing their companies should invest in gen AI.

Furthermore, approximately 77% say their companies have moderate to strong intentions to use gen AI in the near future.

Innovation and research and development (R&D) are key drivers for growth in the paper and packaging industry, especially given the global focus on sustainability and a transition to green materials.

Paper and packaging executives believe that gen AI can boost R&D productivity by assisting each step of the R&D life cycle: helping companies generate new ideas through intellectual property (IP) and patent analytics, providing customer analysis, generating customisation options, accelerating the idea-to-visualisation process, and streamlining field-testing feedback.

Whilst there is excitement about the potential of gen AI, the report noted that respondents also cite several challenges that hinder quick and seamless adoption of this technology.

The biggest challenges executives reported are limited access to data and to a modern tech stack, as well as concerns about how gen AI adoption could raise privacy and IP problems.

Respondents also report having a limited understanding of specific use cases that could drive value from adopting gen AI and express concerns about the associated costs.