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The Power of Partnerships in Supporting Manufacturing Start-ups

To thrive amid the turbulent market conditions start-ups can work closely with established businesses that can lend support, guidance, and access to much-needed resources.

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For emerging start-ups in a capex-heavy industry such as manufacturing, achieving resilience and stability early has a direct link to the company’s future growth prospects. These challenges faced by manufacturing start-ups have been amplified by recent, industry-wide issues concerning supply-chain bottlenecks, economic uncertainty and worker shortages.

Yet, despite these pressures, Denmark-based paper bottle manufacturer Paboco

, The Paper Bottle Company, has stood firm. The company has established a product-market fit and delivered consistently for its growing list of customers, supported by the company’s joint venture ownership.

Its growth has been aided by several tailwinds, including the increased (and likely to continue increasing) consumer interest in sustainable packaging. With the support of Rockwell Automation, Paboco has been able to navigate a challenging landscape in receiving components with shortages on the global market to meet this growing demand.

 

Bringing Innovation to Everyday Products

Paboco was founded in 2019 as a joint venture between pulp-and-paper manufacturer BillerudKorsnäs and plastic bottle manufacturing specialist ALPLA. The company has a single purpose: to pioneer the transformation to scalable manufacturing platform for paper bottles. It is embracing the trend of bio/paper-based products that is becoming more appealing to eco-conscious consumers as well as the mass market.

However, to take steps towards fulfilling its vision, there are some obstacles that needed to be tackled. Firstly, bringing a visionary yet technically challenging product to market required the adoption of new manufacturing technologies. This involved a series of considerations in areas such as research, process, and skills to ensure the technologies are deployed in a reliable and consistent way.

Secondly, Paboco needed to pay strict attention to its unit costs. Bottling is typically a low unit-cost industry, so being the first adopter of an emerging technology still required competitiveness in terms of price point. Thirdly, in operationalizing the new processes, it was important that production accounted for contingencies that differ from more conventional forms of bottling. For example, with the use raw paper materials there is an increased risk of damage, so provision had to be made to keep its supplies dry.

A further challenge came in the form of process automation. Paboco is the owner of the manufacturing technology and holds expertise in packaging innovation; however, the company realized that its path to growth could be limited without a strategy to find the most optimal setup to automatize the process efficiently. The company therefore established a partnership with a specialized machine manufacturer, and Rockwell Automation, to support the development of an automatized machine platform for its first production facility near Copenhagen.

While the companies are at different levels of maturity – Rockwell is more than 100 years old and has a footprint that extends across the globe; Paboco is an upcoming manufacturer on the global stage – the partnership has proved productive to date, owing in part to the different expertise and perspectives each partner brings.

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Lessons and Insights from Paboco’s Growth Phase

Modern manufacturing requires companies to embrace a culture of change. 

Adaptability therefore needs to be embedded in all levels to quickly, and more effectively, react to new circumstances and information. Paboco has been able to design its facility and processes in a way that’s inherently flexible, building on its proprietary process and supported in consistent automated processes by Rockwell. Through the experience, there are several insights that provide useful guidance to any start-up manufacturing business:

  1. Develop a consistent and honest brand story from end to end. Our customers know that Paboco’s products are environmentally sustainable, but it’s important that the same approach is taken towards our manufacturing. Working with Rockwell Automation we’ve been able to focus on energy efficiency and maintaining a clean supply chain that mitigates potential environmental issues, reinforcing the story we tell about our products.

  2. Focus on your core business. Start-ups are typically built on an area of specialty, where they’re able to deliver on a specific customer need better than the market incumbents. Start-ups can’t be experts in everything, and if they try to be they’ll spread themselves too thin. We want to focus on packaging innovation, product development and manufacturing. Therefore, we can’t afford to over-allocate resources on minute details around automatization components. Being able to leverage Rockwell’s expertise in this area has helped us to maintain our core focus.

  3. Prepare for operational disruptions. Start-ups are renowned for a more improvised, fail-fast approach to product development. While we embrace experimentation at a product level, it needs to be reinforced by reliability at a technical level. Taking risks on the robustness of our machinery wasn’t an option. We needed to make sure our platform was flexible enough to deal with changing circumstances, and that any disruption to machines – such as parts failure – could be dealt with swiftly. Being able to lean on Rockwell’s expertise supply chain of automatization components was invaluable in this regard.

  4. Plan for scale. The packaging industry relies on huge scale – even producing samples involves the creation of units numbering in the hundreds of thousands and beyond. While we started small, we had to plan big. Scalable and customizable machinery built on robust components and repeatable processes helped us meet our ambitions rapidly.

  5. Be clear on the value you can offer your partners. As a start-up, there’s a lot for us to gain from working with more established businesses – including well established experience, strong understanding of the products offered, machinery and automatization experience, regulatory knowledge and a global network. But it’s important Paboco is also clear on what other companies can gain from us to fuel a long-term relationship. In working with Rockwell, we’ve also been able to offer our fresh perspectives and approaches towards agile operations, innovation and sustainability, which helps to make the relationship symbiotic.
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Supporting Future Ambitions

Given the evident global supply chain challenges, companies and consumers alike are recognizing the value of local production. This approach not only increases the reliability of supply, but also adds to the product’s sustainability credentials.

Paboco has ambitions to develop an international network where products can be distributed locally. The nature of the product means that local distribution is imperative. Having standardization and replicability at a manufacturing level will help in taking the Copenhagen blueprint to new countries, while maintaining consistency and quality as its customer base grows.

Both partners have a shared vision that the continued effort to automate Paboco’s production processes, building on the core capabilities of Rockwell, will be an ideal mix moving forward on the scaling journey – to put a paper bottle in every hand.

Find out more about how digitalization can help your business at the Management Perspectives hub, where you will find resources for executive industrial decision-makers, providing the information you need to thrive in the evolving digital landscape.

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Published September 14, 2022

Topics: Management Perspectives

Dr Florian Müller
CTO, Paboco
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Åsa Arvidsson
Regional Vice President, North EMEA, Rockwell Automation
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